In many EU countries, e-invoicing – the electronic issuing, sending and receiving of invoices – is not only mandatory between companies and public authorities (business-to-government, B2G), but is also becoming increasingly common in business relationships between companies (business-to-business, B2B) and end customers (business-to-customer, B2C). In December 2022, the EU Commission took this development into account and presented a new draft directive under the name “VAT in the Digital Age (ViDA)”.
THE EU COMMISSION’S NEW ViDA INITIATIVE.
In addition to the current e-invoicing directive 2014/55/EU, the European Commission presents the following starting points for modernizing the VAT system in the EU in its new ViDA initiative:
- Establishment of a new, more standardised e-invoicing system for the submission of digital invoices and information on VAT
- Further harmonisation of the different VAT systems within the EU and support for the expansion of e-invoicing at national level
- Change in VAT regulations for digital platforms in the area of passenger transportation and short-term rentals. In the future, the platform operators – and not the actual service providers – will be ultimately responsible for the correct collection and payment of the platform-generated VAT
- Simplification for small and medium-sized businesses with regard to knowledge and handling of applicable EU VAT regulations
- Introduction of a One-Stop-Shop (OSS) to avoid multiple registrations and enforce a single point of registration for all companies operating across EU borders.
The core elements for electronic invoices already mentioned in the current directive remain in place. These include: invoice identification, invoice period, designation of seller, buyer, payee and seller’s tax agent, order reference, delivery details, method of payment execution, details of surcharges or discounts, breakdown of the individual line items of the invoice, total amount of the invoice and the separate display of VAT.
The e-invoicing standard EN16931 of the European Committee for Standardisation (CEN) and the possibility for EU member states to approve their own specifications – the Core Invoice Usage Specification (CIUS) – also remain in force:
· ZUGFeRD and XRechnung in Germany
· Factur-X in France
· XML format of the NAV customs and tax authority in Hungary
· FatturaPA in Italy
· Facturae in Spain
It is also set that from 1 January 2024 digital invoices must be available for all stages of e-invoicing in a structured format.
BENEFITS FOR COMMUNITIES AND COMPANIES.
As already mentioned, both the EU Commission and the member states are pursuing the purpose of e-invoicing to standardise the creation, transmission, receipt and evaluation of VAT information and to prevent fictitious supply chains and tax fraud. However, this digital invoicing process should not just be seen as an onerous obligation, but also brings numerous benefits for the companies concerned:
Significant savings potential
Digital invoice management reduces expenses compared to paper-based processes: costs for materials, printing, postage and processing are eliminated. Thanks to reliably scheduled payment deadlines, savings can be generated – via cash discount arrangements. The time and effort required is also reduced because electronically generated invoices do not contain any input errors and therefore have to undergo fewer correction steps, process times are generally shortened, and fewer personnel resources are tied up.
Higher data quality
The automatic processing of invoice data increases their quality and therefore the trustworthiness of companies in relation to tax authorities and business partners. Invoices and liabilities can be calculated reliably and financial analyses become more meaningful. If companies use the EU-wide network for electronic procurement (Pan-European Public Procurement Online) PEPPOL as part of their e-invoicing, the delivery of the invoice is documented with an acknowledgement of receipt, in contrast to the e-mail exchange.
Improved cash flow
With the help of e-invoicing, companies can track invoices in real time. This continuous monitoring leads to better management of financial flows and ultimately to more liquidity in the company. The investment in e-invoicing software usually pays for itself in less than a year thanks to optimised processes, lower staff costs and reduced error rates. Lobster also offers e-invoicing solutions as part of its Lobster_data integration software. For example, Lobster_pro can be used for your individual invoicing process (creation, processing and evaluation of invoices) and therefore not only fulfils the interface template, but also creates – as a basis for successful monitoring – internal transparency. The PEPPOL standard is also supported, as well as – via a profile package to its API – the cooperation with the Lobster partner Storecove, which is certified as a PEPPOL Access Point.