VATupdate Newsletter Week 13 2026

AIM

In Il Principe, Niccolò Machiavelli explains that a wise ruler should aim higher than the target he truly wants to hit. Like an archer compensating for the limits of his bow. A little strategic overshooting. A nudge. A gentle arc.

Interesting image. And reminding me of ViDA.

But first, some highlights from last week:

EU and Australia strengthen relations with Trade Agreement.
Oman, Namibia, Malawi, Chad, Bahrain… Everybody’s doing E-Invoicing
Just like Europe, where more countries join in on ViDA.
ECJ cases on foreign export prices for customs valuation, implicit taxation for non-EU travel services, and Greenhouse gas derivatives.

So, what do Machiavelli and ViDA have in common?

Machiavelli advises rulers to aim high to reach their actual target. And the EU (and national governments) are certainly doing that. Because somewhere along the way, someone in a government building thought:

“If we aim really high, surely businesses will magically become perfectly compliant!”

You can almost hear Machiavelli whispering: “No… not what I meant…”

Technology, of course, made this dream feel achievable. Ever since Microsoft Excel arrived in 1985, businesses have been able to churn out data like it’s going out of fashion. They collect it, sort it, analyse it, colour-code it. And all before their morning coffee.

And tax authorities watched this happen with the same expression a kid has when he realises, he can ask for more candy.

“Wow, look at all that data!”

“YES, PLEASE!”

And so began the golden age of asking businesses for information they don’t have yet, will never have, or could only produce if they invent time travel.

This is exactly what’s happening with e-invoicing and real-time reporting. It’s the bureaucratic equivalent of saying: “Could you tell us what happened next week? We need it before lunchtime.”

A pre-filled VAT return sounds delightful. Right up until businesses realise they are expected to confirm data they’ve never seen, from invoices they haven’t reviewed yet, for goods that may or may not be in the correct warehouse, depending on who moved them during lunch break.

If the trader enters a contract in the system, some information is already fixed. Logistics may or may not use or adjust that information, and the system automatically produces an invoice. And this is shared with the tax authorities before the finance department or VAT team has even seen it.

Normally, you could fix mistakes during the process. A tweak here, a correction there, a sigh, a coffee, and off you go.

But real-time reporting says:

“No corrections. No updates. No coffee. Only perfection.”

It’s like someone took Machiavelli’s archer metaphor… and replaced the bow with a rocket launcher.

Which brings us back to the key question: Did tax authorities genuinely aim higher (as Machiavelli suggests) to compensate for imperfections? Or did they simply launch the arrow straight into the stratosphere and assume businesses would evolve wings?

The goal of reducing fraud is admirable. We all want that. But there is a difference between aiming a bit high…

…and firing the VAT arrow into a region of the human anatomy traditionally reserved for proctologists.

Because Machiavelli’s message was simple:

Aim higher, yes. But aim wisely.

A higher aim implies the arrow must overcome wind and gravity. In VAT terms: businesses may not be able to comply perfectly from Day 1.

Right now, many businesses feel like the aim has shifted from “fraud reduction” to “let’s see how many administrative somersaults a normal human can perform before collapsing.”

If Machiavelli were alive today, he’d probably put down his quill, look at real-time reporting, and say:

“Gentlemen… that is not a bow. And that is definitely not how you aim.”

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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