15 Jul 2019

Study on the evaluation of invoicing rules of Directive 2006/112/EC

The Study on the evaluation of invoicing rules of Directive 2006/112/EC on the common system of value added tax was carried out by CASE, among others, for the Commission and is intended to contribute to the evaluation of invoicing rules.

The Study has four main objectives:

1) measuring the decrease in the administrative burdens for businesses;

2) assessing the degree to which the new rules on electronic invoicing (eInvoicing) have contributed to the uptake of this technology;

3) assessing the role played by the new invoicing rules to support EU Member States’ efforts to tackle VAT fraud and improve tax compliance;

4) formulate evidence-based possible ways forward.

Regarding the eInvoicing the findings of the Study are of significant relevance following the creation of the European standard on eInvoicingDirective 2014/55/EU on electronic invoicing in public procurement mandated the creation of the standard, which makes it possible for sellers to send invoices to many customers by using a single eInvoicing format and thus not having to adjust their sending and/or receiving parameters to connect with individual trading parties.

The Study concluded that increased adoption of eInvoicing is the main driver for the reduction in administrative burdens for companies estimated at € 920 million in the period 2015-2017. These savings represent the bulk of the regulatory cost savings generated by the Directive, which, overall, amount to € 1.1 billion over the same period.

The VAT Directive introduced three main changes to the European legal framework for eInvoices: the definition of an eInvoice, the principle of equal treatment and the principle of technological neutrality. As a result, both the fragmentation and complexity of eInvoicing rules across the EU were largely addressed by the Directive.

According to the study, the Directive had a measurable impact on increasing the rate of adoption of unstructured eInvoices, because of the simplifications which encouraged companies to switch from paper invoices to PDFs. Other significant factors behind eInvoicing uptake were the behaviour of customers and suppliers, that can either push for or start accepting eInvoices, and - for structured eInvoices - the imposition of an obligation to use eInvoicing in B2G transactions, via Directive 2014/55/EU.

The Study notes that the eInvoice definition adopted by the VAT Directive and the Directive on the use of eInvoicing in public procurement is different, as the latter only refers to automatically-processable eInvoices. While it does not create practical problems, some stakeholders pointed out that the definition adopted by Directive 2014/55 is more up-to-date and better supports the full realising of eInvoicing benefits.


Read the Study