Continuous Transaction Controls (CTCs) refer to the real-time or near real-time transmission of invoice data to tax authorities, typically via eInvoicing or digital reporting mandates. CTCs are part of a global push to modernise VAT compliance, close the VAT gap and increase transparency across business transactions.
For businesses operating across multiple jurisdictions, CTCs mark a significant shift in how indirect tax obligations are met – moving away from periodic returns and toward live reporting and validation.
Why Are Continuous Transaction Controls (CTC) Being Introduced?
Tax authorities across the globe are facing increased pressure to reduce VAT fraud and improve revenue collection. Traditional VAT reporting methods – typically retrospective, spreadsheet-driven and prone to error – can leave governments blind to discrepancies until long after the fact.
CTCs offer a solution by requiring businesses to send invoice-level data directly to tax authorities, often before or as the transaction is completed. This allows for real-time monitoring, automated validation and better enforcement.
Benefits of CTCs:
- For tax authorities: Increased visibility, reduced fraud and improved revenue collection
- For businesses: Improved data accuracy, reduced audit risk and potential process automation
Challenges of CTCs:
- High compliance costs
- ERP integration and data standardisation
- Navigating varied and evolving requirements across jurisdictions
How to CTC systems work?
CTCs are implemented through government-mandated platforms that collect transactional data in structured digital formats (e.g., XML, UBL). Depending on the country, this may take the form of:
- Pre-clearance eInvoicing: Invoices must be validated by the tax authority before being issued to the customer.
- Real-time reporting: Invoice data must be transmitted within a set timeframe after issuance or booking.
- Centralised portals: Governments provide portals through which all B2B or B2G transactions must be routed and validated.
CTC implementation across europe
European countries have taken varied approaches to CTC implementation. Below are some notable examples:
- Italy -Sistema di Interscambio (SdI)– mandatory B2B e-invoicing through the government portal in a pre-clearance process.
- Spain – Suministro Inmediato de Información (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 – Real-Time Invoice Reporting (IRTIR) – immediate reporting of sales invoice data.
- Poland – Krajowy System e-Faktur (KSeF) – is set to introduce mandatory e-invoicing from February 2026 (updated from originally January 2024) which is expected to follow Italy’s pre-clearance e-invoicing model.
- Romania – Standard Audit File for Tax (SAF-T) has begun its roll out of its SAF-T reporting requirement, which is transaction-based reporting in place of the VAT return.
- France was planned to move to mandatory B2B e-invoicing from July 2024, it is now expected September 2026, 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.
Is the EU moving towards a harmonised CTC model?
Yes – but slowly. The European Commission recognises the complexity and fragmentation of CTC mandates across member states. As a result, it has launched the VAT in the Digital Age (ViDA) initiative, which includes plans to harmonise digital reporting and eInvoicing.
The goal is to modernise the EU VAT Directive (2006/112/EC) and introduce a standardised digital reporting framework, potentially reducing compliance burdens for cross-border businesses. A revised directive is expected to phase in from 2028 onwards, though member states continue to advance their own timelines in the meantime.
Hopefully agreement on direction and process can be reached so that the burden on business can be minimised, and some form of harmonisation achieved.
What should businesses do to prepare?
Companies operating in multiple countries must stay ahead of evolving tax mandates. This means:
- Monitoring regulatory changes regularly
- Investing in digital tax and compliance platforms
- Aligning ERP systems with country-specific reporting formats
- Training internal teams or working with compliance partners
Stay ahead of CTC Mandates with Fintua
Navigating the evolving digital tax landscape requires agility, insight and the right tools. That’s where Fintua’s Comply solution comes in.
Designed for global indirect tax teams, Comply, helps you manage complex real-time invoicing, SAF-T reporting, MTD obligations and local VAT rules — all within one powerful solution. Whether you’re preparing for upcoming mandates in France or Poland, or managing existing obligations in Italy or Spain, we’ve got you covered.
