New Directive 2010/45/EU sets out measures that ensure tax authorities accept electronic invoices under the same conditions as for paper invoices, and to remove legal obstacles to the transmission and storage of e-invoices. In addition the Directive also comprises measures to help tax authorities ensure that tax is paid so as to better tackle VAT fraud.
Directive 2006/112/EU covers the common VAT system within the EU and remains the main legislative instrument, the new Directive is merely sets out to insert amendments to this legislation. The European Commission identified the use of electronic invoicing as beneficial to the proper functioning of the internal market but at the same time is also susceptible to abuse by fraudsters. The new Directive aims to address these issues.
Who Does It Affect?
The Directive is aimed at the individual countries and their tax authorities to implement but it will have an effect on all those who do business across borders within the EU.
Equality for Electronic Invoicing Across Europe
The new Directive sets out measures that ensure tax authorities accept e-invoices under the same conditions as for paper invoices, and to remove legal obstacles to the transmission and storage of e-invoices. In addition the Directive also comprises measures to help tax authorities ensure that tax is paid so as to better tackle VAT fraud.
The main points are:
1. Chargeability of VAT on Goods
Clarification of the rules concerning the chargeability of VAT on the supply and acquisition of goods within the EU in order to ensure the uniformity of the information submitted in recapitulative statements and the timeliness of the exchange of information by means of those statements;
2. Cash Accounting Scheme
Giving countries the option of allowing VAT to be accounted using a cash accounting scheme which allows the supplier to pay VAT to the competent authority when he receives payment for a supply and which establishes his right of deduction when he pays for a supply.
3. Improving Legal Certainty for Businesses
Providing legal certainty for businesses regarding their invoicing obligations, it should be clearly stated which Member States invoicing rules apply;
4. Time Limit on Cross Border Invoices
Imposing a harmonised time limit for the issue of an invoice with respect to certain cross- border supplies with a view to improving the functioning of the internal market;
5. Simplified Invoices
Allowing taxable persons to issue a simplified invoice in any of the following cases:
(a) where the amount of the invoice is not higher than EUR 100 or the equivalent in national currency;
(b) where the invoice issued is a document or message treated as an invoice;
6. Access to Invoices
Where a taxable person stores online invoices which he has issued or received, both the country in which tax is due and the host country should have the right to access those invoices for control purposes.
Reviewing The Directive
By 31 December 2016 at the latest, the Commission shall present to the European Parliament and the Council an overall assessment report, based on an independent economic study, on the impact of the invoicing rules applicable from 1 January 2013 and notably on the extent to which they have effectively led to a decrease in administrative burdens for businesses, accompanied where necessary by an appropriate proposal to amend the relevant rules.
Implementation
The Directive came into force on 11 August 2010 and each country will have until 31 December 2012 to implement the provisions. The rules will be in force as of 1 January 2013.
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