2. Contents
1. What is a (VAT) Directive?
2. VAT and invoicing: why do they go together?
3. VAT Directives 2001/115 and 2010/45
4. Status Member State implementation
3. What is a Directive?
What is the VAT Directive?
4. A directive is a legislative act of the European
Union, which requires member states to achieve
a particular result but without having dictated
the means of achieving that result.
VAT Directive since 1977, current version is
2006/112/EC, modified by 2010/45/EU.
8. Long-term auditability challenges: biz economics are in the audit 8
Physically archived: ESLU
Technically received:ZA
Legally received: RO
Technically issued: US
Legally issued:
10. 2001 Directive (transposed 2004) introduced
EU-wide e-invoicing concept:
– Buyer consent
– Integrity and authenticity
– Archiving in EU
• 2010 Directive (deadline 2013) refines
framework:
– Buyer consent
– Integrity and authenticity
– Archiving in EU
11. Buyer consent Art 232
• Drafting does not preclude tacit consent
• « An electronic invoice » - singular
12. I&A: is 2013 a compelling event…?
…even if no-one moved the bar…?
13. Integrity and authenticity, Art 233
• No options for Member States
• Strict integrity and authenticity evidence
requirements.
– Lifecycle requirement for both trading partners
– Freedom of choice main rule
– Paper and electronic treated equally under catch-
all « method »
• Reliable audit trail between invoice and supply
– For e-invoices e.g.
• Secure EDI based on 1994 model agreement
• Qualified Electronic Signatures
14. Equal treatment vs BCAT only
Booking record Booking record
Accounting Accounting
system Supplier Buyer system
Evidence Evidence
Archive: Archive:
original original
invoice invoice
15. BCAT only evidence is a novelty
Evidence Evidence
Booking record Booking record
Accounting Accounting
system Supplier Buyer system
VAT-focused tax audits without an « original invoice »
as (partial) evidence are not common today
16. The bar is unchanged and pretty high
Most ordinary
2001 mortals need to
learn a technique
to jump it…
Fosbury Scissors
It’s the result that
counts, of course
2010 (sorry, did we
forget to say
that…?)
Western roll Straddle
…but there are infinite ways to jump it…
17. You are free to use Said the
politician
any method*
* next time you vote
remember I freed you from
the tyranny of form.
Scissors Straddle
Said the referee
Western roll Fosbury
…but you still have only three
attempts or you’re out
18. Misunderstandings..
• Proving supply not a VAT requirement
• Proving supply not sufficient
• Internal controls not a VAT requirement
• Having internal controls not sufficient
• The only requirement is integrity and authenticity
evidence
(…even if tax consulting firms like to claim otherwise…)
• « You can now send unsigned PDF » is the wrong
question, for which any short answer will be misleading
– Freedom means responsibility – enterprises have to learn
19. Summary
Any evidence that Business controls Qualified electronic EDI based on an
does the job establishing a signatures agreement
reliable audit trail consistent with EC
between an invoice Recommendation
and a supply 94/820/EC.
Electronic invoices Yes (good luck) Yes (completely new, Yes (reversal of Yes
no existing guidance evidence burden i.e.
grounded in the tax auditor has
practical audit to prove the
experience) integrity and
authenticity of the
No guidance can be invoice are
provided: all unreliable)
controls can be a
Paper invoices Yes (major example: No No
« contribution » to
archiving your paper
evidence
invoice, which
suffices)
20. Archiving Art 246
• Member State may restrict or prohibit storage
in country without relevant mutual assistance
treaty
• Online access if stored abroad
• If invoice electronic, Member State can
require that I&A evidence must be electronic
• Form conversion allowed as a default rule,
option for Member States to require same
form
22. Transposition status
United Kingdom
Czech Republic
Luxembourg
Netherlands
Lithuania
Germany
Denmark
Romania
Slovenia
Portugal
Slovakia
Belgium
Hungary
Bulgaria
Sweden
Finland
Estonia
Greece
Austria
Ireland
Poland
Cyprus
France
Malta
Latvia
Spain
Italy
Transposition Status x x x x
I&A BCAT specifically
x x x x x x x x
mentioned
I&A EDI x x x x x x x x
I&A QES x x x x x x x x
I&A AES specifically
mentioned
If e-invoice I&A must
be electronic
Exotic
options/requirements
23. Summary & Questions
I&A must still be guaranteed
More freedom brings more responsibility
Good business control audit trails are a possibility
but must prove I&A – which is new
If you are multinational, with diverse activities,
technology is your best bet.
Higher legal certainty, quicker, cheaper, everywhere,
guaranteed
Questions???
Editor's Notes
Base message:Whatdoesitmean to be TrustWeaver-enabled?By relying on TrustWeaver’s unique legal, IT security and business process expertise deployedthrough a zero-hassle Cloud service, TrustWeaver-enabledenterprisesget the highestlevels of legalcertaintythroughguaranteedcompliance, evidence and control.These services are used by many of the world’slargest and mostsuccessfulcompanies, many of which are todayusing the TrustWeaver-enabled logo to distinguishtheir services fromvendorswhocannotprovidesimilarlevels of assurance.
EINV SPECIFICThis slideplays down the evolution of EU legislation – in 2001 legislatorsfocused on the methodsthatcanbeclearlydefined and that are needed for manycompaniesgiventheirevidencedeficitfrom normal processes. In 2010 a fixwas made to more clearly state that the techniques aren’t a goal in themselves – soitisnowclearlyspelt out thatitis the resultthatcounts, and you are OK as long as youachievethatresult.
