Regulatory updates - EU

The European Commission (EC) has been pushing hard to achieve harmonization, facilitate trade, and reduce compliance burdens for both governments and businesses. Initiatives like the ViDA Directive and eFTI Regulations are just the start, the EC is setting the stage for a major shift in the EU's future regulatory framework.

The Commission reforms extend to a new EU Customs framework designed to make customs fit for a greener, more digital era and to strengthen a safer, more competitive Single Market. The proposal includes establishing a new EU Customs Authority to oversee an EU Customs Data Hub, which will serve as the engine of the new system and will replace the existing fragmented national IT systems, enabling a unified, data-driven EU approach to risk management and customs processes across the Union.

On 20 October 2025, the European Commission opened the door for Member States to apply to host the future EU Customs Authority (EUCA). Member States can submit their applications within six weeks of the launch. The received applications will undergo a general assessment by the Commission and will be made publicly available on a dedicated website.

Why does this matter?

Because the EUCA is a key piece of the Customs Reform package. These changes will make trading across Europe faster and simpler for businesses, while giving customs authorities the tools they need to do their jobs better. In the end, everyone will benefit from simpler, smarter customs systems.

The European standards organization (CEN) has approved updates to the EN 16931-1 semantic standard to align with upcoming legislative changes, including the VAT in the Digital Age (ViDA).

Background

CEN TC 434 was established in 2014 to create a common standard for electronic invoicing. The European standard is composed of six parts, including the semantic data model EN 16931-1:2017. The European Standard establishes a semantic data model of the core elements of an electronic invoice. The semantic model includes only the essential information elements that an electronic invoice needs to ensure legal (including fiscal) compliance and to enable interoperability for cross-border, cross sector and for domestic trade.

Challenges

The original EN 16931 development was driven by European Directive 2014/55/EU, which mandated e-invoicing for business-to-government (B2G) transactions. As a result, the standard lacked provisions for Continuous Transaction Controls (CTC) and comprehensive Business-to-Business (B2B) applications - gaps that would create challenges when ViDA becomes effective.

Changes

The European standards organization (CEN) approved the revision of EN 16931-1 semantic standard to align with upcoming legislative changes, including ViDA. 

This reform includes the following changes:

• New core semantic data model for B2B transactions
• Syntax bindings for CII and UBL, with new rules on mandatory and optional fields
• Extension methodology (CIUS and extensions) including industry-specific

Timelines

Updates to EN 16931-1 reform can be expected according to the timelines below:

• 23 October 2025: Date of ratification (dor) date when the Technical Board notes the approval of an EN (and HD for CENELEC), from which time the standard may be said to be approved
• 26 November 2026: Date of availability (dav) date when the definitive text in the official language versions of an approved CEN/CENELEC publication is distributed by the Central Secretariat
• 28 February 2026: Date of announcement (doa) latest date by which the existence of an EN (and HD for CENELEC), a TS or a CWA has to be announced at national level
• 31 May 2026: Date of publication (dop) latest date by which an EN has to be implemented at national level by publication of an identical national standard or by endorsement
• 31 May 2026: Date of withdrawal (dow) latest date by which national standards conflicting with an EN (and HD for CENELEC) have to be withdrawn

More information will be shared once the updated EN 16931 is published.

Between 2015 and 2016, the European Union (EU) established agreements with Andorra, Liechtenstein, Monaco, and San Marino. These agreements enable the reciprocal automatic exchange of financial account information between tax authorities in accordance with the latest EU Directive on Administrative Cooperation (DAC) and the OECD's Common Reporting Standard.

On October 13, 2025, the Commission enhanced its tax cooperation frameworks with Andorra, Liechtenstein, Monaco, and San Marino by signing amended protocols. These neighboring countries maintain significant economic ties with EU member states, making effective anti-tax fraud measures essential for ensuring a level playing field.

The recent amendments to the protocols demonstrate the EU's ongoing commitment to transparency and international cooperation. By updating these agreements to align with revised EU and OECD standards, the European Union is working to improve tax compliance and ensure fair competition globally.

A similar amending protocol with Switzerland is expected soon. Once ratified, all four protocols are anticipated to enter into force on 1 January 2026, reinforcing the EU's leadership in ensuring fair and transparent tax practices globally.

More details can be found in the European Commission's daily news.