European Union working on new directive to standardize electronic invoicing in Member States and simplify VAT management
The European Commission is preparing to bring a new directive to the table in Brussels that will not only enshrine new rules for the management of VAT in Member States, but also establish new rules for European electronic invoicing. After the entry into force as of 1 July 2021 of the new rules governing Value Added Tax (VAT) for distance sales in the EU, and the creation of the special one-stop shop (OSS) scheme, it is now the turn of electronic invoicing.
The first proposals will be discussed in Brussels as early as the end of 2021, with the aim of arriving at a new directive by autumn 2022. Italy is already ahead of the curve with e-invoicing, which became mandatory starting in 2019 and is increasingly used by VAT-registered freelancers and businesses. In addition, the Inland Revenue Agency had already said it was ready to extend the obligation also to holders of a flat-rate VAT number and the regime of minimums, and is preparing for new national regulations. For this reason, more and more professionals, even flat-rate, are relying on online services and management software such as those of Libero SiFattura. The free Basic plan allows you to create and receive e-invoices, while the Lite plan at 29 euros per year plus VAT also allows you to send them. Finally, there is the Pro plan, which at 49 euros per year plus VAT also allows you to share access with accountants and collaborators, to keep your accounts in order.
EU e-invoicing: where are we
Today there is already a kind of European e-invoicing, which is defined in Directive 2014/55 and is in force only for public procurement. With the directive, the EU made e-invoicing mandatory starting in 2019 for central public bodies and starting in 2020 for local public bodies as well. Specifically, e-invoices had to be received in the XML formats UBL 2.1 and CII 16B, in accordance with the European technical standard EN 16931.
The goal of the directive was to find a model that would ensure the interoperability of invoices between different member states, so that data processing could be automated. Once again, the objective of the European Commission will be to define standards for the creation of an electronic invoicing system that is interoperable, indicating a common regulation for all EU countries. A path already followed with the European EPC, for which the Union has defined the technical standards to be followed and the criteria to be adopted to extend its validity among all States.
Electronic Invoicing Compulsory in Italy
In Italy, electronic invoicing has now been cleared through customs and more and more companies and professionals are using it. In fact, the Italian government has introduced the e-invoicing obligation after receiving approval from the EU with decision 2018/593, which made e-invoices mandatory for VAT holders as of January 1, 2019. Exempt from the obligation for now only members of the flat-rate and minimum scheme, who can still use paper invoices. A situation that may not last long: the Inland Revenue Agency has already expressed the EU’s willingness to extend the electronic invoicing obligation also to the flat-rate and minimum-rate taxpayers.
Electronic Invoicing: the advantages
In the last two years, electronic invoicing has proven to offer numerous advantages to those who choose this system, which is safe, fast and allows for a digital archive that can always be consulted. Moreover, for those who use electronic invoicing, the time limit for tax assessments by the Inland Revenue Service has been reduced from 5 to 4 years.