Tax administration increasingly operates through large amounts of data, including structured invoices, third-party reports, platform information, and automated risk analysis. This article defines electronic compliance (e-compliance) as the legally structured use of digital infrastructure to generate, transmit, verify, analyze, and act upon tax-relevant data where the system affects the taxpayer’s legal or procedural position. It compares the European Union and the United States through a functional and institutionally sensitive method. The EU analysis combines the supranational framework created by the VAT in the Digital Age package, the Directive on Administrative Cooperation, the GDPR, the Charter of Fundamental Rights and the AI Act with an overview of electronic-invoicing and reporting models across all 27 Member States. The US analysis examines federal information reporting, IRS automation and AI governance, tax confidentiality, the Privacy Act, tax procedure and the continuing diversity of state sales-tax systems.
The comparison shows that the conventional contrast between a rights-oriented EU and an efficiency-oriented United States is too simplistic. EU law provides a more explicit horizontal and ex ante framework, but its practical operation varies across national systems and does not protect companies as such under the GDPR. US law contains strong tax-specific protections for confidentiality, notice and adjudication, but its safeguards for upstream data analytics are more fragmented and often more remedial than preventive.
The article identifies three principal developments: enforcement is moving closer to the taxable event; administrative savings may coexist with transferred software, correction and evidential costs; and the central measure of taxpayer protection can be identified with the practical ability to understand, challenge, and correct consequential uses of data. It concludes by proposing a model of accountable compliance by design based on four connected requirements: clear authority and purpose, reliable data and infrastructure, meaningful contestability, and effective oversight and remedy.