Electronic VAT invoice requirements

This was issued in 2001 for implementation in each member state by 2004. It has subsequently been included in the ‘new’ EU VAT Directive (2006/112/EC), which replaced the 6th VAT Directive.

The main requirements for all companies providing taxable supplies include:

• A list of ten information requirements for any VAT invoice. There include: Name & address of supplier; Name and address of customer; Date; VAT numbers of customer and supplier; Description and quantity of goods/services; Net, VAT and gross value of the supply; and VAT rate applied.
• Provision for simplified invoices, with limited disclosure requirements. This includes minimums below which no invoice is required. Member states are free to set the detailed rules on a national basis.
• Ability to outsource invoice processing and storage to other companies, provided that it was within the EU
• Right to recognise electronic invoices provided the authenticity can be proven through appropriate security measures. This includes the use of electronic signatures, which enables the customer to securely identify the source of the invoice.

This was issued in July 2010, for full implementation no later than 1 January 2013 in each country. Its aim is to further the use of electronic invoices. In contains detailed governance for electronic invoices including:

• Definition of an e-invoice (including formats, XML, PDF etc).
• Requirements for customer acceptance of e-invoices, which is a prerequisite of their use. Typically this can be written acceptance.
• Assurance of authenticity by both the supplier (effective record keeping) and the recipient (electronic signatures).
• Integrity of the invoice content, that it is compliant for the VAT Directive requirements and that it has not been tampered with
• Legibility.
• Business controls around the creation, recording and maintenance of e-invoices.
• Audit trail between the creation of the invoice and the supply of goods and services.
• Types on electronic signature (e.g. EDI).
• Date of issuance and period of storage of invoices.
• Decision around which member states’ VAT rules apply to the invoice.

All European Union VAT members have now implemented the Second Directive on VAT invoicing.