European Committee for Standardization

Comité Européen de Normalisation

Europäisches Komitee für Normung

CEN/ISSS eInvoicing Phase 2 Workshop eINV043

Title : Presentation from Mr. Gary Wilkinson (EC) at the 9th meeting of CEN/ISSS Workshop
eInvoicing Phase 2, on 12 February 2009

Source : CEN/ISSS

Date : 2009-02-19

Status : For information

Note :

Secretariat: Nederlands Normalisatie-instituut (NEN)

Mr. G. Dirkse Telephone: +31 15 2 690 201

Vlinderweg 6 Telefax: +31 15 2 690 242
P.O. box 5059 E-mail: gert.dirkse@nen.nl
2600 GB Delft
The Netherlands
 European Commission
Taxation and Customs Union

VAT Invoicing proposal

CEN/ISSS e-Invoicing phase 2 Workshop

12/02/09 Gary Wilkinson 1

 European Commission /
Taxation and Customs Union

Background to VAT invoicing proposal

• Legal requirement - Article 237 of VAT Directive

“The Commission shall present, …, a report and , if appropriate, a
proposal amending the conditions applicable to electronic invoicing…”

• Invoicing Directive (2001/115/EC) not fully achieve aim

of simplifying, modernising and harmonising invoicing
rules
– Many options available to Member States
– Uptake of e-invoicing still slow

12/02/09 Gary Wilkinson 2

 European Commission /
Taxation and Customs Union

Aims of VAT Invoicing proposal

• Reduce burdens on business

– Help achieve target of 25% reduction of admin burdens by
2012
• Promote SMEs
– Part of Small Business Act
• Increase uptake of e-invoicing
– Help businesses become more competitive
• Help Member States tackle fraud
– Measure included in anti tax fraud strategy

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 European Commission /
Taxation and Customs Union

Areas covered by VAT Invoicing proposal

• Issuance of an invoice
• Contents of an invoice
• Electronic invoicing
• Storage of invoices
• Other invoice related matters
– Chargeability to tax for intra-Community supplies
– Right of deduction
– Cash accounting (payment not invoice creates tax point)

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 European Commission /
Taxation and Customs Union

Background work

Invoicing study
• Available on Commission website
• Includes a mapping tool

Public consultation
• Results available on Commission website
• 64 replies from 10 Member States
• Support recommendations contained in the invoicing study

Technical meeting with Member States

• Held in September 2008

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 European Commission /
Taxation and Customs Union

Principles of the VAT Invoicing proposal

• Remove, as far as possible, Member States options

– Exempt supplies, outsourcing to 3rd parties outside the EU
• Harmonise the invoicing rules
– Storage periods, time limit of issuing invoices
• Clarify which rules are applicable
– Member State of supplier or Member State of taxation
• Simplify the obligations
– Self-billed invoices, VAT amount in national currency

12/02/09 Gary Wilkinson 6

 European Commission /
Taxation and Customs Union

Changes to the issuance of an invoice

Requirement to issue an invoice

• Full VAT invoice
– Exempt supplies (deduction at preceding stage)
– B2B for taxable supplies

• Simplified VAT invoice

– Credit notes
– Small value less than €200
– B2C invoices (option for Member States)

• Distance sellers – required only if applicable to established

businesses
• Payment on account for I-C supplies – not required

12/02/09 Gary Wilkinson 7

 European Commission /
Taxation and Customs Union

Changes to the issuance of an invoice

When an invoice needs to be issued

– 15th day of the month following the supply
Summary invoices
– all supplies within the same calendar month
Self-billed invoices
– mention “self-billed” on invoice
– mention customers VAT number
Outsourcing
– 3rd party outside the EU

12/02/09 Gary Wilkinson 8

 European Commission /
Taxation and Customs Union

Changes to the content of an invoice

Full VAT invoice

Current Article 226 with some changes

• Customer’s VAT number compulsory
• Date tax becomes chargeable (replace date of supply)
• Codes for exempt (EX) and reverse charge (RC) supplies

Simplified VAT invoice

Current Article 238(2)

• Date of issue
• Identification of supplier
• Nature of goods or services supplied and value
• VAT amount

Currency of VAT amount

ECB rate when tax becomes chargeable

12/02/09 Gary Wilkinson 9

 European Commission /
Taxation and Customs Union

Electronic invoices

Equality of treatment between paper and e-invoices

• Removal of Article 233 (EDI, e-signatures)
• Non-discrimination article 218a
• Acceptance by the customer removed

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 European Commission /
Taxation and Customs Union

Changes to the storage of invoices

Storage period
• Harmonised at 6 years

Place of storage
• No restrictions, no notification
• Must be available without undue delay

Electronic storage
• Paper invoices can be stored in electronic form

Translation of invoices
• Member States must specify which particular invoices

12/02/09 Gary Wilkinson 11

 European Commission /
Taxation and Customs Union

Member State where rules are

applicable
Issuance of an invoice
• Member State where the supplier is identified for VAT and
from where supply is made
• Member State of customer if cross border reverse charge

Storage of invoices
• Issuer of invoice – Member State where the supplier is
identified for VAT
• Recipient of invoice – Member State where the customer is
identified for VAT

12/02/09 Gary Wilkinson 12

 European Commission /
Taxation and Customs Union

Other changes in the VAT Invoicing

proposal
Chargeability for I-C supplies
• When the supply takes place (no longer 15th day of following month)
• Invoice no longer creates a chargeability to tax
• Same rule for EC acquisitions

Right of deduction
• Must hold a valid invoice for right of deduction, even for reverse
charge

Cash accounting
• Derogation given to UK, Sweden and Slovenia extended to all Member
States
• Optional scheme for supplier with turnover less than €2million
• Account for all supplies and purchases on cash basis
• Recipient can have immediate right of deduction

12/02/09 Gary Wilkinson 13

 European Commission /
Taxation and Customs Union

Next steps

Discussion in Council
• Likely to begin in March 2009
• Need unanimity

European Parliament and Economic and Social Committee

• Must give their opinion

Date for implementation 1 January 2013

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