Are (near) real time reporting e-invoicing controls a threat to e-invoicing adoption?

October 16, 2017  |  Compliance, Electronic Invoicing, Europe

Alicja Kwiatkowski, Legal Counsel, TrustWeaver published this interesting article, called: “EU VAT invoicing controls: What the unfolding policy mix tells us about the future?” Although the article is all about thoughts on how the EU wants to close the VAT gap. She also shares here thoughts on the impact of real time reporting for e-invoicing adoption:

She starts with stating: “Put simply, it appears that under current EU policies, an EU Member State can pull off almost any changes to their VAT control environment if the purpose is to combat fraud. This possibility has been used by a growing list of countries in the past years (Portugal, Spain, Hungary, Poland, Italy, Greece etc.) to implement a mix of the following additional controls: Split payment […], Domestic reverse charge […], Real-time or near-time invoice controls.

With regard to real-time invoice controls she states:

“Here, Member States are combining the ‘anti-fraud’ arguments with claiming that these additional (e) invoicing requirements are really ‘reporting’ requirements and not within the scope of the VAT Directive’s e-invoicing rules. Each country has not just a different implementation of invoice clearance (which would put them on the same level as e.g. most Latin American countries): each system has a completely different set of ground rules which opportunistically borrow elements from both the world of VAT reporting and ‘real’ clearance systems. The diversity, legal interpretation issues, lack of maturity and many aspects of these new on-the-fly tax eavesdropping systems lead to very, very high costs on IT systems and processes.

Even though the first of these two measures don’t impact IT systems and processes significantly, the fact that these measures all come in the same period of time, and that there is massive variation within each group as well as, will lead to an unprecedented total of tax law enforcement costs to businesses and the European economy.”

And this also very interesting:

“For one, the Commission’s objective for e-invoicing to be the predominant means of invoicing by 2020 is off the table already now – let alone by that time, when we predict another three to five EU Member States will have announced plans towards one or all of these additional control measures.”

It’s truly a mystery why this situation doesn’t seem to send shockwaves through Brussels.

She’s defenitely has a good point here.

Read the full post here


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