Electronic invoicing is the transmission and/or storage of invoices in an electronic format without duplicate paper documents. The electronic format may be a structured format such as XML or an unstructured format such as PDF.
Listed are some of the most common questions about e-invoicing.
Electronic invoicing offers many advantages over traditional paper invoices. The rapid electronic transmission of documents in a secure environment may provide for:
- structured data for auditing
- improved traceability of orders
- decreased reliance on paper reducing storage and handling costs
- rapid access/retrieval
- improved cashflow
- security/easier dispute handling.
No. It’s up to you whether you issue paper or electronic VAT invoices.
You can use both paper and electronic invoices, following a common consecutive numbering or two different sets of individual consecutive numbering. You can not issue electronic and paper invoices for the same supplies, or to the same customers.
No. But you must be sure that your system for issuing, receiving and/or storing electronic invoices, complies with tax authorities requirements of your country.
Electronic invoices must contain the same information as paper invoices.
You can issue electronic invoices as long as the authenticity of the origin, the integrity of invoice data and legibility of invoice content, are all ensured, and your customer agrees to receive invoices electronically.
- Authenticity of the origin means the assurance of the identity of the supplier or issuer of the invoice.
- Integrity of content means that the invoice content has not been altered.
- Legibility of an invoice means that the invoice can be easily read.
You are free to choose a method of ensuring authenticity, integrity, and legibility which suits your method of operation.
If you are issuing electronic invoices to other member states, those invoices must meet your country’s conditions for electronic invoicing. All EU member states are required by law to allow electronic cross border invoicing. Generally, the rules which apply to the cross border electronic exchange of tax documents are those of the country in which the supplier (normally the issuer of the invoice) belongs.
You may transmit invoices and credit notes electronically to third countries (that is, countries which are not member states of the EU), provided you have confirmed that this is acceptable with that country’s tax authorities.
- be able to guarantee the authenticity and the integrity of the content of your source documents throughout the storage period
- store all the data related to your invoices, including such evidence as is required to demonstrate that authenticity and integrity has been ensured, and
- be able to recreate the invoice data as at the time of its original transmission or receipt, and present the invoice data in a readable format. You must keep history files so that you can find the appropriate details from any particular time in the past if one tax authorities visiting officers asks you to do so.
The same rules apply to storage of electronic invoices as to paper invoices. You must normally keep copies of all the invoices you issue and all the invoices you receive for 5 to 10 years depending upon your country of origin.