New EU Invoicing Directive will come into effect in all EU member states on 1 January 2013 at the very latest (Germany, for example, has already implemented the new rules and allows among other to submit e-invoices in PDF format). Under the new Directive the authenticity, integrity and legibility of all invoices (paper and electronic) still need to be ensured, but the requirements on how to do this have been considerably simplified. Electronic signatures and EDI will be no longer mandatory when issuing e-invoices – they represent only two possible technical solution to choose from. Instead of using one of those two technologies the businesses can choose to rely on their “business controls which create reliable audit trail” to fulfil their invoicing and archiving obligations.

It is yet to be seen what exactly will the tax authorities expect from the businesses to implement in practice. This information has not been communicated yet but I expect that it will include an audit trail between a supply and the related invoice, reliably matching the various documents issued by the business (e.g. order, order confirmation, shipping note, invoice, payments notice, etc.).

The invoicing directive also introduced new wording requirements which will help to unify the text that must be stated on invoices for supplies where no VAT is charged (such as “reverse-charge” or one of the “special schemes”). This will help simplifying the invoicing formalities by unify the wording across the EU.

I recommend to start thinking about the implementation of the e-invoicing procedures compliant with the simplified requirements and also to review existing invoices (both in paper and electronic form) if they comply with the new invoicing requirements.