E-Invoicing implementation in the EU ... Why can't we live together?

E-Invoicing in the European Union – Emphasizing the Need for Collaboration of the Stakeholders, Aim for Standardization and Harmonization in order to Ease and Fasten E-Invoicing/E-Reporting obligation

The core objective of the European Union (EU) has always been to foster seamless business operations across its member countries. However, the implementation of E-Invoicing and E-reporting in today's digitalized world presents a different reality altogether.

A snapshot of the developments of last week (notably mid of summer and the holiday season in Europe!!!!)

Recently, on July 28, the French tax authorities announced the postponement of the mandatory implementation of E-Invoicing, Real-Time Reporting, Invoicing Lifecycle Reporting, and reporting of payment data, with no specific/updated date for implementation set yet. The complexity of the mandate is cited as a major reason, with businesses, tax authorities, service providers, and consultants expressing readiness concerns and differing opinions on interpreting the new rules.

Similarly, Poland overruled the Senate's opinion and confirmed the E-Invoicing mandate, effective from July 1, 2024.

On the other hand, Romania and Germany received approval for implementing mandatory E-Invoicing on January 1, 2024, and January 1, 2025, respectively. There are indications that Germany might offer optional E-Invoicing from January 1, 2025, before making it mandatory on January 1, 2026. However, the Ministry of Finance in Romania still plans to implement the mandate on January 1, 2024, leaving businesses only five months to comply, without any issued tax technical regulations.

The fragmented approach to E-Invoicing and E-reporting by each EU member state is a significant reason for the challenges faced in its successful implementation. To address these issues, all stakeholders, including the European Commission, politicians, tax authorities, e-invoicing service providers, tax consultants, and businesses, need to collaborate in standardizing and harmonizing E-Invoicing and E-reporting concepts. This approach would not only combat VAT fraud but also enable stakeholders to achieve their respective objectives.

The current fragmentation needs to be replaced by a unified framework based on standardization and harmonization. By doing so, we can move towards a more cohesive and efficient E-Invoicing ecosystem across the EU. It is essential to provide businesses with ample time between the issuance of technical regulations and implementation, as at least two years of preparation are required to adapt to new requirements successfully.

Addressing concerns raised about fraud, it is crucial to recognize that businesses targeted for phased E-Invoicing implementation are not necessarily fraudulent entities. Fraudsters will find ways to commit fraud, irrespective of the invoicing system in place. Therefore, the focus should be on streamlining and simplifying the E-Invoicing process to benefit all law-abiding businesses and support efficient cross-border trade operations.

In conclusion, a united effort is necessary to overcome the challenges posed by the current fragmented approach to E-Invoicing in the EU. By collaborating and standardizing practices, the EU can ensure a smoother and more effective implementation of E-Invoicing, contributing to better business practices and compliance across member countries. Fragmentation should be substituted by standardization and harmonization. Why can’t we live together (dixit Mike Antony).

Any reactions and support are welcome!!! Feel free to leave your message in the comments or send me a personal message via Linkedin.

This message is written as my personal opinion!!!!