Tax authorities across the EU are dealing with a long-standing VAT problem. Between cross-border fraud, the growing complexity of e-commerce and the limits of periodic reporting, a sizeable share of the VAT owed each year never reaches national treasuries. That gap, known as the VAT compliance gap, came to €128 billion in 2023, equivalent to 9.5% of the total VAT owed and up 1.6 percentage points from 2022.
Carousel fraud, where the same goods are sold and reclaimed across borders to exploit VAT rules, accounts for a significant share of this. It’s also one of the hardest types of fraud to detect without real-time visibility into cross-border transactions. That’s the gap the EU’s VAT in the Digital Age (ViDA) package is designed to close, and structured e-invoicing is central to the plan.
In this article, we explain what’s changing across the EU, how it affects organizations using Dynamics 365 F&O, and how Lasernet’s e-invoicing solution helps you stay compliant.
What is ViDA, and how does it affect e-invoicing?
VAT in the Digital Age (ViDA) is a legislative package introduced by the EU to modernize and digitize the EU’s VAT system. The legislation is designed to combat VAT fraud, support the growing digital economy and reduce administrative burdens for cross-border organizations.
Part of the ViDA legislation includes digital reporting requirements based on e-invoicing. The goal is to provide EU Member States with the detailed, transaction-level information they need to combat VAT fraud, reducing it by up to €11 billion a year.
ViDA came into effect in April 2025 and will roll out in stages. Here are the main e-invoicing milestones to know:
- From April 2025, EU Member States are free to introduce mandatory domestic e-invoicing requirements without needing prior EU approval.
- From July 2030, all intra-EU B2B transactions must use structured electronic invoices aligned with EU digital reporting requirements.
What do EU e-invoicing mandates involve?
Although every EU country sets its own specific timeline and chooses its preferred platform, e-invoicing mandates across Member States share the same handful of design choices:
Structured, machine-readable formats
The days of posting a paper invoice or attaching a PDF invoice to an email are numbered. New e-invoicing mandates across the EU mean invoices must be issued in formats such as XML, UBL, Peppol BIS, Factur-X or other country-specific schemas aligned with EN 16931 requirements to ensure interoperability.
Mandatory data fields
To stay compliant with EU e-invoicing mandates, all invoices must include specific, standardized data points, such as supplier or buyer information, tax identification numbers, issue dates, itemized descriptions and line totals.
A defined delivery channel
Some countries route e-invoices through the Peppol network, a standardized digital framework that allows organizations to exchange electronic invoices, while others use a national platform, such as KSeF in Poland and Chorus Pro in France.
Real-time or near-real-time reporting
Tax authorities are moving away from periodic batch reporting. Many mandates require invoices to be cleared or reported to the tax authority at (or close to) the moment they’re issued.
Phased rollouts by company size
Many e-invoicing mandates are being rolled out in phases, starting with large businesses and extending to mid-sized and small businesses 12 to 24 months later.
The e-invoicing compliance challenge for D365 F&O users
D365 F&O does have its own e-invoicing capabilities through Electronic Reporting (ER). However, as soon as an organization operates in more than a handful of countries, the practical limits start to show.
Technical expertise
ER is a configurable tool that lets you design and adapt formats inside D365 F&O. For straightforward use cases, it works well enough. E-invoicing sits at the more demanding end of what ER is asked to do, and tends to require more specialist input than teams initially anticipate.
The work required to produce a compliant e-invoice format is complex, particularly when you’re aligning with EN 16931 standards and adding a country-specific schema on top of that. The required skill set is not one that most finance teams have easy access to.
Companies that attempt to go fully native often end up bringing in ER specialists to work alongside their team, which adds costs where they weren’t expected. Multiply this work by four, five or six different mandates, and the costs climb quickly.
Customization costs
Every customization you have to make to bridge a gap in coverage becomes something your team has to own for the entire lifetime of your ERP system. That’s true of any ERP customization project, but it hits harder with e-invoicing because mandates change frequently. Each update means reviewing, updating and retesting the customizations you’ve built.
Miss a release, and your invoices can start failing validation, which is a fast route into non-compliance. Multiply that work across every single country you trade in, and the maintenance load becomes difficult and expensive to manage. For finance and IT teams, it’s a maintenance burden that’s hard to quantify and justify.
How Lasernet solves your D365 F&O e-invoicing problem
Lasernet handles the entire e-invoicing process inside D365 F&O: generating invoices in formats including XML, UBL, Peppol BIS, Factur-X, CII, XRechnung and ZUGFeRD, submitting them to the correct destination and tracking what happens next.
The e-invoicing software gives you real-time visibility into the status of every invoice, whether it’s been delivered, accepted, rejected or disputed, so your finance team isn’t manually chasing confirmations or waiting to find out why an invoice failed.
Delivery is handled through whichever channel the mandate or recipient requires: the Peppol network via certified access points, email, web service, HTTPS, FTP or SFTP, or directly to a national platform.
Where Lasernet really earns its place in a multi-country operation is on the maintenance side. Every time an e-invoicing mandate changes (and they do change regularly), you can update formats and workflows directly in Lasernet’s low-code interface without involving developers.
Built-in validation checks every invoice against the relevant standard before it’s submitted, catching errors that would otherwise result in rejections and the manual rework that follows. And because Lasernet runs natively inside F&O, your finance team keeps working in the environment they already know well.
What role does Lasernet’s D365 F&O connector play?
Lasernet’s F&O connector is built to complement, not replace, Microsoft’s Electronic Reporting framework. It sits inside your existing F&O workflows and extends what ER can do by handling the format generation, validation, delivery and tracking that ER leaves you to solve elsewhere. With the connector, you can:
- Use Microsoft’s Electronic Reporting framework with significantly less manual configuration.
- Deliver invoices directly to the Peppol network via certified access points.
- Connect via API, FTP or SFTP for flexible delivery to any channel your recipients require.
As mandates change, Lasernet’s architecture means you’re adding or updating formats in one place, not commissioning new customizations across your ERP.
ERP Mechanics helps you get the most out of Lasernet
As a managed IT services company focused on reducing risks and cutting costs of D365 F&O and Lasernet projects, we’re the ideal partner to help you simplify e-invoicing compliance. We’ve been implementing Lasernet for over 18 years, and e-invoicing is one of the many reasons companies come to us specifically.
If you operate across multiple EU markets and you’re working out how to stay ahead of the mandates, or you’ve already hit the limits of what ER can handle on its own, we’re happy to help.
Contact us today to get the support you need to simplify D365 F&O e–invoicing compliance with Lasernet.