The primary challanges in developing the CESOP reporting solution included:

1. 1. Handling Large File Uploads:
   PSPs often need to upload substantial XML and CSV files, sometimes exceeding 1 GB and millions of transactions. Traditional cloud proxies, such as Cloudflare, often limit maximum upload sizes, requiring alternate methods for large file transfers. Ensuring efficient upload, processing, and memory management for these massive files posed a significant technical challenge.
2. 2. Efficient Data Validation:
   Real-time estimation of final XML file size was necessary to comply with country-specific maximum file size constraints, however ensuring the accuracy and integrity of large datasets without excessive memory consumption is crucial.
3. 3. Country-Specific Data Transformation:
   Adapting data to meet varying CESOP reporting formats across different EU countries. Local TAs require additional or modified data points and may enforce different file-size caps.
4. 4. Correction Flow Management:
   Simplifying the process for users to correct errors identified during data submission involves partial rejections, full rejections, and possible file deletions. Clients needed a user-friendly approach to rectify errors and resubmit only the impacted data.
5. 5. Encryption and Integration with Local Tax Authorities (TA):
   Certain TAs use outdated and niche encryption methods that can be challenging for a .NET-based cloud project. Furthermore, it is not uncommon for TA systems to be inconsistent, poorly documented, and completely lacking test environments, making integration significantly more time-consuming.
6. 6. Version Control:
   With frequent schema updates the system had to quickly adapt to changing data structures and submission protocols. Clients required country-specific version controls to accommodate multiple Tax Authority requirements simultaneously.

To address these challanges, DGITAL Labs implemented the following solutions:

1. 1. Direct Azure Blob Storage Uploads:
   Bypassing traditional upload limitations, large files are uploaded directly to Azure Blob Storage, accommodating files up to 1 GB or more. This approach also improves transfer speed and ensures a seamless user experience.
2. 2. Stream-Based Data Processing:
   Utilizing chunk-based stream processing allows efficient validation and transformation of large files, minimizing memory usage and enhancing performance. This way the validation can occur on-the-fly, and the system can identify issues without loading the entire file into memory.
3. 3. Country-Specific Data Transformation:
   Implementing stream-based processing enables on-the-fly data transformation as well to meet specific reporting requirements of various TAs. By leveraging a custom low-level XML writer, the solution can write to the output stream without creating large in-memory strings, thus preserving significant server resources.
4. 4. Correction Flow Management:
   We designed an intuitive user interface that surfaces only the most relevant error messages, enabling clients to self-correct data swiftly. This streamlined process reduces operational overhead and speeds up compliance.
5. 5. Version Control:
   By allowing country-specific CESOP version management, the solution can quickly pivot when TAs introduce new formats. This ensures compliance continuity, even amid the “version chaos” that often arises from mid-year or uncoordinated regulatory updates.