Up till now, rules on invoicing value-added tax (VAT) have been so complicated that they have hampered the use of electronic invoices in trading across borders. To allow businesses to save expenses and ease administrative burdens, the Ecofin Council on 16 March reached a general agreement on a directive aimed at modernising VAT invoicing requirements.

It is estimated that the new instrument can reduce the industry’s charges by up to 18 billion euros annually. It will be of particular help to small and medium-sized enterprises (SMEs), as simplified invoices will be extended to include those for smaller amounts.
.
Furthermore, it will allow SMEs to account for VAT on a cash basis. Paper and electronic invoices will be treated equally. Rules on storing of information and recording periods will be harmonised. The directive should boost electronic commerce.

The proposal also includes measures to help tax authorities tackle VAT fraud. Rules on VAT deduction will be tightened to enable speedier exchange of information on supply of goods and services internally in the EU. As businesses operating cross-border will have to report their transactions in the month of the supply, carousel fraudsters will not be able to abuse the possibility of including an invoice in a later reporting period.

http://www.consilium.europa.eu

At June 18th 2009, the CEN/ISSS E-invoice Phase II held an open meeting in Brussels. The purpose of this meeting was to present the public with the more or less final results based on the objectives of this Phase II workshop:

An adoption programme for increased electronic invoicing in European business processes.

1. Compliance of electronic invoice implementations with Council Directive 2001/115/EC and the national legislation regarding electronic invoices;

2. Cost effective authenticity and integrity of electronic invoices and related business documents regardless of formats and technologies;

3. Implementation of compliant electronic invoice systems in using emerging technologies and business processes;

4. A framework for the emerging network infrastructure of ‘invoice operators’ throughout Europe.

See also: CEN/ISSS E-invoice final deliverables June 18th – What to expect?

Taking the stand
Before we get to the impact of the results presented I would like to make some statements:

1. Performing an evaluation is not a bad thing: it provides items for improvement

2. To criticize certain aspects of proceedings of this workshop is not a bad thing either. Really, it is not, as long as it is being done in a fair way. Nevertheless I can imagine that some are not very amused with this article. To those I would like to say: it is not personal (no it is not!) and it is an attempt to amend. The definition of the verb amend is: to change in order to improve.

3. Being a chair of working group 5 for some months had no effect on the outcome of this tiny evaluation. It just provided a valuable insight in the proceedings of this workshop.

4. UPDATE: Criticising certain aspects does not mean that one’s right. This also applicable to comments of course.

Evaluation
The time has come to put the CEN/ISSS E-invoice Phase II through its paces.

1. First and foremost, the CEN/ISSS E-invoice Phase II has been spectacularly interesting as it until now is the oldest and largest initiative on a pan European level that provides a podium for e-invoicing experts to share knowledge information on a frequent basis. From that perspective, the CEN/ISSS E-invoice Phase II should earn the mark ‘outstanding’.

2. Another interesting point is that the CEN/ISSS E-invoice Phase II is open for everyone – free of charge – without an obligation to perform a contribution. That is a good thing but not outstanding as it creates quite a lot of overhead and reduces the active participation to a small amount of participants. Therefore, the mark ‘good’.

3. Quality over quantity. Or should it be the other way around? The CEN/ISSS E-invoice Phase II propagates to have the largest European community in e-invoicing. I wish to object against this statement.

First, the amount of active participants in the CEN/ISSS E-invoice Phase II is limited to a fraction of the total amount of participants in the workshops and working groups. It is like Twitter: you have active participants that ‘tweet’ and those who listen. Secondly, the EXPP Summit has a far larger community of experts (both on a theoretical and practical level) than this workshop has. Nevertheless, the frequency of the EXPP Summit is a lot lower. The EEI Platform has a far larger community (online that is) reaching 1.000 readers with its biweekly e-mail newsletter alone. Fourth, there are several other communities that can rival with the CEN/ISSS E-invoice Phase II community claim.

So, when it comes to the community size of the CEN/ISSS E-invoice Phase II, we could give it the mark sufficient. When looking at the amount of active participants (which are not all the names that are put on the CWA’s!) another mark might come into mind.

From now on it becomes a little bit prickly. Please, take a look at ‘taking the stand’ above again.

1. The phrase CWA is an abbreviation for Common CEN Workshop Agreement. A document with this is positioned a set of rules that has been commonly agreed upon. A document can only become a CWA when it has been created by a set of experts and after a public consultants.

From a technocratic point of view, the documents presented in Brussels at June 18th 2009 could theoretically all become a CWA. Theoretically because we could first of all ask ourselves whether some of the documents have enough objective quality. In some cases the –commercial- interest of some participants (experts) may have exceeded the urge to create real added value based on objective expert information. Yes, this is criticism of some sort, please note ‘taking the stand’ above yet another time. Please. Do.

Also and again from a technocratic point of view, we could ask ourselves whether the amount of active participation could turn a document up to a possible CWA level. Even with public consultation. Do the workshop, working group and consultation proceedings automatically convert documents into CWA’s?

Let’s accept the current CWA creating and adoption process. What is the value of the CWA’s produced in both Phase I and II. Are they being used on a large and repetitive basis? By service providers? By organisations? How do they help the use and adoption of e-invoicing in the European Union and its Member States?

So, evaluating the current documents we could ask ourselves whether they should automatically to be turned into CWA’s. Looking at the amount of active participants, the practical usage for organisations, service providers and other common stakeholders, I would like to give it the mark ‘sufficient’. Why- because one deliverable that stands out will be discussed in the next point.

2. The CEN/ISSS –and also E-invoice Phase II- aims at technical standardisation. The objectives of the CEN/ISSS E-invoice Phase II however seem to have little to do with technical standardisation. For instance, the objective:

”An adoption programme for increased electronic invoicing in European business processes”

leads to a website called the e-invoice gateway (which has been heavily promoted by the EEI Platform). But the most striking difference between the main objective of technical standardisation is obviously the deliverable based on the Phase II objective:

”Compliance of electronic invoice implementations with Council Directive 2001/115/EC and the national legislation as regards electronic invoices”

which leads to the Draft Good Practice Guideline. Mind you, this is a very important piece of work that can easily become a CWA and should be used by fiscal authorities all over the world. But it just has not anything to do with technical standardisation. It is the standardisation of a legal and fiscal aspect of e-invoicing. And yes, of course it has technical implementations (including the user interface of the Excel sheet). But technical standardisation issues – if any – are difficult to discover. Again we advice you to read ‘taking the stand’ above yet once more.

So when it comes to the amount of technical standardisation we can put a score to each deliverable:

- Phase II deliverable 1 – website e-invoice gateway
technical standardisation: no
CWA: no
- Phase II deliverable 2 – e-invoicing compliance guidelines
technical standardisation: no
CWA: yes!
- Phase II deliverable 3 – business process and technology assessment guide
technical standardisation: no
CWA: yes?
- Phase II deliverable 4 – Emerging network infrastructure of eInvoice service providers
technical standardisation: yes?
CWA: yes?
Keeping in mind that a Phase III is being planned we could ask ourselves whether the expected Phase II deliverables and objectives are not exceeding at least the mandate of this workshop or CEN/ISSS for that matter. Moreover we should better discuss interoperability rather than standardisation which for some are on other sides of the spectrum.

For instance, take a look at the Stork project that deals with e-identity. This project just delivered:
- Framework Mapping of Technical/Organisational Issues to a Quality Scheme
- Report on Legal Interoperability EU: STORK project Deliverable – Quality authenticator scheme
- Interim Report on eID Process Flows
- Pilots Scope
- Project portal/collaborative environment
- List of Commission A2A Services of Common Interest
- STORK Dissemination Plan

Looking at e-invoicing from the perspective of being a part of e-business and from an interoperability point of view, this information is quite useful.
What to amend?
So what to amend? A few things could be mentioned that could be used to change in order to improve (which is the definition of the verb to amend):

- redefine the mandate of the CEN/ISSS or of the next E-invoicing Workshop Phase (III)
- enable the use of webcast during public meetings
- try to aggregate a larger –online- audience and ask them for input on concept documents at all time
- don’t attempt to monopolize the process as this is no longer viable in this age of Internet, transparency and open innovation.

And also
- put less –or no- emphasis that this workshop is arguably non-commercial, because 85% of the attendees have a commercial interest and an even larger percentage of active contributors have an commercial interest.

- Try to be less picky on initiatives that have larger communities, more deliverables and impact. Yes, this one is completely biased, subjective and filled with some emotions! Anyone who wishes to confront me with this one, please do.

Instead, co-operation might be helpful. For everyone. Think about it. The EU and EC are even propagating it. Just look for: ‘enterprise+2.0’ in Google.

- Use more web 2.0: videos on youtube, etcetera.

- The ability of videoconfering: Looking back I would have been more than happy to have stayed at home and watch this session on videoconferencing.

That is it. Looking back at this article I associate it with a hedgehog. A sweet animal that catches everyone’s imagination, including spines that can be somewhat annoying. Oh, and funny of course, thinking of the game Sonic.

Lufthansa is reducing costs and paper consumption with OB10 e-Invoicing in its accounting department.

Lufthansa has announced that it is implementing electronic invoicing with OB10, the world’s leading e-Invoicing network. The objective is to use the OB10 service to generate tax-compliant invoices, thereby reducing invoice management costs both in Germany and internationally.

“OB10 is an international operation – like Lufthansa – and fulfils our requirements for electronic invoice processing in the countries that are most important to us.  Thanks to our ANY-TO-ANY DATA FORMATTING we can handle any type of invoice format – without requiring our customers or their suppliers to install additional hardware or software.”

“We are proud that with Deutsche Lufthansa AG, we are working with another client who wants to encourage their suppliers to become part of our global network.”
Although the majority of invoices at Lufthansa in Germany are already received via EDI (with the accompanying summary invoice) thousands of paper invoices for goods and services still arrive at Lufthansa every year. The manual processes for managing incoming invoices are not only time-consuming and costly, but also prone to error. All of this will now come to an end. As part of the new e-Invoicing project, which will initially be implemented in Germany and eight other countries including the US, the UK and Canada, the majority of invoices will be processed completely in electronic form using OB10.

Lufthansa equips itself for the future
In addition to the cost savings e-Invoicing delivers, Lufthansa expects the cooperation with OB10 to lead to considerable process simplification. Over the medium term, the entire Financial Supply Chain is to be moved to an electronic process. Additional advantages of the e-Invoicing system include faster transmission of invoices and significantly improved data quality as invoice information is fed directly into the ERP system and its associated archive. Lufthansa will also benefit from higher productivity in its invoice processing due to the automated validation of invoice data. Furthermore, pure electronic invoicing will greatly reduce the number of invoices from suppliers that cannot be allocated, and therefore significantly reduce the accompanying queries and complaints regarding payment. e-Invoicing also has advantages for suppliers as they not only profit from reduced process costs, but also the cost and time delays associated with posting invoices.

“OB10 is an international operation – like Lufthansa – and fulfils our requirements for electronic invoice processing in the countries that are most important to us,” says Martin Steuernagel, Department Manager for External Accounting at Deutsche Lufthansa AG. “That makes OB10 the ideal partner to simplify many of our more complex external invoicing procedures with e-Invoicing. What really tipped the scales for OB10, however, was the supplier enrolment programme, which will ensure that our international suppliers and partners will also be promptly connected to the OB10 network. Nobody else offers this type of programme – in seven different languages – and it will help us save valuable time and resources as we implement the overall project.”

“Thanks to our ANY-TO-ANY DATA FORMATTING we can handle any type of invoice format – without requiring our customers or their suppliers to install additional hardware or software,” adds Jamie Gunn, CEO, OB10. “We are proud that with Deutsche Lufthansa AG, we are working with another client who wants to encourage their suppliers to become part of our global network.”

About OB10
OB10 (www.OB10.com) is the leading global B2B e-Invoicing network. OB10 simplifies and streamlines the complex invoice-to-pay processes. Neither client organizations nor their suppliers are required to implement any hardware or software, and OB10 is independent of data file formats. OB10 can reduce the cost of paper invoice processing by typically 60 percent and can deliver an ROI in less than a year if the program follows OB10’s best practice guidelines. Operational across Europe, North America and Asia, OB10 is compliant with the requirements of VAT, tax and e-Invoicing legislation and receives invoices from suppliers in over 100 countries. To ensure unrivalled and rapid supplier enrollment, each new customer’s suppliers are supported by an implementation services team responsible for getting them up and running on the OB10 network.

These include the European Commission Recommendation 1994/820/EC, the European Directive 1999/93/EC and the European Directive 2001/115/EC. These standards have served the dual purposes of facilitating VAT administration on the one hand and fostering e-commerce on the other.

What Is The Importance Of E-Invoicing VAT Transactions In E-Commerce?
The invoice of a commercial transaction is one of the most important documents in any business. The invoice must conform to accounting, tax, business and even linguistic rules. Guidelines governing indirect taxes such as VAT that are levied on the basis of a commercial transaction specifically provide rules for authenticity of origin of an invoice as well as the integrity of its content. The invoice is also necessary in order for the recipient to claim a VAT refund. With the transformation of conventional business into e-business, all member states have individually tried to regulate the complex legal issue of invoicing. These disparate efforts resulted in a disruption of the smooth functioning of the Internal Market.

The Commission launched a multi-annual project “Simpler Legislation for the Internal Market” (SLIM) in 1996 to streamline key Internal Market Legislation. The Commission’s report on the SLIM initiative was approved by the Internal Market Council on November 27, 1997. This report includes a commitment to study “the details considered necessary for drawing up an invoice for VAT purposes and the legal and technical requirements for electronic invoicing”.CEN, the European Committee for Standardization or Comité Européen de Normalisation, was founded in 1961 with twenty nine national members to develop voluntary European standards and to foster the European economy in global trading.

In 2003, at the request of the European Commission, CEN set up an open “E-Invoicing Focus Group” and issued a report analyzing the requirements on standardization issues relating to electronic invoicing resulting from the new VAT legal framework. The Council Directive 2001/1115/EC recognizes the legal validity of electronic invoices for VAT purposes and specifies the related, required, technical conditions.

What Is The European Commission Recommendation 1994/820/EC.?
The Commission Recommendation was developed at the request of the European Trade and Industry Electronic Data Interchange (EDI) user groups to provide the required legality, acceptability and security in the use of EDI in European member states. The Recommendation includes the Model European Interchange Agreement that was developed in line with the work carried out by the International Chamber of Commerce and several major industry sectors, including the automotive, electronics, retail and distribution sectors.

Trading partners were advised to agree and sign interchange agreements based on the European model prior to commencing the exchange of EDI messages. The Recommendation specifically deals with the definition of EDI, EDI messages, essential characteristics of EDI messages, security of EDI messages, admissibility of evidence regarding EDI messages, storage of EDI messages, EDI standards, applicable laws and security measures when using EDI.

Article 2 of the Commission Recommendation also provides for alternative provisions for accepting electronic invoices when they are sent by EDI, and the agreement then provides for the use of procedures guaranteeing authenticity of origin and integrity of contents. The Recommendation deals with the legal status of EDI by mandating that EDI is admissible in a member state to the extent permitted by national law.

How Did Directive 1999/93/EC Contribute To The Development Of E-Invoicing?
The European Parliament and Council issued Directive 1999/93/EC on Community Framework for Electronic Signatures. The Directive introduced a legal framework to guarantee EU-wide recognition of electronic signatures. This Directive recognizes the importance of the electronic signature as a prerequisite for e-invoicing and security of data transmitted electronically.

The purpose of the Electronic Signature Directive is to facilitate the use of electronic signatures in e-invoicing and to contribute to their legal recognition. It establishes a general framework for electronic signatures and certain certification services to ensure the proper functioning of the internal market. Electronic signatures are also considered important as they facilitate the wide use of e-invoicing. Apart from its commercial value, the invoice is an accounting document, it has legal implications to both transacting parties and it is the basis for VAT declaration and reclamation, statistics declaration for intra-community trade and export and import declaration for extra-community trade.

How Has Directive 2001/115/EC Enabled E-Invoicing For VAT?
European Directive 2001/115/EC specifically deals with e-invoicing. It clarifies the implementation of e-invoicing and aims to introduce harmonized procedures for paper as well as e-invoicing across all member states. The Directive outlines the liability of taxable persons and their service providers for the integrity of content and authenticity of origin of electronic invoices for VAT purposes. This relates mainly to the invoices exchanged electronically and to the storage of invoices.

Under the Directive, no member state can refuse the invoice of goods or services sent by electronic means provided that the authenticity of the origin and integrity of the contents are guaranteed by means of an advanced electronic signature (AES), or by means of EDI as defined in Commission recommendations. Member states may, however, require the advanced electronic signature to be based on a qualified certificate. Invoices may also be sent by other electronic means subject to acceptance by the member state(s) concerned.

Although the EDI invoice message has been adopted by several industry and trade sectors in Europe, it has not been implemented to its full potential. Paper invoices have been maintained to overcome difficulties surrounding VAT regulation. Several member states introduced special procedures to allow EDI paperless invoicing but still require companies to apply for permission from the tax administration and in some cases to exchange summary VAT control messages, electronically or on paper. For cross-border electronic invoicing, companies are exchanging electronic invoices for company administration application, but are forced to parallel the exchanges with paper invoices to meet member state VAT requirements.

Source: ibls.com

Update: The report outlines the progress made during the first year of the group’s mandate and represents an important step towards a European Electronic Invoicing Framework which the Expert Group will develop until the end of 2009. Stakeholders are invited to comment on the report until 13 March 2009. They should be sent by email to markt-e-invoicing@ec.europa.eu.

Responses will be shared with the Expert Group and potentially be placed on the Commission’s website unless explicitly indicated otherwise by the stakeholders in their response.

On 27 January 2009, the E-invoicing Expert Group disclosed its mid term report on e-invoicing harmonisation. The report deals with business requirements, legal and regulatory issues, network aspects, interoperability and standards. All in a compact 37 pages document.

Vision

The E-invoicing Expert Group states that with this they would like to

”set out a vision for the European e-Invoicing environment, in which trading parties can inter-operate in an open ecosystem based on harmonised legal provisions and greater standardisation. The environment should in particular be attractive to small and medium-sized enterprises and offer the market a competitive array of service provider and other solutions. Public administrations should take a lead in helping to create the environment.”

Business requirements

The Expert Group defined the following key business requirements for a widely adoption and use of e-invoicing:

-          a favourable ratio between (initial and recurring) costs and benefits

-          ease of use (and also maintenance and implementation) of e-invoicing solutions

-          a reduction of manual work for the sender and the receiver and automation of the entire supply chain

-          harmonisation, simplification and clarity of legal requirements

-          communicating and sharing best practices

-          creating a competitive market for service providers in all layers

-          ensures trustworthiness and data protection

Legal and regulatory issues

The Expert Group depicts that the current regulatory framework is a barrier to the adoption and use of e-invoicing and the creation of a Single Market integration. The Expert Group proposes equal treatment of both paper based and electronic invoices.

Luckily both the PriceWaterhouseCoopers analysis of the regulatory frame and the proposal of the European Commission to amend the current Invoicing Directive state that that

”to promote e-invoicing this proposal aims to eliminate the barriers to e-invoicing in the VAT Directive by removing the [legal] differences between invoices sent by electronic means and those sent on paper, thereby ensuring the method of transmission is neutral.’”
 

Also the majority of the Expert Group proposes the CEN/FISCALIS Draft Good Practice Guidelines as an effective means of creating a control mechanism from a VAT control and fraud prevention point of view.

Interestingly enough the PriceWaterhouseCoopers prefers

“an approach similar to the one successfully taken with the Code of Conduct for Transfer Pricing5. We also refer to the Guidance paper on Transaction Information and Record Keeping published by the OECD forum of Tax Administration in May 2004. We would therefore recommend envisaging setting up a mixed working group in which all Member States and a representative number of businesses are represented. The objective would be to develop a common standard set of documentation to be kept by businesses regarding their invoicing and archiving processes, systems and technology. The purpose of the working group is to develop a pragmatic solution and approach for taxpayers to develop such a documentation of their invoicing and archiving processes baring in mind the different electronic invoicing and archiving solutions that could be used by businesses.”

Additionally the proposal states that prior acceptance before sending an e-invoice is being abolished as is the list of technologies that can be used for e-invoicing. Even the right for Member Countries to set specific requirements will be abolished.
 

Network effects – denying the BSP’s achievements

The E-invoicing Expert Group also states that to achieve network effects encouragement should be given to the development of a network model which creates interoperability, a choice of services, and wide reach. The E-invoicing Expert Group then states:

”Today’s service providers often operate in ’silos’ or so-called three-corner models, although various connectivity initiatives are being pursued and some four-corner models exist. But more is required, as without a more interoperable environment SMEs will have to make an exponentially growing number of connections to their trading partners; this is unsustainable.”

Now, this is quite interesting. First of all because at this point the consolidators have created the current achievement in e-invoicing. This can not easily be dismissed. But then again, it is easier to set something apart from the other when the other has already realised achievements. From that point of view the statements in the interim report can be interpreted as a compliment.

From that perspective the phrase “although [..] some four-corner models exist” could be interpreted in such a way that the four corner (banking) model could be better suited for mass adoption across Europe than the BSP’s consolidator model. But then again what proof is there for this statement at a European level at this very moment? Even compared to the achievements by the BSP’s?

So what will the EEI Framework be like?
The Expert Group made the following recommendations for the content of the European

e-Invoicing Framework are proposed:

-          The Framework will primarily be a set of actionable recommendations and proposals, for which the support of others will be sought.

-          It will be organised as a series of five layers or pillars that need to be addressed and which all
interrelate on a coherent basis.

-          It will not itself be a Scheme or contractual framework for others to formally adhere to

-          It will include the elements identified and set out below:

- Definition and scope of the e-Invoicing Framework
- An overall conceptual structure or vision
- Business requirements for all market segments
- Standards recommendation
- The (even better: a) proposed network model, including the proposal for a framework for
   interoperability.
- Legal and regulatory proposals
- Recommendations for a communications plan.
- Set out a Road-map for implementation
- Glossary of terms
- Others to be defined

In the eye of the beholder it has quite some similarities with way the (mobile) telecommunications sector was liberalised. For more detailed information, look at the report below.

Communicating e-invoicing

Most of the things said above were based on the executive summary of the interim report. But that does not necessarily mean that this executive contains all the essential aspects of the report.

A closer look a t the report at page 30 a communications ‘annex’ is presented. Whereas phrasing on the E-invoicing Framework is quite liberal and wide, this annex is firm and almost imperative! For instance:

”Indeed it can be argued that one of the most important – if not the main – factors currently holding back the development of e-Invoicing is a lack of awareness, communication and dissemination of convincing information to market participants, so as to create the level of confidence required to go ahead and implement”

And

”Thus there is an evident need for a major effort in making clear to potential users, service providers, regulatory bodies, government agencies and other stakeholders what (and often how

surprisingly little) needs to be done and what (and often how surprisingly large) the gains will be.”

And also

“Communication initiatives should not be a one-off exercises but should be part of a regular plan and process to communicate regularly, both periodically (e.g. quarterly newsletter) and event driven (e.g. when a new report is published, when major administrations commit to e-Invoicing, upon significant success stories from industry etc.).”

Why this is neither part of the core of the interim report nor in the executive remains a mystery. But what is clear is that communication is of the essence.

The EEI Platform is very much willing to support this recommendation of all recommendations with:

- a comprehensive activity plan
- social networks
- weblog
- forum
- innovation guideline
- interaction framework
- a common body of definitions.

 
Read the Mid-Term Report below:

Read the ‘SEPA Credit Transfer XML customer-to-bank Implementation Guidelines for the Netherlands’

The initiating group ‘SEPA Migration NL’ have also come up with the Dutch Implementation Guidelines set to create a ‘level playing field’ for their corporate customers and software vendors active in SEPA.

The Dutch Association of Banks strongly recommends the use of the Dutch bank-customer SCT Implementation Guidelines to banks and their corporate clients.

The use of the Dutch Implementation Guidelines does not exclude the use of Belgian or other Implementation Guidelines. A bank can make additional appointments with its customers.

The new bank-client standards will replace the existing, because they do not meet all the SEPA requirements. Thus, BIC and IBAN cannot be used.

Source: www.sepanl.nl

Late June 2008 the CEN/ISSS eInvoice Phase II Workshop unveiled the Draft Good Practice Guidelines. The objective of this document is to reduce some of the principal areas of uncertainty and resulting inefficiencies on the e-invoicing market with one single set of good practice. These guidelines should be applicable to both businesses and tax administrations across Europe.

CEN and eInvoicing
CEN is acronym for: COMITÉ EUROPÉEN DE NORMALISATION and has a focus on standardisation aspects. CEN carries out numerous standardisation efforts, one of which is the CEN/ISSS initiative. CEN/ISSS is the name given to CEN’s ICT (Information and Communication Technologies) sector activities. It provides market players with a comprehensive and integrated range of standardisation services and products, in order to contribute to the success of the Information Society in Europe. CEN/ISSS works through CEN Focus Groups, Technical Committees and Workshops.

The CEN/ISSS eInvoicing Phase II Workshop
The CEN/ISSS Workshop Phase II has assumed the overall responsibility, as far as CEN is concerned, for the standards aspects of the European Commission’s expert group on electronic invoicing, complementing and linking with the relevant Commission groups, and ensuring the relevant global standards activities are correctly informed and primed.  In this activity, it aims to ensure collaboration with other CEN/ISSS groups, including WS/ePPE and WS/eBES, with UN/CEFACT (TBGs1 and 5), ISO TC 68 and ETSI/TC ESI.

The eInvoicing Phase II Workshop objectives
The objective of this particular Workshop is to help to fill gaps in standardization for the use of electronic invoice processes, to identify the various practices in member states, to integrate the emerging technical and practical solutions into effective good practices, and to define and disseminate these good practices for e-invoices in close coordination and cooperation with private industry, solution providers and public administrations.
 
Five initial projects
Five initial Task Groups (TG’s) have been established with a focus on:

-          Enhanced adoption of electronic invoicing in business processes in Europe;

-          Compliance of electronic invoice implementations with Council Directive 2001/115/EC and Directive on the Common
   System of Value Added Tax (2006/112/EC) as well as Member States’ national legislation as regards electronic
   invoicing

-          Cost-effective authentication and integrity of electronic invoices regardless of formats and technologies

-          Effective implementation of compliant electronic invoice systems in using emerging technologies and business
   processes and

-          Emerging network infrastructure of invoice operators throughout Europe.

TG2 and TG3: The Draft Good Practice Guidelines

TG 2 (compliance of electronic invoice implementations) and TG 3 (cost effective authentication and integrity) decided to cooperate and created the Draft Good Practice Guidelines. The Draft Good Practice Guidelines identify two major obstacles when it comes to the regulatory aspects of e-invoicing adoption.

First, “businesses that implement electronic invoicing are often faced with thousands of technical and process implementation options along the way. In the absence of implementation-relevant rules emanating from tax administrations or standards bodies, the uncertainty surrounding these many choices creates a significant barrier to investment in electronic invoicing. As a result, for those vendors and users that choose to invest nevertheless, it is hard to make any value judgment as to how “compliant” their services and solutions are. Corporate e-invoicing users, Service Providers and solution vendors that are taking steps to develop and maintain VAT-compliant services naturally have a desire to have to a concrete yardstick against which to measure and with which to demonstrate their compliance.”

Second, nowadays “most tax administrations do not provide accreditation services or self-assessment programmes to assist e-invoicing users or their Service Providers to ascertain that e-invoicing systems are VAT-compliant. Tax administrations’ audit methodologies and tools are often developed based on the experiences of law enforcement and not widely propagated to businesses as compliance checklists.”

How it works

As stated above, the Draft Good Practice Guidelines seek to reduce some of the principal areas of uncertainty and resulting inefficiencies on the e-invoicing market with one single set of good practice Guidelines for both businesses and tax administrations.

It consists of two documents: one word document and one Excel sheet.

The Word document provides context to the Excel document and tries to explain how one should use the Excel. The Excel sheet identifies the main issues in question at each processing step during the life cycle of an electronic invoice for different invoicing methods (direct invoicing from Supplier to Buyer as well as Self-Billing) and provides detailed process guidance for a variety of implementation options including web publication, the use of various integrity and authenticity-enhancing methods and the retention of electronic invoices.

The Excel sheet takes into account:

-          who directs the e-invoicing process

-          whether an intermediate party is involved

-          the possibility of a self billing variant

-          the method being used to guarantee authenticity and integrity: EDI, digital signatures, other instruments

-          the predefined (business) process steps necessary to perform e-invoicing

Based on your choices in these variables, the Excel sheet should be able to present you:

-          the inherent tax risks that your organisation poses when initiating e-invoicing based on the choices made.

-          the tax requirements necessary or even obligatory needed to address the risks

-          the controls or solutions that should be in place to ensure the risks are avoided

Concluding remarks
The Draft Good Practice Guidelines are very promising, as they are intended to rule out uncertainty on e-invoicing form a legal/VAT/compliance perspective.But there are some downsides to this version of the Draft Good Practice Guidelines.

Hence the only two percepted barriers to full scale adoption of e-invoicing: standardisation and awareness, would remain.

First of all the Excel sheet does not, or at least not very easily, provide the results needed for an organisation get a sense of safety. It might be a good idea to create a database version that is much more accessible.

Second, this Draft Good Practice Guideline is still a concept. Or as the Word document states: “These Guidelines and Commentary are a work in progress and out for review. While every effort has been made to ensure consistency with legal requirements that apply to e-invoicing in the European Union, no guarantees of legal compliance or fitness for purpose are made by the drafters or CEN; any use of these documents is at the user’s own risk”.

Download the Draft Good Practice Guidelines (Word)
Download the Draft Good Practice Guidelines (Excel)

The IDABC programme (http://ec.europa.eu/idabc/) is supporting the design and development of eProcurement solutions compliant with the public procurement Directives 2004/17/EC and 2004/18/EC, by providing tools (mainly, the eProcurement demonstrators, the helpdesk service and the Functional Requirements) that can be used as examples and guidelines.  The eProcurement Forum, a community within the ePractice portal, is organizing in cooperation with Auftrag.AT a workshop to exchange experiences about the development of Public eProcurement solutions aligned with the European legislation. The workshop will take place on the 14th January 2009 at the Schönbrunn Palace Conference Centre in Wien (Austria).
  
The participants will have the opportunity to have an insight into the IDABC eProcurement demonstrators and to be presented with some eProcurement cases developed using the IDABC tools as sources of inspirations.  This workshop targets all the European eProcurement experts and in particular those belonging to:

• Public Administrations that are setting up new eProcurement solutions and are interested in capitalising on other experiences and in receiving information on available guidelines and tools
• IT companies in charge of the development of eProcurement solutions
• Organisations responsible for existing eProcurement solutions that need to be aligned with the European legislation

A “Call for presentations” is open until the 5th December 2008. Please contact the eProcurement Forum by e-mail  (eprocurement@epractice.eu) if you need further information on the event, or if you are interested in sharing your experience and in presenting a case.

Registration is possible via the ePractice website at http://www.epractice.eu/workshop/37.  Please note that attendance is free and open to everyone who has been registered on the ePractice portal. Since the available places are limited, interested experts are invited to register soon.