Out-Law News 2 min. read
11 Aug 2009, 3:47 pm
The Commission has proposed that any electronic document could act as a VAT invoice as long as it fulfils basic formal requirements, such as the inclusion of the business's name and address.
"This technologically-neutral solution implies that a fax, PDF, or EDI message could serve as an electronic invoice and evidence of a sales transaction as long as the sending and receiving companies can demonstrate on audit that the invoice is real and unchanged," said an ICC statement.
"The early adoption of electronic invoicing by all countries with VAT…systems would simultaneously streamline tax administration, reduce the costs of tax compliance for businesses and have a positive impact on the environment,” said Robert Couzin, chair of the ICC's Taxation Commission.
The ICC said that it welcomed the Commission's proposal that paper and electronic VAT invoices be treated in the same way.
"The proposal is to replace the current limited number of implementation options with technology-neutral requirements, allowing businesses to choose how they prefer to make their electronic invoicing processes robust and trustworthy," said the ICC statement.
The ICC said that existing rules about e-invoicing and VAT have hampered the growth of cross-border trade.
"Studies have shown that the restrictive and prescriptive nature of current European VAT requirements regarding electronic invoicing, in combination with a non-harmonized interpretation by EU member states, are among the principal causes of slower than expected adoption of e-invoicing by business," it said. "These factors cause legal uncertainty in some cases and high cost of implementing unnecessary controls in others."
In a discussion paper on the issue the ICC underlined the importance of technology neutrality.
"ICC has always been a strong advocate of technology-neutral law and law enforcement with respect to user choice – in other words, when information compliance requirements are objectively needed for public policy reasons, the law should not discriminate between available technologies and processes that are capable of producing equivalent results," said its paper. "ICC supports technology neutral solutions for companies based on global standards."
The ICC said in its paper that inter-governmental cooperation would be important in lowering barriers between trading nations, but that private companies also had a role to play in finding ways for companies to navigate international VAT regimes.
When a European Union Directive was introduced to modernise VAT systems it was criticised because different EU member states mandated the use of different forms, formats and technologies for invoicing and e-invoicing.
Speaking in January of this year EU Commissioner for Taxation and Customs Laszlo Kovacs said that simplifying measures would help business.
"Paper and electronic invoices will be treated equally which will allow businesses to move to a 100 percent e-invoicing system and to save up to €18 billion a year across the EU," he said.
