ICC Backs EC Proposals For Electronic VAT Invoicing

by Robert Lee, Tax-News.com, London

11 August 2009

The International Chamber of Commerce (ICC) has put weight behind proposed changes by the European Commission regarding electronic VAT invoicing, particularly the planned abolition of technology-specific requirements for the transmission of electronic invoices.

“The early adoption of electronic invoicing by all countries with VAT or GST systems would simultaneously streamline tax administration, reduce the costs of tax compliance for businesses and have a positive impact on the environment,” said Robert Couzin, Chair of the ICC Taxation Commission.

In a statement, the ICC advocates that EU Member States adopt the proposal of the European Commission and invites non-EU countries to consider equal treatment as a core principle in the future. It notes in particular proposals for the introduction of the so-called equal treatment principle, under which a single set of rules will apply to both electronic and paper invoicing. The proposal is to replace the current limited number of implementation options with technology-neutral requirements, and will allow businesses to make decisions to ensure their processes are robust and trustworthy.

The proposal recognizes that any electronic document can serve as an electronic VAT invoice, provided the mandatory data elements such as name and address are included and that the requirements for authenticity and integrity of archived invoices are maintained.

This technologically-neutral solution implies that a fax, PDF, or EDI message could serve as an electronic invoice and evidence of a sales transaction as long as the sending and receiving companies can demonstrate on audit that the invoice is real and unchanged.

The proposal by the EU Commission also reflects the view of the European Commission Expert Group on e–Invoicing, which has been a strong proponent of equal treatment of paper and electronic invoices. The Expert Group supports the view that businesses should be free in their choice of controls regarding VAT compliance of their invoices, whether paper or electronic.

Christiaan van der Valk, co-chair of the ICC EBITT Commission’s Task Force on Security and Authentication, said, “Throughout its decades of close involvement in the development of international law, ICC’s Commission on E-Business, IT and Telecom has consistently advocated technology neutrality as an important direction for ensuring sustained technology innovation and user choice.”

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