Skip to Content

Equal treatment of electronic invoices – change proposal to the EU VAT Directive

True – the European Commission published a proposal on 28 January 2009 to change the current VAT Directive (2006/112/EC) with the goal “to increase the use of electronic invoicing, reduce burdens on business, support small and medium sized enterprises (SMEs) and help Member States to tackle fraud.”, see EU Commission press release (IP/09/132). It is good that it should be achieved by creating equal treatment between paper and electronic invoices (also referred to as “technology-neutral”) and to simplify the process of e-Invoices by removing specific conditions and by harmonizing the processes across member states. These are positive signs. Unfortunately, a misunderstanding exist that the change is already approved and implemented. The truth is a the change is just a proposal that still needs to be discussed among all 27 Member States and approved, after that, Member States will have a period of at least two years to adopt their national laws (to “transpose” the Directive). The target transposition date is 1 January 2013 – see Article 2, Transposition

This confusion is intensified by a large number of documents related to the topic that are referenced in a misleading context. I think the best summary of links can be found here. My advices is to read the actual proposed Directive text rather than press release by certain commentators.

In regards to the proposed removal of “pre-conditions for sending electronic invoices by either advanced electronic signature or by electronic date interchange (EDI)” it is questionable that all Member States will approve it as they have invested over the past years into e-Signature based solutions. And this change proposal does NOT mean that integrity and authenticity disappear as requirements neither from the VAT Directive, Article 246 “The authenticity of the origin and the integrity of the content of the invoices stored, as well as their legibility, must be guaranteed throughout the storage period.” nor from other accounting rule on a country level. In any case both methods will still be available to guaranty the validity of invoices. Guarantying integrity becomes more and more difficult in the paper world due to excellent photo copy machines . For the e-World e-Signatures are seen as a very cost effective way to address the guaranty of integrity at transport times and for long term evidence.

Another interesting proposal is: “As with paper invoices, the validity of an e-invoice should be checked against the accounting records of the business, such as the purchase order, payment and delivery note.”, see COM(2009) 20. This does make sense, but more implementation guidance will be needed to show how it can be achieved for the various invoice types (e.g. non-Purchase Order Invoices) and how to log the evidence that it was actually performed.
A study on the VAT invoicing rules developed by PriceWaterhouseCoopers as part of the study carried out for the European Commission was also published.

Conclusion: How should businesses react to this situation when they plan to use e-Invoices? If using an outsourcing approach based on a B2B Network the investment can be kept to a minimum and is predictable. Most B2B Networks are already experts in this area and have implemented solutions that address the current requirements and can be adjusted if needed without any effort on the part of the customer. This approach ensures:


  • ongoing compliance with current requirements
  • cost effectiveness without high setup costs through a hosted (3rd party) approach
  • ready to use e-Invoice via classic EDI or e-Signature service
  • go-live with e-Invoices tomorrow (all trading partners are covered)
  • Most importantly – that in case of potential changes and once implementation guidance exists adjustments to the transport or archive are covered

Hopefully this article has removed some of the uncertainty that is currently paralyzing decisions in the field of e-Invoices.

Be the first to leave a comment
You must be Logged on to comment or reply to a post.