Regulatory updates - EU

The European Business Wallet is proposed under the EU's wider agenda to support a well-functioning single market. Currently, the use of digital tools in business operations varies significantly among Member States, which hampers fair competition and disproportionately affects SMEs and micro-businesses. The proposal lays the groundwork for a harmonized digital framework expected to generate up to 150 billion EUR in yearly savings for businesses.

Who is affected by the proposal?

The proposal targets both public sector bodies and businesses.

• Public sector bodies: Would be required to offer the core functions of the European Business Wallet in interaction with businesses.
• Businesses: No obligations are proposed. Businesses may choose to use the European Business Wallet in interactions with public entities, and in their own commercial operations.

What are the use-cases of the European Business Wallet?
The European Business Wallet aims to reduce administrative burden by allowing businesses to prove their identity, apply electronic signatures, seals and timestamps according to current eIDAS regulations, and exchange data digitally with full legal value. Potential use-cases include:

• Know-your-customer (KYC), due diligence and contractual onboarding
• Branch creation, cross-border VAT registrations and startup funding
• B2G interactions such as eProcurement, including submission and receipt of documents and official notifications, licensing, and regulatory reporting (including ViDA VAT attestation and transaction data, and sustainability reporting).

The proposal underlines that the Business Wallet will build on the architecture and trust framework defined for the European Digital Identity Wallet initiative for natural persons. It also highlights the need for interoperability between systems to access and exchange European Business Wallet data. Detailed technical information on how integration with the European Business Wallet will be enabled is yet to be published by the European Commission in further implementing acts.

Timeline

The proposal will be submitted to the European Parliament and Council for approval. Once adopted, all levels of public administration across the EU, would have two years for implementation, with transitional measures in place to support adaptation of administrative and IT systems.

To create a more uniform and interoperable e-invoicing framework for public procurement across Member States, the EU Commission has announced plans to revise the EU’s rules on e-invoicing in public procurement.

The initiative aims to address challenges that have prevented the e-invoicing Directive from fully achieving its objectives. These challenges include a lack of uniformity in invoicing rules, differences in national transmission and certification practices, and uneven adoption of the EU e-invoicing standard.

Key elements of the initiative

• Introduction of the mandatory issue of e-invoices compliant with the European e-invoicing standard by suppliers;
• Extension of the e-invoicing Directive’s scope to cover B2G transactions below the EU public procurement thresholds;
• Introduction of common transmission methods based on the e-Delivery Building Block and harmonized requirements for certification schemes.

The proposed changes could be used as an alternative or supplement. The Commission emphasized the importance of utilizing existing EU instruments and initiatives for planned changes. This approach aims to avoid unnecessary costs while focusing on opportunities to simplify processes and reduce administrative burdens.

The planned changes are expected to result in:

• Greater interoperability across the EU through harmonized formats and transmission channels;
• Reduce costs for businesses through reduced complexity and consolidation of e-invoicing solutions;
• More efficient public procurement processes and lower market-entry barriers.

Next steps

A call for evidence is open for four weeks until December 17, 2025, and feedback can be given here.

Following the call for evidence, a 12-week public consultation and targeted consultations with relevant stakeholders will be conducted, followed by Commission adoption planned for Q4 2026.

Following investigations by the European Public Prosecutor’s Office (EPPO), the European Commission recognizes that the main challenges related to the VAT gap lie in cross-border trade between Member States. Estimates indicate an annual loss in VAT revenue from fraudulent intra-Community trade of between EUR 12.5 billion and EUR 32.8 billion, according to 2023 Eurofisc (the European network of national VAT anti-fraud officials) estimates.

The proposal aims to address these challenges by enabling increased cooperation and data sharing, allowing EU anti-fraud institutions and the Eurofisc network to detect complex, cross-border fraud schemes more effectively.

Need for collaborative anti-fraud detection and data access

Currently, the European Public Prosecutor's Office (EPPO) and the European Anti‑Fraud Office (OLAF) obtain VAT information and cooperate with national tax authorities under different legal frameworks, means and conditions.

The proposal allows for

• Immediate access to VAT data for EPPO and OLAF to streamline investigations.
• Real-time intelligence sharing between EU agencies and national authorities via Eurofisc.
• Leveraging the VAT in the Digital Age (ViDA) package to modernize fraud detection.

Next steps

The proposal will be submitted to the European Parliament and Council for adoption.

Pagero – a ViDA-ready service-provider

The measures highlight the increasing importance of accurate VAT reporting across the EU. While they are not targeted at ordinary businesses, they underline the need to prepare for upcoming e-invoicing and reporting requirements. Learn more about how Pagero can help businesses comply with ViDA’s e-invoicing and digital reporting requirements here.