The aim of the study was to map the existing legislation in all Member States, analysing burdens on business and Member States' control needs. Additionally, PwC was asked to provide recommendations for a more harmonised legislation.

EU Commission proposal

The EU Commission made a proposal on the 28th of January 2009 for a Council Directive to amend the (electronic) invoice requirements. The recommendations made in the PwC study are reflected in this proposal.

Consequences

An increasing use of electronic invoicing is generally seen as beneficial from several perspectives. Environmental friendliness, Corporate Social Responsibility and cost savings are the keywords. If the proposal of the Commission is adopted, the following adjustments will be of high importance for e-invoicing:

- The existing VAT legislation for electronic invoicing will be simplified.
- The purpose is to create uniform EU legislation leading to approximation of the national legislation of Member States in order to abolish (individual) restricting and/or additional requirements. The guarantees (for authenticity of origin and integrity of content) for an electronic invoice (e.g. by means of EDI or electronic signature) will be abolished.

The storage period of invoices will be harmonised at six years. The current Dutch fiscal legislation provides for different periods. The Commission has not made additional provisions for electronic archiving.

In addition to the simplifications, the proposal provides restricting provisions for VAT-fraud. Since VAT-fraud is high on the EU agenda, the expectation is that there will be a vote on this proposal on the short term.

Possible implications for your company

If your company is considering implementing electronic invoicing, the proposal and its implications are of particular relevance. It is important that your internal (IT) systems are aligned with the proposal. Of course your company can use the services of external providers of e-invoicing. Since these providers have broad experience they can help you with the automation of the complete invoicing process. You should monitor the length and the content of these service contracts, since the situation regarding e-invoicing is changing rapidly. Furthermore, it is important to keep your clients and your suppliers up to date on your intentions, to facilitate as smooth a transition as possible.

If you would like to know more, please contact: Michel Schrauwen +31 (0) 20 568 4261, Marlon van Amersfoort +31 (0) 20 568 6951, Tom van der Veldt +31 (0) 20 568 4764.

If you would like to order a hardcopy of the PwC study, please send an e-mail to Tom van der Veldt.