What are Continuous Transaction Controls?

Continuous Transaction Controls (CTCs) Explained

CTC (Continuous Transaction Control) is the term used to describe mandatory “real time” invoice reporting and validation by the tax authorities through e-invoicing or transaction listings.

CTCs allow tax authorities to collect data on business transactions directly from the businesses management systems in real-time or near real-time.

We have seen CTC being introduced in several EU countries to date in various forms:

• Italy SdI – mandatory B2B e-invoicing through the government portal in a pre-clearance process.
• Spain SII – “real time” reporting of transactional data, via an automated XML feed, within 4 days of the date of the sales invoices and 4 days from the date the purchase is “booked” to the company’s accounts.
• Hungary RTIR – immediate reporting of sales invoice data.

Other member states have also announced their intention to introduce a form of CTC:

• Poland is set to introduce mandatory e-invoicing from January 2023, which is expected to follow Italy’s pre-clearance e-invoicing model.
• Romania has begun its roll out of its SAF-T reporting requirement, which is transaction-based reporting in place of the VAT return.
• France is moving to introduce mandatory B2B e-invoicing from July 2024 in the form of a “Y model”, similar to Mexico, where invoices are validated by a Certified Provided prior to being reported to the government, through its Chorus Pro B2G e-invoicing infrastructure.

EU moving towards CTC Model

We can see that there is a big move towards CTC’s around Europe but each member state is considering it own version.

This, inevitably, which leads to an increased compliance burden for businesses operating across multiple jurisdictions. In response to this, the EU Commission has launched a review of EU Digital Reporting Requirements to try to bring some harmonisation to e-invoicing and transaction-based reporting.

This review should lead to a proposed amendment of the EU VAT Directive 2006/112/EC by the end of 2022, and a possible implementation of change by 2024.

Hopefully agreement on direction and process can be reached so that the burden on business can be minimised, and some form of harmonisation achieved.

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