New EU laws would enable development of new standard for e-invoicing in public procurement

Out-Law News | 27 Jun 2013 | 5:16 pm | 2 min. read

Businesses will be able to invoice public bodies across the EU in a standardised way if proposed new EU laws are introduced.

The European Commission has set out a draft Directive on electronic invoicing (e-invoicing) in public procurement (11-page / 82KB PDF) which would oblige EU public authorities to accept e-invoices that conform to a new standard to be developed under the new framework.

Under the Directive the Commission would as the European Committee for Standardisation to "draw up a European standard for the semantic data model of the core electronic invoice". The standard should "build on existing specifications" but be "technology neutral", and must also 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 is seeking 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".

"The adoption of e-invoicing in Europe is still very limited, accounting for 4 to 15% of all invoices exchanged," according to explanatory information attached to the draft Directive document. "An initiative in the area of e-invoicing in public procurement would prevent the further fragmentation of the internal market and facilitate the uptake of e-invoicing."

"The multiplicity of non-interoperable standards results in excessive complexity, legal uncertainty and additional operating costs for economic operators using electronic invoices across Member States. Economic operators wishing to carry out cross-border procurement activities are often required to comply with a new e-invoicing standard each time they access a new market," it said.

"By discouraging economic operators from undertaking cross-border procurement activities, the divergent legal and technical requirements concerning electronic invoices constitute market access barriers in cross-border public procurement and obstacles to trade. They obstruct the fundamental freedoms and thus have a direct effect on the functioning of the internal market," it said.

Alongside the draft Directive, the Commission has also set out its vision for achieving "end-to-end e-procurement" within public administration. (14-page / 161KB PDF) The communication has called on EU member states to take a number of steps, including to make it simpler for businesses to use e-procurement systems.

In a separate development earlier this week, the European Commission set out new guidance for public sector bodies to follow when procuring ICT systems and services. The guide outlines how the bodies can minimise the risk of becoming locked in to particular suppliers for unduly long periods, and make the best use of ICT standards.

"Many organisations are ‘locked’ into their ICT systems because detailed knowledge about how the system works is available only to the provider, so that when they need to buy new components or licences only that provider can deliver," a communication issued alongside the guide said. "This lack of competition leads to higher prices and some € 1.1 billion per year is lost unnecessarily in the public sector alone."

"Making better use of standards allowing competitors to provide alternative solutions will diminish lock-in and increase competition, thus reducing prices and potentially increasing quality. This is because standards determine the key element of a technology and create a level playing field for all ICT suppliers," it said.