The directive also introduces new rules for operators of online transport and accommodation platforms such as Uber and Airbnb, who will be responsible for VAT collection in future on behalf of their drivers, and house and flat renters. This is designed to help clamp down on high levels of VAT fraud across the EU, estimated at a loss of €93bn a year.

The European Commission said the move to e-invoicing would help reduce VAT fraud by up to €11bn a year and plans to fast-track the rules with a likely introduction date in 2024.

The e-invoicing system introduces real-time, transaction-based digital reporting for VAT purposes. Once operational, the system will give tax authorities in member states valuable information they need to control cross-border transactions and step up the fight against cross-border VAT fraud, while reducing administrative and compliance costs for businesses.