Simpler rules on VAT invoicing

Up till now, rules on invoicing value-added tax (VAT) have been so complicated that they have hampered the use of electronic invoices in trading across borders. To allow businesses to save expenses and ease administrative burdens, the Ecofin Council on 16 March reached a general agreement on a directive aimed at modernising VAT invoicing requirements.

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It is estimated that the new instrument can reduce the industry's charges by up to 18 billion euros annually. It will be of particular help to small and medium-sized enterprises (SMEs), as simplified invoices will be extended to include those for smaller amounts. Furthermore, it will allow SMEs to account for VAT on a cash basis. Paper and electronic invoices will be treated equally. Rules on storing of information and recording periods will be harmonised. The directive should boost electronic commerce.

The proposal also includes measures to help tax authorities tackle VAT fraud. Rules on VAT deduction will be tightened to enable speedier exchange of information on supply of goods and services internally in the EU. As businesses operating cross-border will have to report their transactions in the month of the supply, carousel fraudsters will not be able to abuse the possibility of including an invoice in a later reporting period.

More information:
Press release 
Public debate 
Webcast of press conference