1. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
The VAT legislative framework for electronic invoices
Madrid 27&28 April 2010
Rolf Diemer
Head of Unit “VAT and other turnover taxes”,
DG TAXUD, European Commission
28 April 2010 Rolf Diemer 1

2. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
• DG TAXUD is responsible for tax and customs issues
within the European Commission
• VAT unit within DG TAXUD is responsible for all aspects
of VAT at EU level:
– Legislation - VAT Directive 2006/112/EC;
– But Member States are responsible for the application and
implementation of VAT rules at a national level
• VAT Directive contains the VAT rules regarding e-
invoices – Articles 232 to 237
28 April 2010 Rolf Diemer 2

3. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
Background to VAT legal changes
• On 28 January 2009 Commission proposed (COM(2009) 21) to amend
the rules on e-invoicing contained in the VAT Directive (inter alia still
requiring electronic signature, EDI or ‘other’ method)
• The proposal followed a study, public consultation and discussions
with Member States.
• The Commission proposal was discussed during the Czech, Swedish
and Spanish Presidency and agreed upon in political terms at March
ECOFIN.
• The European Parliament gave its opinion 21 April 2010.
• Formal adoption is now likely in the June ECOFIN with implementation
on 1 January 2013
28 April 2010 Rolf Diemer 3

4. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
Commission’s aim achieved in agreed ECOFIN text
• Equal treatment between paper and e-invoices by removing
specific VAT conditions for e-invoicing
• Technology neutral approach - Member States can not
prescribe the use of any particular technology
• This approach has support of,
– Expert Group on e-Invoicing
– High Level Group of independent stakeholders on reducing
administrative burdens chaired by Edmund Stoiber
– Businesses from the Commission public consultation
28 April 2010 Rolf Diemer 4

5. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
Details of agreed ECOFIN text
• E-invoice requires the acceptance of the customer (no
change)
• Authenticity of origin, integrity of content and legibility must
be guaranteed from issue until the end of storage (same for
paper – previous Article 246)
• Authenticity requirements can be achieved by
– business controls that provide audit trail between supply and
invoice (in same way as businesses do for paper invoices)
– EDI or advanced e-signatures based on qualified certificate (only
examples – not mandatory)
• Review clause – Commission required by 31 December 2016
to report on new rules and do further proposal if needed.
28 April 2010 Rolf Diemer 5

6. European Commission /
Taxation and Customs Union
Electronic Invoicing in Europe
Further work to be considered to help clarify the rule changes
• Control of proper transposition by Member States
• Fiscalis meeting with Member States – could be organised in
early 2011
• VAT Committee – try to get unanimous agreement by
Member States on interpretation
• Implementing Regulation – provide legal clarity
• Commission Recommendation
28 April 2010 Rolf Diemer 6

7. European Commission /
Taxation and Customs Union
First analysis - consultation feedback
Legal and regulatory aspects
• Respondents reconfirmed that VAT is the main legal barrier for the uptake on
electronic invoicing. However, views on the on the direction of necessary changes
vary.
• With regard to the recommendations of the Expert Group on solving these regulatory
aspects, responses can be divided in three categories:
– A first group fully supports the proposal for a code of practice and the concept of equal
treatment between paper and electronic invoices from a VAT perspective.
– A second group consider the code of practice should be further elaborated offering more
guidance to enterprises and tax authorities.
– A third group oppose the EG proposals and consider that a limited set of technological tools
such as e-Signatures and EDI are the best way forward to increase standardisation
• Beyond VAT, other factors such as archiving, accounting, e-Signatures (trusted lists
or mutual recognition), customs laws were referred to as areas for harmonisation
28 April 2010 Rolf Diemer 7