Out-Law News 2 min. read

Consensus reached on new EU e-invoicing rules

MEPs and EU ministers have reached a "provisional agreement" on proposed EU rules which seek to establish standardised electronic invoicing (e-invoicing) in the public sector.

The European Parliament and the Council of Ministers have still to formally approve the new draft Directive on e-invoicing in public procurement but the Council recently announced that the two lawmaking bodies have reached a consensus on the proposals.

"This agreement - endorsed by the member states ... will contribute to eliminating barriers to cross-border public procurement," Michel Barnier, the EU Commissioner responsible for the internal market and services, said in a statement. "It will also ensure interoperability between national e-invoicing systems and, ultimately, a better functioning of the single market."

"Provided that the e-invoices sent by a company are compliant with the forthcoming European standard on e-invoicing in public procurement, they will ultimately be accepted by all public authorities throughout Europe," he added.

Under the draft Directive, first outlined by the European Commission in June last year, public authorities across the EU would be obliged to accept e-invoices that conform to a new standard.

The Commission has said it will ask the European Committee for Standardisation to "draw up a European standard for the semantic data model of the core electronic invoice", under the proposals. The standard should "build on existing specifications" but be "technology neutral", and would also have to be able to guarantee protection of personal data in line with EU data protection laws.

Although there are a number of existing, mainly national, e-invoicing standards used across the EU, the Commission said at the time that it wants to develop a new standard to apply across the trading bloc in a bid to boost the "shift towards paperless public administration" and reduce the cost and complexity involved for businesses looking to "participate in cross-border procurement".

Minister Kostis Hatzidakis, current president the EU Competitiveness Council, which forms part of the Council of Ministers, said that savings of €2.3 billion are expected to be made in funds allocated for public procurement as a result of e-invoicing. The Council said that e-invoices currently account for 15% at most of all invoices across Europe.

"The Directive will contribute to improving the functioning of the internal market by reducing the obstacles to entering the market, especially for SMEs, and by solving the problem of the compatibility of different e-invoicing systems in various member states," the Council's statement said. "The processes will become faster and less costly."

Once the new rules are formally adopted a new e-invoicing standard would have to be created within three years. Once the standard is published, central contracting authorities would have 18 months, and local and regional contracting authorities 30 months, to implement it.

The new Directive, once in force, will be the latest in a raft of changes being made to EU laws governing public procurement. Last month the European Parliament voted to approve three new EU Directives, on public sector procurement, utilities sector procurement and the procurement of works and services concessions by contracting bodies in the public and utilities sectors.

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