VAT News

What is the e-Invoicing Directive?

In April 2019, the EU Commission made an important announcement regarding the e-Invoicing Directive which will impact all businesses across the EU. It is important that you understand the road map ahead and how this may affect your company.

What is the e-Invoicing Directive (Directive 2014/55/EU)?

An e-invoice is simply an electronic invoice issued by a supplier in place of the old-fashioned paper approach. In 2014, EU countries and the European Commission introduced a standard for e-invoicing. Before this, e-invoice formats varied across the EU. As of April 2019, EU member states must incorporate the Directive into national laws. The idea of the Directive is to create a European standard on e-invoicing and create a consistent approach across the EU.

The concept of having to share these e-invoices with the tax authorities as a compliance obligation is becoming more prevalent. The term being used to denote this type of obligation is business-to-government or “B2G”

EU member states are fast-tracking the implementation of mandatory e-invoicing. Countries like Italy and Portugal are already proceeding with B2G obligations, they are also combining with live VAT invoice reporting initiatives, for example SII in Spain or the real-time invoicing obligations in Hungary.

At the national level, many countries have already implemented the B2G directive, including some moving to mandatory B2G e-invoices. Others are combining e-invoicing with VAT live reporting to the tax authorities, or invoice pre-approval regimes.

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