E-Invoicing in Europe – Standardisation Efforts at the European Level

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Helsinki, 21 June, 2005 — E-Invoicing in Europe – Standardisation Efforts at the European Level

Invoices play a pivotal role in the VAT system for European Member States. The general introduction of e-invoicing will enable tax administrators to implement new tools and procedures to carry out alternative controls that are less intrusive on trading partners. The regulatory environment directly relating to these issues is mainly built upon the European Directives 2001/115/EC and 1999/93/EC, and the European Commission Recommendation 1994/820/EC.

To implement the goals of the VAT Directive, the European Commission in 2003 requested CEN/ISSS to prepare an overview on standardisation issues relating to electronic invoicing. CEN/ISSS set up an open “eInvoicing Focus Group” and issued a report analysing the requirements on standardisation issues relating to electronic invoicing resulting from the new VAT legal framework. This group was chaired by the author and Heli Salmi from Elma Electronic Trading.

In summary, the overall conclusions of the CEN/ISSS report are that with the establishment of e-Business in large and small enterprises, there is an urgent requirement from business and tax administration to have a standardised approach to e-invoices in order to meet the needs of all business and tax administrations, which is an issue of central importance for the success of e-commerce.

Although standards on EDI and electronic signatures are available to a certain extent, too many issues on interoperability surround especially cross border electronic invoicing and VAT, and excessively diverse legislation on electronic signatures and VAT in Member States prevents business and administration from making adequate use of European harmonisation in electronic commerce.

Consequently, the eInvoicing Focus Group proposed the European Commission and the appropriate European Standards Organisations carefully note the detailed recommendations of e-IFG and that they established a proper follow-up to the recommendations. e-IFG recommends that this follow-up should take place within an “Electronic Invoices Forum Europe”, which should link and network the various national electronic invoices fora, look specifically into developing the appropriate required standards and continue to improve existing standards and bring them up-to-date.

Following agreement on this report, the European Commission issued in 2004 a standardisation mandate to CEN/ISSS with the clear target of providing background support for the standards activities required to implement the recommendations of the CEN/ISSS Focus Group. As CEN’s response to the mandate, a CEN/ISSS Workshop on “Interoperability of Electronic invoices in the European Community” was established in mid 2004.

The basic objectives of the CEN/ISSS Workshop are to take due account of the implementation of the recommendations from the report produced by the eInvoicing Focus Group, to take due account to the provisions of EU legislation and decisions and recommendations such as the Directive on Electronic signatures and the recommendation on the EDI Model Agreement, and to integrate existing standardisation.

The ultimate aim of this Work Programme – when implemented by early 2006 - is to provide traders and tax administrations with a common philosophy and a standardised environment in respect of value-added tax legislation.

Stefan Engel-Flechsig, Legal Counsel and Chairman CEN/ISSS
Workshop on Interoperability of Electronic Invoices in Europe.

Further information:

1. CEN/ISSS Final Report of the eInvoices Focus Group, adopted by the CEN/ISSS Forum on October 7th, 2003, www.cenorm.be

2. Council Directive 2001/115/EC of 20 December 2001 amending Directive 77/388/EEC with a view to simplifying, modernising and harmonising the conditions laid down for invoicing in respect of value added tax Official Journal L 015, 17/01/2002 P. 0024 - 0028

3. Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community Framework for Electronic Signatures, Official Journal L 013, 19/01/2000 P. 0012 - 0020

4. Commission Recommendation 1994/820/EC of 19 December 1994 relating to the legal aspects of electronic data interchange, Official Journal L 338, 28.12.1994, p. 98

5. Website of CEN/ISSS workshop on eInvoices: comelec.afnor.fr/cen/wsei

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