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Over the last few years there has been a push towards greater transparency and reporting between EU member states, to reduce fraud and simplify reporting.
This parallels similar discussions between EPPO and OLAF for greater cooperation to tackle VAT fraud that we reported on back in November 2025.
But nobody can seem to agree on how this data should be exchanged or even how much can be exchanged before breaking confidentiality.
That tension is now becoming clearer as EU governments debate the next stage of digital VAT cooperation. Everyone agrees that more data sharing is coming – the real question is how it should work.
A shared goal, different approaches
The broader direction of travel is already set. The EU’s digital tax reforms are built on the idea that faster, richer data sharing between tax authorities will improve fraud detection and streamline compliance.
If authorities can see transactions earlier and in more detail, they can identify irregularities much faster.
But once you start talking about exchanging invoice-level or transaction-level data across borders, the debate shifts. It’s no longer just about efficiency, it becomes a conversation about control, confidentiality and governance.
In other words: who gets the data, how much do they see, and where does it live?
Hungary: Keep it limited
Some countries are clearly wary of opening the floodgates. Hungary has been among the more cautious voices, warning against treating taxpayer data as something that can be widely shared across the EU.
The concern isn’t ideological so much as practical. Detailed VAT data reveals a lot about businesses – suppliers, customers, trades and pricing patterns. If that information were mishandled, it could undermine trust in the system entirely.
Hungary’s preference leans towards anonymised or aggregated data sharing. That would still allow the tax administrations to detect fraud patterns but without exposing identities and transaction details of individual companies.
Netherlands: Safeguards must be put in place
The Dutch take a slightly different stance on this. They are more comfortable with broader data sharing, but only if strong safeguards are in place.
Data exchange is seen as necessary, but they argue businesses should know exactly how their information is being used, who can access it and for what purpose.
Ireland: A more centralised future?
Then there’s the third perspective. Some policymakers are already looking beyond bilateral exchanges between tax authorities and towards centralised EU data hubs.
The idea is simple: if businesses are already reporting similar data to multiple tax authorities, why not consolidate it? A central system could reduce duplication, streamline reporting and make cross-border analysis much easier.
We’re already seeing hints of this approach elsewhere. Systems like the EU’s payment reporting database are designed to pool transaction information in a shared platform that tax authorities across the bloc can access when investigating VAT fraud.
What this means for businesses
From a business perspective, the message is fairly clear: more digital reporting and more data sharing are on the horizon.
The debate now isn’t about whether data will move between tax authorities, it’s about the architecture behind it. Will the EU rely on national systems exchanging data between themselves? Or will we see the emergence of centralised platforms handling reporting and analysis?
Either way, the amount of tax data moving around Europe is only going to increase. That means businesses will need systems that can do more than just calculate VAT. They’ll also need to provide clear audit trails and adapt to reporting frameworks that are still evolving.
In short, the future of VAT compliance won’t just be about getting the tax right – it will also be about managing the data that comes with it.
