Is Europe in the ban of the VAT Directive simplification on e-Invoicing ?

[2014]Update on the adoption of the proposed changes of the VAT Directive:

On 16 April 2014 the European Commission published the Directive 2014/55/EU which states that Member States will have to implement e-invoicing at the latest by 27 November 2018

Reference(s):
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014L0055

End Update

[2011]Update on the adoption of the proposed changes of the VAT Directive:

On 2 December 2010 the European Commission published their communication “Reaping the benefits of electronic invoicing for Europe” (COM(2010) 712 final) and their decision “Setting up the European Multi-Stakeholder Forum on Electronic Invoicing (e-invoicing)”(C(2010) 8467 final).

The Communication identifies a set of actions to support the uptake of e-invoicing by ensuring legal certainty and promoting the development of interoperable e-invoicing solutions based on a common standard, paying particular attention to the needs of SMEs. The Communication also invites the Member States to take action and promote e-invoicing at national level. All actions aim at making e-invoicing the predominant method of invoicing by 2020.

Reference(s):
2010/C 326/0 of 2 November 2010

COM(2010) 712 final of 2 December 2010

C(2010) 8467 final of 2 December 2010

On 13 July 2010 the Economic and Financial Affairs Council accepted the new revised VAT Directive 2010/45/EU amending the Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing. Changes issued with the proposal COM/2009/0021 final - CNS 2009/0009 from 28 January 2009 were only for a small part taken over. The most important change proposed with COM/2009/21 on removing the article 233 has been rejected. However the rules for ensuring the authenticity of the origin and integrity of the content are now extended with the use of business controls as the primary way.

Each taxable person shall determine the way to ensure the authenticity of the origin, the integrity of the content and the legibility of the invoice. This may be achieved by any business controls which create a reliable audit trail between an invoice and a supply of goods or services.

Also a proper and clear definition of what is understood with the terms authenticity and integrity are presented.

‘Authenticity of the origin’ means the assurance of the identity of the supplier or the issuer of the invoice.

‘Integrity of the content’ means that the content required according to this Directive has not been altered.

Reference(s):
CNS/2009/0009 Procedure File

VAT Directive 2010/45/EU

End Update

The European Commission on 28 January 2009 adopted a proposal to change the VAT Directive 2006/112/EC (from 28 November 2006) with respect to invoicing rules. The main objectives are to reduce burden on business, increase the use of e-Invoicing, support small and medium sized enterprises (SMEs) and help Member States tackle fraud.

The foundation of the proposal is based on “equal treatment of paper and electronic invoices” in a technology neutral way by removing the conditions for an Advanced Electronic Signature (AES) and Electronic Data Interchange (EDI). The reasoning is that e-Invoicing is part of a larger process where every process step contributes to authenticity and integrity of the trade transaction.

Several Member States and Solution Providers believe these guarantees can only be provided by electronically signed e-invoices. Removing the requirement to guarantee the authenticity of origin and integrity of content by means of pre-defined technological solutions, such as EDI and Electronic Signatures, is therefore the most challenging from a political and governmental perspective for the coming years. It requires a “paradigm shift” in thinking about audit management processes and strategies by all parties involved, whether that be Tax Authorities, Solution Providers or Small, Medium-sized and Large Companies.

Since 2006 stakeholders in Europe have been working hard on developing measures and establishing procedures for simplifying, modernising and harmonising the VAT Invoicing Rules. All the reports of experts in the field, opinion statements and position papers issued by Federations, Associations, Member-Based Communities, Government Authorities and Public Administrations indicate that a majority of stakeholders supports the simplification of e-Invoicing by establishing equal treatment of paper and electronic invoices.

The Expert Group on e-Invoicing installed by the European Commission on 31 October 2007, tasked to propose a European e-Invoicing Framework (EEI Framework), has issued their Final Report on November 2009. The recommendations of the Expert Group and the reactions from stakeholders in Europe will be taken into account by the European Commission in developing its further position on e-Invoicing.

See the final report and the consultation document: http://ec.europa.eu/enterprise/newsroom/cf/itemshortdetail.cfm?lang=nl&item_id=3875

See the final report: http://ec.europa.eu/internal_market/consultations/docs/2009/e-invoicing/report_en.pdf

The Expert Group on e-Invoicing in their Final Report ascertain that there are two key issues:
- The present European landscape of e-invoicing legislation is disharmonised. The methods set out in Article 233 of Directive 2006/112/EC have been implemented in Member States’ national legislation in widely different ways. This leaves trading parties experiencing difficulties in finding the right degree of clarity and legal certainty to encourage adoption of e-Invoicing.

- Internal business controls did not receive appropriate attention in the current legislative framework and its implementation. This is unfortunate because such controls are essential to all invoicing processes and, for most, whose systems are mature and robustly auditable, can actually provide the necessary assurance and without creating technical and operational complexity.

Based on the principles of equal treatment between paper and electronic invoices, technology neutrality and internal business controls, the Expert Group issued their recommendations. With regard to article 233 they recommend that “No legislative or other requirements should be imposed on electronic invoices above those that exist for paper invoices today”.

They furthermore state that “The Commission’s January 2009 proposal for a new VAT Directive (COM(2009) 21 final), should be adopted by all Member States and transposed into national legislation. In particular the provisions of Articles 232–237 of the current Directive on the Common System of Value Added Tax (2006/112/EC) should be removed so as to shift from technology based requirements to requirements based on equal treatment, technology neutrality and internal business process controls”.

Additionally they state “In the short term, pending the adoption of the new VAT Directive, those Member States who have not yet done so, should be encouraged to implement the option of ‘other means’ as provided for in the current VAT directive (Directive 2006/112/EC) so as to enable the practical implementation of the Expert Group’s Code of Practice”.

Despite the efforts of all those people some stakeholders start raising their concerns on the recommendations of the Expert Group and on the measures announced by the European Commission. The contributions of these stakeholders in normalisation and standardisation committees aimed at crafting meaningful and long-term simplification and harmonisation of e-Invoicing have been intense and fruitful.

Although the European Commission has not yet decided on the final outcome of the Regulatory Requirements for Electronic Invoicing recent announcements of stakeholders are jeopardizing the viability and sustainability of the hard work done and the future position of e-Invoicing.

In my opinion Europe needs an intermediate state to overcome all the discussions and enable all stakeholders to leverage technological, functional and legal innovations in the domain of e-Invoicing, e-Archiving and e-Procurement. In that respect the best European leaders can do now is to reinstate Article 233 in the proposed VAT Directive and add to it as the first option the use of a Business Control and Tax Control Framework as extensively described in the CWA 16047 - CEN / ISSS eInvoicing Compliance Guidelines or CEN / Fiscalis e-Invoicing Good Practice Guidelines.

See first version:
http://www.epractice.eu/files/media/media2331.pdf

Latest version can be found on:
http://www.e-invoice-gateway.net/knowledgebase/documents/

The consultation on the Final Report of the Expert Group on e-Invoicing will definitely shed some lights on the visions and standpoints of the different parties.

Today [16 March 2010] the European Ministers of Finance apparently decided not to await the outcome of the consultation and during the ECOFIN Meeting adopted a revised version of the VAT Directive containing changes reinstating the article 233 adding to it the option of the Business and Tax Control Process Framework.

Looking at the evolution of Electronic Invoicing in Europe one can conclude a lot has happened since the European Commission started in 2001 with amending the regulatory requirements for Electronic Invoicing in Europe. In general almost all stakeholders called upon to support the principle of equal treatment of paper and e-invoicing on authenticity and integrity.

Let us have a look at the developments that took place in the past years:

- 2001

***[20 December 2001] The Council Directive 2001/115/EC of 20 December 2001 amending Directive 77/388/EEC with a view to simplifying, modernising and harmonising the conditions laid down for invoicing in respect of value added tax.

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001L0115:en:NOT

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:015:0024:0028:EN:PDF

- 2002

***[24 October 2002 - 30 September 2003] Final Report and Recommendations of the CEN / ISSS e-Invoicing Focus Group on Standards and Developments on electronic invoicing relating to VAT Directive 2001/115/EC

The CEN / ISSS e-Invoicing Focus Group (e-IFG) on request of the European Commission DG Taxation and DG Enterprise investigated the issues surrounding standards relating to e-Invoicing and VAT in relation to the new Council Directive 2001/115/EC, which had to be implemented by Member States by 1 January 2004.

The scope of the CEN/ISSS e-Invoicing Focus Group (e-IFG) has been:
- To provide an overview of the standardization aspects of electronics invoicing
- To assess existing standards and their implementation
- To provide proposals for additional activities should these be considered necessary

The group needed also to ascertain that the standardization framework ensured ‘Authentication and Integrity’ requirements as stated in Directive 2001/115/EC were met in a cost effective manner, whilst maintaining an adequate level of interoperability and functionality.

Particular attention had to be paid to the electronic signature and EDI standardization issues, as well to those posed by technology advances, e.g. web services. The group had also to examine archiving.

The e-IFG concluded:
- With e-Business being established in large and small enterprises, there is an urgent requirement from business and tax administration to have a standardized approach to e-Invoices, which meets the needs of all business and tax administrations and is of central importance for the success of ecommerce.

- Although standards on EDI and on electronic signatures are available to a certain extent, too many issues on interoperability surround especially cross border electronic invoicing and VAT, and too diverse legislation on electronic signatures and VAT in Member States prevent business and administration to make adequate use of European harmonisation in electronic commerce.

See recommendations:
http://einvoicegw.campus02.at/upload/upload/2_final_e-invoicing_report.pdf

Download recommendations via:
http://www.cen.eu/cen/Sectors/Sectors/ISSS/Focus/Pages/default.aspx

- 2005

***[16 November 2005] e-Invoicing and e-Archiving taking the next step, a European Survey by PricewaterhouseCoopers

In July and August 2005, on request of PricewaterhouseCoopers Belgium the PwC’s International Survey Unit in Belfast undertook a research study into the dematerialization of invoices in Europe.

With the survey, they wanted not only to gain insight into the current state of the adoption of e-Invoicing and e-Archiving in Europe, and what it is that drives companies to engage in e-Invoicing projects, but also to identify potential obstacles to the further widespread use of these digitisation techniques.

In their survey report PwC gave a brief overview of e-Invoicing and e-Archiving, together with their definitions and a summary of the regulatory conditions at that moment in a European context.

PwC concluded that more generalised adoption was required, together with internal process improvements and better use of technological solutions. They also presented their recommended approach to assist clients in their e-Invoicing and e-Archiving projects.

See survey report:
http://www.pwc.com/en_LU/lu/tax-consulting/docs/pwc-einvoic2005.pdf

See press release:
http://www.pwc.com/en_BE/be/press/2005-11-15-einvoicing-earchiving-en-pwc-05.pdf

- 2006

***[28 November 2006] Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax [Ref: OJ L 347, 11.12.2006, p. 1–118 - CNS 2004/0079 and ID: 32006L0112]

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:0118:EN:PDF
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32006L0112:EN:NOT

- 2007

***[July 2007] European Electronic Invoicing (EEI) Final Report of the Informal Taskforce

In July 2007 the Informal Taskforce on e-Invoicing published their Final Report on e-Invoicing.

The Informal Taskforce states “European electronic invoicing (EEI) is set to be a fundamental enabler in contributing to European competitiveness. Realising electronic invoicing could significantly reduce supply chain costs by 243 billion EUR across Europe, as well as helping to streamline business processes and help drive innovation.”

In their view technical complexity, legal uncertainty and operational constraints (trust and operational issues) hamper a common European approach.

They conclude with recommending the establishment of an European Electronic Invoicing Steering Committee. “A policy level cross-European activity on e-Invoicing is needed to help counter act current fragmentation, to tackle barriers to EEI and establish the basis for innovative market driven solutions. The formation of a EEI Steering Committee under the EC will do exactly that. In combining knowledge and expertise to harmonise approaches it should be possible to establish an umbrella EEI Framework. This Framework would set out a conceptual structure that supports the provision of the e-Invoicing services in an open and interoperable manner across Europe.”

See Final Report:
http://ec.europa.eu/enterprise/sectors/ict/files/2007-07-eei-final-rep-3-2_en.pdf

***[31 October 2007] Commission Decision 2007/717/EC of 31 October 2007 setting up an Expert Group on electronic invoicing (e-Invoicing)

At the end of 2007 the Expert Group on e-Invoicing was set up by the European Commission Decision 2007/717/EC of 31 October 2007. The Expert Group was tasked to develop a European e-Invoicing Framework (EEI Framework).

See document:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:289:0038:0044:EN:PDF

- 2008

***[12 June 2008] Status report from the Expert Group on e-Invoicing

On 12 June 2008 the chair of the Expert Group on e-Invoicing reported three activity streams of work were underway including 1) development of a compelling set of high level Business Requirements, 2) development of proposals to simplify and evolve the Legal and Regulatory framework for e-Invoicing and 3) development of a vision for how market could better respond to user needs through Network solutions supported by Standards.

See document:
http://ec.europa.eu/enterprise/sectors/ict/files/einvoicing_status_report_final_en.pdf

***[2 July 2008] Open Letter Chairman of the e-Invoicing Expert Group

On 3 July 2008 the Chairman of the e-Invoicing Expert Group published an open letter to present the proposals for improving the legal and regulatory environment for electronic invoicing between trading entities within Member States of the European Union.

The Chairman explained “e-Invoicing is complicated by widely different transpositions of the VAT Directive into Member State law and the options which the VAT Directive permits Member States to select. The three methods for the guarantee of the authenticity and integrity of data, allow Member States to create substantial variations in their local application of the permitted options, leading to them being applied differently in practice from one Member State to another.”

With regard to these methods the Chairman noted that Electronic Signatures would not be viable for intra-community transactions and that the electronic signature rules would be difficult to implement in practice, due to the different procedures in use and the protective attitude of a number of Member States towards their own Certification Authorities.

The Chairman concluded “The unintended consequences of the current situation are many and include a lack of harmonised practices, legal uncertainty, high cost and complexity, barriers to EU-wide electronic commerce and disincentives to innovation among all players in the value-chain, i.e. users, service providers, and tax authorities.”

The Chairman then addressed the widely felt sentiments of all stakeholders in Europe that there is too much emphasis on the processes and technology required to support the secure transmission (and storage) of e-Invoices. Moreover the Chairman stated that the consistent application of business controls should become the most important reassurance to Tax Authorities that VAT processes are correct and appropriate, whereas tax auditors should not have a different audit approach for paper-based and e-invoicing solutions.

Thereafter the Chairman outlined the starting principles of the Expert Group proposed for adoption by all stakeholders and summarized the proposal of the Expert Group:

“The Expert Group proposes that a new European E-Invoicing Recommendation (EEI Recommendation) is agreed and adopted by the Commission, and that Art. 233 section 1 a) and b) should be deleted and replaced by a reference to the EEI Recommendation.”

“As a further element of the required solutions to existing uncertainties in the environment for e-Invoicing, we propose that the provisions for the use of electronic signatures in relation to VAT compliance in particular and for their use in general, enjoy a much greater and preferably full harmonisation across the EU, including mutual recognition between Member States.”

See document:
http://ec.europa.eu/enterprise/sectors/ict/files/eeicoverletter_en.pdf

***[22 September 2008] Taskforce Reply to EEI Draft Recommendations

On 22 September 2008 a Corporate Taskforce came together at BUSINESSEUROPE to announce their support and clarify their position towards the draft recommendations issued by the Expert Group on e-Invoicing. The participants in the Taskforce were members from German Business Federation (BDI), Finnish Business Federation (EK), Nokia Oyj, General Electric, Shell, Volvo, Swedish Business Federation (SN), UEAPME, EUROCHAMBRES, BUSINESSEUROPE.

The reply of the taskforce can be found on the website of the UEAPME, the European Association of Craft, Small and Medium-sized Enterprises:
http://www.ueapme.com/IMG/pdf/Corporate_Taskforce_Reply_EEI_Draft_Recommendations_22-9-2008.pdf

In their introduction they clearly state that they strongly support the key aim of the draft recommendations to ensure equal treatment of paper invoices and e-invoices. They consider this aspect the fundament for shaping an environment that allows e-invoicing to grow. They also indicate that equal treatment should form the basis for the development of a technology neutral solution for e-invoicing in the Expert Group. Whether in paper or in electronic format, invoices always sit on top of other legal documents (e.g. contracts, purchase orders etc.) related to the respective transaction and the same business internal control processes are applied to both of them.

With regard to article 233 they clearly state that the article should express “equal treatment of paper and e-invoicing on authenticity and integrity and that the internal controls at supplier and customer level should safeguard this”. Additionally they state that “although an electronic signature is a method to prove authenticity of origin and integrity of content, the issuance of e-invoices should not trigger the obligation of an electronic signature if authenticity of origin and integrity of content can also be proved by other means”. In their opinion “Internal business controls, if properly implemented, should be a sufficient reassurance to tax.”

***[26 September 2008] Opinion Statement of the CFE Fiscal Committee on VAT formalities, Review of the existing legislation regarding invoicing from 26 September 2008

On 26 September 2008 the Fiscal Committee of the Confédération Fiscale Européenne (CFE) published their Opinion Statement on the “Review of the existing legislation regarding invoicing”.

The CFE expressed its major concern about the requirement of sophisticated encryption methods such as for example advanced electronic signatures, for both the electronic invoicing and electronic archiving.

In their view there is no evidence that such encryption procedures are necessary. They also stated that “Complex national encryption requirements imposed on the issuers of invoices are totally useless when the VAT is due from the customer, rather than the supplier, which is the position with many international or intra-community supplies”.

See document:
http://www.cfe-eutax.org/node/1690

***[22 October 2008] Opinion of the HLG on the reform of the invoicing rules in the VAT Directive

On 22 October 2008 the High Level Group (HLG)of Independent Stakeholders on Administrative Burdens issued their opinion on the reform of the VAT invoicing rules in Directive 2006/112/EC (VAT Directive).

The High Level Group of Independent Stakeholders on Administrative Burdens was set up inter alia to advise the European Commission on suggestions for administrative burdens reduction measures coming from the Consortium (Capgemini, Deloitte and Rambøll management) and from stakeholders through the Internet consultation.

The HLG noted “The VAT invoicing rules leave too many options to Member States so that national requirements for electronic invoices differ between Member States, which increases costs in case of cross-border transactions and makes e-invoicing less attractive. In particular, different rules regarding the authenticity of the invoice have been identified as one among several reasons why the overall market penetration of e-invoicing across the EU is still low.”

The HLG called upon the European Commission to present an ambitious legislative proposal removing unnecessary obligations in the area of VAT invoicing rules and enabling enterprises throughout Europe to make maximum use of the savings potential presented mainly by electronic invoicing and electronic archiving.

The HLG furthermore stated “The guiding principle should be the equal treatment of paper and electronic invoices whilst encouraging enterprises to use electronic invoicing” and they called upon the European Commission and the Member States to eliminate requirements specifically imposed on electronic invoicing and electronic archiving which may hinder the uptake of these technologies and prevent the realisation of significant cost savings.

Finally the HLG stated “Any European approach developed for the purpose of promoting e-invoicing should be harmonised and technologically neutral, as well as flexible enough, so as not to impose additional financial burdens on businesses. It should be based on the mutual recognition of national standards. The HLG calls upon the Commission and Member States to make sure that no new financial or administrative burdens are created in the context of the implementation of the planned reform.”

As such the HLG also emphasized that the equal treatment of paper and e-invoices should not lead to new requirements for paper invoices that are more burdensome than the current ones.

See document:
http://ec.europa.eu/enterprise/policies/better-regulation/files/opinion_on_va_invoicing_reform_en.pdf

***[3 November 2008] A Study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC)

On 3 November 2008 PricewaterhouseCoopers published their final report in the framework of the study on the Invoicing Directive (2001/115/EC) now incorporated into the VAT Directive (2006/112/EC), as applicable on 1 January 2008.

The overall objective of this study and the resulting report was to review whether, for the four principal areas of invoicing, improvements can be made to the legislation in order to further harmonise and modernise those rules so as to reduce the burdens on business and stimulate the use of electronic invoicing.

According to the call for tender, the four principal invoicing areas are:
- the requirement to issue an invoice, including self-billing and outsourcing (articles 220 to 225 of the VAT Directive);

- the content of an invoice (articles 226 to 231 and article 238 of the VAT Directive);

- electronic invoicing (articles 232 to 236 of the VAT Directive);

- the storage (archiving) of invoices (articles 244 to 249 of the VAT Directive). Besides the four main invoicing areas, the study has also considered other parts of the VAT Directive that interact with the invoicing requirements and could possibly create problems or ambiguities.

See the Final Report:
http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/traders/invoicing_rules/phase_4_final_report_en.pdf

- 2009

***[27 January 2009]Mid-Term Report of the European Commission Expert Group on e-Invoicing

On 27 January 2009 the Mid-Term Report of the European Commission Expert Group on e-Invoicing was published.

See document:
http://ec.europa.eu/internal_market/payments/docs/einvoicing/report-2009_01_27_en.pdf

All Stakeholders were invited to provide their comments and opinions on the Mid-Term Report to the Expert Group at the latest 13 March 2009. In a summary of the comments by the European Commission, Internal Market and Services DG a summary of the comments has been produced. With respect to equal treatment they stated:

“While the principle of equal treatment between electronic and paper invoices was explicitly endorsed by 7 of 13 respondents, others shared their concern that this principle without further specification would lead to differing interpretations across Member States and thereby add to fragmentation. These latter respondents highlighted the proven value of advanced electronic signatures in that context”.

See document:
http://circa.europa.eu/Public/irc/enterprise/e-invoicing/library?l=/mid-term_report/feedback-midterm/_EN_1.0_&a=d

All responses can be found on:
http://circa.europa.eu/Public/irc/enterprise/e-invoicing/library

***[28 January 2009] VAT: Commission proposes a review of the VAT rules on invoicing with a view to reduce burdens on business and to help Member States tackle fraud [Ref: IP/09/132]

See document:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/132

***[28 January 2009] Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing [Ref: COM/2009/0021 final - CNS 2009/0009 and ID: 52009PC0021]

In the article 237 of the Council Directive 2006/112/EC of 28 November 2006 the Commission was requested to present to the Council of the European Union by 31 December 2008 a report on the technological developments in e-invoicing and a proposal amending the conditions applicable to electronic invoicing in order to take account of future technological developments in that field.

The overriding aim of the proposal on invoicing is to create a modern set of harmonised rules that simplifies the invoicing requirements for businesses whilst allowing tax administrations effective means of ensuring that tax is paid. The focus of this proposal is to reduce the burdens stemming from the invoicing rules. In particular it aims to ensure the acceptance by tax authorities of electronic invoices under the same conditions as applied for paper invoices.

To promote e-invoicing this proposal aims to eliminate the barriers to e-invoicing in the VAT Directive by removing the differences between invoices sent by electronic means and those sent on paper, thereby ensuring the method of transmission is neutral.

This proposal includes also measures to help tax authorities better tackle VAT fraud. These measures include tightening up the rules on the role of the invoice in VAT deduction and enabling speedier exchange of information on intra-Community supplies.

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52009PC0021:EN:NOT
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0021:FIN:EN:HTML

***[28 January 2009] Communication from the Commission to the Council - The technological developments in the field of e-invoicing and measures aimed at further simplifying, modernising and harmonising the VAT invoicing rules [Ref: COM/2009/0020 final and ID: 52009DC0020]

In the article 237 of the Council Directive 2006/112/EC of 28 November 2006 the Commission was requested to present to the Council of the European Union by 31 December 2008 a report on the technological developments in e-invoicing and a proposal amending the conditions applicable to electronic invoicing in order to take account of future technological developments in that field. This communication presents the technological developments in the field of e-invoicing and measures aimed at further simplifying, modernising and harmonising the VAT invoicing rules.

To meet the requirement to report on the technological developments in e-invoicing a study on invoicing was conducted for the Commission. The invoicing study does not mention any specific technology as the preferred method for the safe transmission and receipt of e-invoices. The invoicing study stated: ‘instead of looking for new technologies, issues with current technologies should be solved’.

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52009DC0020:EN:NOT
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0020:FIN:EN:HTML

***[2 February 2009] Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing [Ref: 5985/09 FISC 13]

Delegations will find attached the proposal from the Commission, submitted under a covering letter from Mr Jordi AYET PUIGARNAU, Director, to Mr Javier SOLANA, Secretary-General/High Representative.

See document:
http://register.consilium.europa.eu/pdf/en/09/st05/st05985.en09.pdf

***[11 March 2009] Mid-Term Report of the European Commission Expert Group on e-Invoicing, Comments of OFS Portal, LLC

On 11 March 2009 OFS Portal (www.ofs-portal.com) submitted their comments to the Expert Group on e-Invoicing.

They stated that “they support and applaud the principle of equal treatment of paper and electronic invoices” and that they “support removing the requirement for an advanced electronic signature in an electronic invoice as has been proposed in the Proposal for a Council Directive amending Directive 2006/112/EC”. They also stated that they “support the harmonization of legal requirements for electronic invoices through audit standards that focus on semantic content and process controls”.

See document:
http://circa.europa.eu/Public/irc/enterprise/e-invoicing/library?l=/mid-term_report/us_ofs-portalpdf/_EN_1.0_&a=d

***[13 March 2009] BUSINESSEUROPE/UEAPME Reply to the Consultation on the Mid-Term Report of the Expert Group on e-Invoicing

On 13 March 2009 BUSINESSEUROPE and UEAPME replied to the Consultation on the Mid-Term Report of the Expert Group on e-Invoicing. They congratulated the Expert Group for the comprehensive Mid-Term report and welcomed in particular the emphasis on equal treatment of paper and e-invoices. They indicated they fully endorsed the focus on the existing internal business control processes as prime means of providing assurance, and the neutrality of technology and auditability.

Finally they stated “additional measures and legal obligations for companies on the auditability of e-invoices are not needed and would be counter-productive to the simplification target”.

See document:
http://www.ueapme.com/IMG/pdf/090313_Einvoicing_reply_Expert_Group_Mid_Term_Report.pdf

***[13 March 2009] Opinion on the Mid-Term Report of the EU Expert Group on e-Invoicing from the Swedish Bankers Association

On 13 March 2009 the member banks of the Swedish Bankers Association (Svenska Bankföreningen) expressed their opinion on the Mid-Term Report of the EU Expert Group on e-Invoicing. They emphasized on the need for 1) clear EU and national guidelines regarding legal aspects of conversion and archiving of e-invoices and 2) a centralized register that contains information about the electronic identification of buyers and sellers.

They advised the Expert Group to evaluate an approach which consider an invoice to be legal compliant as long as it contains the mandatory elements demanded by accounting and bookkeeping legislation. They stated that with this approach invoice data getting lost due to e-invoice conversion between different formats would be irrelevant.

See document:
http://www.bankforeningen.se/web/bfmm.nsf/lupgraphics/EC090313.pdf/$file/EC090313.pdf

***[13 March 2009] EBF Position to the Mid-Term Report of the European Commission Expert Group on e-Invoicing

On 13 March 2009 the European Banking Federation expressed in their position paper that they viewed the progress made by the Expert Group and its efforts to help the market move decisively into e-Invoicing in a positive light.

They positively noted that the Expert Group on e-Invoicing is promoting the principles of placing paper and electronic invoices on a complete equal footing. They also shared the view that the vision of a harmonised, simplified and clear legal framework for e-Invoicing can only help to reduce the existing barriers and give more clarity and simplification in this area. In this respect they stated that the Expert Group should pursue decisively the goal to amend the VAT Directive.

See document:
http://circa.europa.eu/Public/irc/enterprise/e-invoicing/library?l=/mid-term_report/eu_ebfpdf/_EN_1.0_&a=d

***[10 June 2009] Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing COM(2009) 21 final — 2009/0009 (CNS)[Ref: AVIS-SECTION CESE 0475/2009 FIN and 2009/C 306/17 and ID: 52009AE1039]

On 27 February 2009 the Council decided to consult the European Economic and Social Committee, under Article 93 of the Treaty establishing the European Community, on the “Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing”. The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 28 May 2009. The rapporteur was Mr BURANI.

At its 454th plenary session, held on 10- 11 June 2009 (meeting of 10 June), the European Economic and Social Committee adopted the opinion expressed in the document by 114 votes, nem. con. with one abstention.

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52009AE1039:EN:NOT
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:306:0076:01:EN:HTML

***[November 2009] Final Report of the Expert Group on e-Invoicing

The Expert Group on e-Invoicing issued their Final Report on November 2009. The recommendations of the Expert Group and the reactions to them will be taken into account by the European Commission in developing its further position on e-Invoicing.

See document:
http://ec.europa.eu/internal_market/consultations/docs/2009/e-invoicing/report_en.pdf

The Expert Group on e-Invoicing in their Final Report ascertain that there are two key issues:
- The present European landscape of e-invoicing legislation is disharmonised. The methods set out in Article 233 of Directive 2006/112/EC have been implemented in Member States’ national legislation in widely different ways. This leaves trading parties experiencing difficulties in finding the right degree of clarity and legal certainty to encourage adoption of e-Invoicing.

- Internal business controls did not receive appropriate attention in the current legislative framework and its implementation. This is unfortunate because such controls are essential to all invoicing processes and, for most, whose systems are mature and robustly auditable, can actually provide the necessary assurance and without creating technical and operational complexity.

Based on the principles of equal treatment between paper and electronic invoices, technology neutrality and internal business controls, the Expert Group issued their recommendations. With regard to article 233 they recommend that “No legislative or other requirements should be imposed on electronic invoices above those that exist for paper invoices today”.

They furthermore state that “The Commission’s January 2009 proposal for a new VAT Directive (COM(2009) 21 final, should be adopted by all Member States and transposed into national legislation. In particular the provisions of Articles 232–237 of the current Directive on the Common System of Value Added Tax (2006/112/EC) should be removed so as to shift from technology based requirements to requirements based on equal treatment, technology neutrality and internal business process controls”.

Additionally they state “In the short term, pending the adoption of the new VAT Directive, those Member States who have not yet done so, should be encouraged to implement the option of ‘other means’ as provided for in the current VAT directive (Directive 2006/112/EC) so as to enable the practical implementation of the Expert Group’s Code of Practice”.

***[11 December 2009] Draft Report on the proposal for a Council directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing from David Casa (COM(2009)0021 – C6-0078/2009 – 2009/0009(CNS))

See document:
Draft Report from David Casa

- 2010

***[28 January 2010] Amendments on the proposal for a Council directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing from David Casa (COM(2009)0021 – C6-0078/2009 – 2009/0009(CNS))

See document:
Amendments from David Casa

***[25 February 2010] EBF input to the European Commission Consultation on the Final Report of the Expert Group on e-Invoicing

On 25 February 2010 the European Banking Federation (EBF) provided their input on the final report of the European Commission expert group on e-Invoicing.

The EBF noticed positively that the recommendations of the representatives of European financial sector were taken into consideration in the final report and can only welcome its outcome.

They state in their comments “the EBF considers that e-Invoicing could potentially be the essential part of an efficient financial supply chain and that this initiative together with the ongoing creation of the Single Euro Payment Area (SEPA) offers a good foundation for that”.

Moreover they indicate that bankers played a key role in the work of the expert group on e-Invoicing and that the findings of the final report are sensitive to the potential role of banks and the opportunity represented by e-Invoicing as a new service proposition linked to payments and supply chain finance.

They finally conclude that they fully support the e-Invoicing initiative as it is contributing to reduce the use of natural resources and hence the carbon print of invoices.

See document:
http://www.ebf-fbe.eu/uploads/D0254D-2010-EBF%20answer%20to%20EC%20consultation%20on%20e-invoicing.pdf

***[12 March 2010] Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing - General approach / Note from Presidency [Ref: 7132/2/10 REV 2 LIMITE FISC 23 and 5985/09 FISC 13 - COM(2009) 21 final]

See document:
http://register.consilium.europa.eu/pdf/en/10/st07/st07132-re02.en10.pdf

***[16 March 2010] Council agrees on simplified rules for VAT invoicing [Ref: 7514/10 (Presse 65)]

The Council today1 agreed on a general approach, pending the opinion of the European Parliament, on a draft directive aimed at simplifying VAT invoicing requirements, in particular as regards electronic invoicing (7132/2/10).

See document:
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/113393.pdf

***(16 March 2010] Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing - General approach / Outcome of proceedings from the ECOFIN [Ref: 7614/10 FISC 26 and 5985/09 FISC 13 - COM(2009) 21 final]

At its meeting on 16 March 2010, the Council (ECOFIN) agreed a general approach, pending the opinion of the European Parliament, on a draft Directive as regards the rules on invoicing.

See document:
http://register.consilium.europa.eu/pdf/en/10/st07/st07614.en10.pdf

***[13 July 2010] Council Directive 2010/45/EU of 13 July 2010 amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing [Ref: OJ L 189, 22.7.2010, p. 1–8 - CNS 2009/0009 and ID: 32010L0045]

See documents:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32010L0045:EN:NOT
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:189:0001:01:EN:HTML

Other reports and studies written about e-Invoicing which briefly touch the fiscal and legal regulations related to e-Invoicing

***[January 2006] Adoption of Electronic Invoicing in SMEs, author Jessica Sundström.

See thesis:
http://epubl.ltu.se/1402-1617/2006/082/LTU-EX-06082-SE.pdf

***[25 January 2006] Electronic Invoicing in Finland - attitudes towards electronic invoicing by financial managers in small- to mid-sized companies, author Anna Rofhök-Björni.

See thesis:
http://www.pafis.shh.fi/graduates/annrof03.pdf

***[15 June 2006] ELDOC Legal study on legal and administrative practices regarding the validity and mutual recognition of Electronic Documents, prepared by Mrs. Fanny Coudert for the European Commission DG Enterprise and Industry.

See study:
http://www.telecom.gouv.fr/fonds_documentaire/tic/eldocfrance.pdf

***[3 June 2008] Electronic Invoicing Initiatives in Finland and in the European Union – Taking the Steps towards the Real-Time Economy, edited by Esko Penttinen.

See White Paper:
http://hsepubl.lib.hse.fi/pdf/hseother/b95.pdf

***[8-11 June 2008] The Adoption of Electronic Invoicing in Finnish Private and Public Organizations, authors Esko Penttinen, Maria Hyytiäinen.

See document:
http://www.hse.fi/NR/rdonlyres/D3991302-ADA4-4817-8EF3-0FF4648A5622/0/PenttinenHyyti%C3%A4inen2008.pdf

***[December 2008] How do electronic invoicing operators create value? Empirical evidence from Finnish and Italian operators, authors Esko Penttinen, Alessandro Salgaro, Timur Haussila.

See document:
http://www.hse.fi/NR/rdonlyres/60E5DBC8-2750-472E-8EB0-F30503075372/0/PenttinenSalgaroHaussila2008.pdf

***[January 2009] Impacts of the Implementation of Electronic Invoicing on Buyer-Seller Relationships, authors Esko Penttinen, Petri Hallikainen, Tuija Salomäki.

See document:
http://www.hse.fi/NR/rdonlyres/17ECE0CE-7E10-46D5-A3C1-E05E11DCFB6D/0/PenttinenHallikainenSalom%C3%A4ki2009.pdf

***[9 March 2009] Analysis of Business Requirements for e-Invoicing in a Public Procurement Context, Final Study, authors Pieter Breyne, Philip Van Langenhove, Joao Frade, Maarten Daniëls.

See document:
http://ec.europa.eu/idabc/servlets/Doc?id=32108

***[21 December 2009] The impact of Electronic Data Interchange and e-Invoicing on Buyer-Seller relationships in Business-to-Business markets, author Julia Maunola.

See thesis:
http://hsepubl.lib.hse.fi/FI/ethesis/pdf/12202/hse_ethesis_12202.pdf



Please stay in touch, I am working on getting this overview up to date.

Tags: e-Invoicing, e-Business

Last update: 11-03-2017

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