The briefing is taking place ahead of talks on the matter between HMRC and the European Commission.

Under Article 237 of the Principal VAT Directive, the EC is obliged, by 31st December 2008 at the latest, to present a report and, if appropriate, a proposal amending the conditions applicable to electronic invoicing in order to take account of future technological developments in that field.

As part of this process the European Commission has engaged Price Waterhouse Coopers (PWC) to conduct a study. Two questionnaires have been distributed, one seeking input from EU fiscal administrations and the other seeking input from the wider European business community.

The JVCC is seeking views on the following aspects of VAT invoicing:

• Principles underlying negotiation and change
• Current VAT invoicing
• The future of VAT invoicing
• Electronic invoicing
• Involvement of the JVCC going forward.

With regard to the issue of electronic invoicing, the JVCC explained that currently, HMRC has interpreted ‘electronic invoicing’ in the widest terms.

It revealed that:

"For UK purposes it includes at one end of the scale electronic transmission of invoice data using electronic signatures and ‘EDI’ transmissions; and at the other extreme permits web-based invoicing and .pdf invoice attachments to email sent between supplier and customer."

"Article 233 of 2006/112/EC provides the legal basis for electronic invoicing within the EU and determines that the authenticity of origin and integrity shall be guaranteed by one of three methods:

• by means of an advanced electronic signature
• by means of Electronic Data Interchange (EDI)
• by other electronic means."

"At present the inclusion of ‘other electronic means’ provides a situation that offers a wide scope of possibilities in respect of acceptable electronic formats. But it also creates an uncertainty concerning acceptability of formats across the European Union."

"The key questions, on which we would welcome opinion from UK businesses, are therefore:

• Would you prefer a flexible definition of electronic invoicing and accept the potentially restrictive conditions that might be applied by individual Member States?
• Would you prefer regulatory certainty for electronic invoicing across the European Union even if this is at the cost of flexibility?"

Views and responses to the questions contained in the paper are welcomed until 29th August 2008.