Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing
Date: 2009-01-28
Institutions: European Commission
Subjects: VAT, basis of tax assessment, distributive trades, provision of services, tax exemption, tax harmonisation, tax on consumption, tax relief

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.1.2009 
COM(2009) 21 final 

2009/0009 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2006/112/EC on the common system of value added tax as regards 
the rules on invoicing  

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EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

110 

Grounds for and objectives of the proposal 

Council  Directive  2001/115/EC  (‘the  Invoicing  Directive’)  introduced  common  EU 
rules on VAT invoices, deemed necessary for the internal market to function properly. 
However,  the  aim  of  simplifying,  modernising  and  harmonising  the  rules  on  VAT 
invoices was not fully met: the many options currently available to the Member States 
have led to a less than harmonised set of invoicing rules. This can clearly be  seen in 
relation to the different rules in place for e-invoicing, and is generally regarded as one 
of the barriers to increased use of e-invoicing. 

The  Invoicing  Directive,  now  incorporated  in  Council  Directive  2006/112/EC  (‘the 
VAT Directive’), required the Commission to report to Council by 31 December 2008 
on technological developments in e-invoicing and to present a proposal if appropriate. 
As  the  Invoicing  Directive  did  not  fully  meet  its  stated  objectives,  the  proposal 
accompanying the report to Council has been widened to address the shortcomings of 
provisions on invoicing.  

120 

General context 

Unnecessary administrative burdens hamper growth and  inhibit innovation. The rules 
on  invoicing  in  the  VAT  Directive  impose  information  obligations  on  nearly  all 
businesses  in  Europe.  A  simplification  of  these  rules  has  therefore  a  considerable 
potential to reduce the administrative burden on businesses. 

Moreover, compliance with the VAT requirements hinders the take up of e-invoicing, 
with  the  result  that  businesses  are  losing  out  on  potentially  large  cost  savings.  If 
business  is  to  be  encouraged  to  become  more  efficient,  barriers  to  using  new 
technologies need to be removed. 

Together  with  introducing  a  more  simplified  and  harmonised  set  of  modern  rules, 
consideration also needs to be given to the issue of VAT fraud. Significant work has 
been  done  to  tackle  VAT  fraud  and  any  changes  to  the  invoicing  rules  should  not 
undermine that work but seek to complement it.  

Existing provisions in the area of the proposal 

VAT Directive 2006/112/EC 

Consistency with the other policies and objectives of the Union 

The  overriding  aim  of  the  proposal  on  invoicing  is  to  create  a  modern  set  of 
harmonised  rules  that  simplifies  the  invoicing  requirements  for  businesses  whilst 
allowing tax administrations effective means of ensuring that tax is paid. This can be 
seen as supporting four key aspects of the Commission’s programme.  

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Reducing burdens on business 

In January 2007, the Commission presented an ambitious Action Programme aimed at 
reducing  administrative  burdens  on  business  in  the  EU  by  25%  by  2012.  The  Action 
Programme was endorsed by the Spring European Council in March 2007. The VAT 
Directive is among the 42 legal acts in the scope of the Action Programme. Within this 
directive  the  invoicing  rules  represent  a  key  area  where  information  obligations  are 
imposed on businesses. 

The  present  proposal  aims  at  reducing  the  burdens  stemming  from  these  rules.  In 
particular  it  aims  to  ensure  the  acceptance  by  tax  authorities  of  electronic  invoices 
under  the  same  conditions  as  applied  for  paper  invoices.  Furthermore,  the  present 
proposal  aims  at  creating  a  set  of  harmonised  rules  on  invoicing  by  reducing  the 
options allowed for Member States. Businesses regard a common set of standard rules 
on invoicing as crucial to reducing the burdens placed on them. 

In its opinion of 22 October 2008, the High Level Group of Independent Stakeholders 
on  Administrative  Burdens  pointed  to  the  large  potential  for  administrative  burden 
reduction  in  the  area  of  invoicing  and  endorsed  the  principle  of  equal  treatment  of 
electronic and paper invoices by tax authorities. 

Promoting SMEs 

The Small Business Act (SBA) was adopted by the Commission on 25  June 2008. It 
sets out a list of measures to be taken both by Member States and by the Commission 
with the common aim of promoting SMEs. 

This  proposal  complements  the  SBA  by  extending  the  scope  for  using  simplified 
invoices,  including  those  for  smaller  amounts  which  are  particularly  important  to 
SMEs, and by giving all Member States the opportunity to allow SMEs to account for 
VAT on a cash basis under a cash accounting scheme.  

Increasing the use of e-invoicing 

The Lisbon Agenda, focusing on growth and jobs, is a key priority for the Commission. 
Encouraging the use of e-invoicing by removing legal obstacles to the transmission and 
storage of e-invoices can help businesses reduce costs and increase efficiency, and so 
play a part in helping to meet the targets set out in the Lisbon Agenda. 

An expert group on e-invoicing, set up by a Commission Decision, has highlighted the 
VAT Directive as a key piece of legislation with a direct bearing on the up-take of e-
invoicing, although by no means the only one. 

Also,  the  Single  European  Payment  Area,  which  was  launched  in  the  beginning  of 
2008 in order to harmonise electronic payment processes across Europe, and the aim of 
promoting e-invoicing can be of mutual benefit to each other given the inherent links 
between invoices and payments.  

To  promote  e-invoicing  this  proposal  aims  to  eliminate  the  barriers  to  e-invoicing  in 
the  VAT  Directive  by  removing  the  differences  between  invoices  sent  by  electronic 
means and those sent on paper, thereby ensuring the method of transmission is neutral. 

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Helping to tackle fraud 

The Commission published a communication on 31 May 2006 on the need to develop a 
coordinated  strategy  to  improve  the  fight  against  fiscal  fraud  (COM(2006)  254). 
Certain  forms  of  VAT  fraud  mentioned  in  the  communication,  such  as  unauthorised 
deductions and carousel fraud, rely on the invoice in order to perpetrate the fraud. 

While an invoice can be used to commit fraud, it is in many cases the main document 
used by the tax authorities to check that tax is paid. With this is mind, in his oral report 
to ECOFIN in the meeting of 14 May 2008, Commissioner Kovacs stated that ‘when 
updating  the  invoicing  rules,  the  aspect  of  improving  the  possibility  for  the  tax 
authorities to control the taxable persons should be taken into account’.  

This proposal includes measures to help tax authorities better tackle VAT fraud. These 
measures include tightening up the rules on the role of the invoice in VAT deduction 
and  enabling  speedier  exchange  of  information  on  intra-Community  supplies.  The 
latter  measure  complements  the  Commission  proposal  to  cut  the  time  limit  for 
exchanging information between Member States on recapitulative statements. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

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Consultation methods, main sectors targeted and general profile of respondents 

Public consultation 

Summary of responses and how they have been taken into account 

Based  on  a  selection  of  recommendations  from  the  study  on  invoicing,  and  general 
principles  on  e-invoicing  developed  by  the  Expert  Group  on  E-invoicing,  the  general 
public  were  invited  to  comment.  In  general,  business  and  business  associations  were 
strongly  in  favour  of  the  recommendations  put  to  the  public  consultation.  Those 
recommendations are largely reflected in this proposal. 

An  open  consultation  was  conducted  over  the  internet  from  24  July  2008  to 
19 September 2008. The Commission received 64 responses. The results are available 
on http://ec.europa.eu/taxation_customs/common/consultations/tax/index_en.htm. 

Collection and use of expertise 

221 

Scientific/expertise domains concerned 

On  25  July  2007  the  Commission  launched  an  open  call  for  tender  for  a  study  on 
invoicing.  The  closing  date  for  tenders  was  7  September  2007.  The  contract  for  the 
study was signed with the successful contractor on 17 December 2007.  

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Methodology used 

The aim of the study was threefold. Firstly, it was to identify the different rules in each 
of  the  27  Member  States  in  respect  of  the  implementation  of  the  Invoicing  Directive 

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and to provide data on the take up of e-invoicing in the EU. Secondly, it was to analyse 
the  difficulties  that  businesses  faced  in  meeting  the  various  invoicing  obligations, 
particularly in relation to e-invoicing, and to evaluate the importance of the invoicing 
obligations  as  a  control  measure  for  the  national  administrations.  Thirdly,  the  study 
was to present recommendations for changes in the legislation in those areas where the 
Member States could adopt a more harmonised approach or where the legislation could 
be modernised. 

223 

Main organisations/experts consulted 

Tax consultants and VAT experts from the Member States. 

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Summary of advice received and used 

No potentially serious risks with irreversible consequences have been indicated. 

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The  advice  received  came  in  the  form  of  a  study  on  invoicing,  which  was  used  as  a 
basis for the public consultation. 

Member States were consulted in a Working Party No 1 meeting held on 25 September 
2008. VAT experts from the Member States commented on a selection of measures to 
be included in this proposal.  

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Means used to make the expert advice publicly available 

The  invoicing  study  was  published  on  the  Commission  website  and  a  selection  of 
recommendations was used for the public consultation. 

The invoicing study is available on   
http://ec.europa.eu/taxation_customs/common/publications/studies/index_en.htm 

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Impact assessment 

Article  237  of  the  VAT  Directive  requires  the  Commission  to  present  a  report  by 
31 December 2008 at the latest and, if appropriate, a proposal amending the conditions 
for  e-invoicing  to  reflect  technological  developments  in  the  field.  While  no 
technological developments intrinsically require the Commission to present a proposal, 
the  most  appropriate  option  to  remove  the  obstacles  to  e-invoicing  is  an  amending 
Directive since the obstacles themselves are contained in the VAT Directive. 

Other policy goals of reducing burdens on business and helping SMEs equally can only 
be achieved by changing the rules set out in the VAT Directive. 

Whilst  a  full  impact  assessment  has  not  been  possible,  bearing  in  mind  the  deadline 
contained  in  the  VAT  Directive,  many  of  the  features  of  an  impact  assessment  are 
nevertheless contained in the proposal and accompanying communication. 

in 

The measurement exercise under the Action Programme for Reducing Administrative 
Burdens 
(http://ec.europa.eu/enterprise/admin-burdens-
reduction/action_program_en.htm),  using  the  EU  standard  cost  model,  estimates  the 
maximum mid-term reduction potential in removing the VAT obstacles to e-invoicing 
as up to EUR 18 billion if all invoices were sent electronically. A more conservative 

EU 

the 

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approach to the cost difference between paper and e-invoices, taking into account the 
number  of  VAT  invoices  required  to  be  issued  and  the  actual  rate  of  up-take  of  e-
invoicing experienced in Member States that already have a similar treatment between 
paper  and  e-invoices,  would  result  in  businesses  experiencing  a  lower,  but  still  very 
significant saving. 

LEGAL ELEMENTS OF THE PROPOSAL 

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Summary of the proposed action 

The proposed action is an amendment to the VAT Directive. The proposed legislative 
changes include the following measures. 

Chargeability to tax for intra-Community supplies 

This  proposal  complements  the  Commission  proposal  (COM(2008)  147)  on  the 
shortening  of  the  timeframe  for  recapitulative  statements  by  simplifying  the  rules  on 
the chargeability to tax for intra-Community supplies. The aim is to create a single date 
on  which  the  tax  becomes  chargeable,  that  of  the  date  of  the  chargeable  event  as 
determined by the time of the supply. By requiring the invoice to be issued by the 15th 
day  of  the  month  following  the  chargeable  event,  the  invoice  will  still  remain  the 
principle document evidencing the intra-Community supply.  

Furthermore,  the  date  of  the  chargeability  to  tax  for  intra-Community  acquisitions  is 
amended so as to correspond with the intra-Community supply. 

Right of deduction 

Two  measures  have  been  proposed  regarding  changes  to  the  rules  on  the  right  of 
deduction. 

Requirement to hold an invoice for deduction 

The proposal applies equal treatment between the requirements of the supplier to issue 
an  invoice  and  the  customer  to  hold  an  invoice  in  order  to  exercise  his  right  of 
deduction. The current rules lead to a disparity because in certain cases, such as reverse 
charge  transactions,  the  customer  is  not  obliged  to  hold  a  valid  invoice  in  order  to 
exercise  the  right  to  deduct.  However,  as  is  the  case  now,  the  proposal  still  allows 
Member  States  to  allow  a  right  of  deduction  subject  to  other  evidence  when  a  valid 
invoice is not available. 

Cash accounting 

Certain  Member  States  have  authorisation  for  a  derogation  in  respect  of  the  time  at 
which the right of deduction can be exercised for those taxable persons declaring the 
VAT  under  an  optional  cash  accounting  scheme  that  simplifies  the  tax  payment  for 
small  businesses.  This  derogation  delays  the  right  of  deduction  for  those  taxable 
persons  in  the  cash  accounting  scheme  until  the  payment  is  made  to  their  suppliers 
provided they are allowed to delay until receipt of payment the moment when the tax is 
due. 

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It  is  proposed  to  extend  this  optional  cash  accounting  simplification  measure  to  all 
Member  States.  The  scheme  should  be  available  to  all  micro  enterprises  having  an 
annual  turnover  that  does  not  exceed  EUR  2  million  as  defined  in  Commission 
Recommendation 2003/361/EC concerning the definition of micro, small and medium-
sized enterprises.  

In  addition,  where  the  supplier  only  accounts  for  VAT  on  receipt  of  payment,  a 
concession should be made for the recipient of those supplies to nevertheless claim an 
immediate right of deduction. This proposal creates a legal basis for Member States to 
further support businesses operating a cash accounting system. 

There is also an amendment to the details required on a full VAT invoice which will 
oblige the supplier to state the date of the chargeability to tax on the invoice. Currently 
without this requirement the recipient, in certain cases, is unable to know at what point 
the right of deduction can be exercised. 

Issuance of an invoice 

Member State where the rules are applicable 

There  is  some  ambiguity  at  present  regarding  in  which  Member  State  the  rules  on 
invoicing  are  applicable.  Whilst  it  is  generally understood  that the rules  on invoicing 
are  those  applicable  in  the  Member  State  where  the  tax  is  due  this  is  not  expressly 
stated. 

This  causes  certain  difficulties  for  businesses.  A  taxable  person  making  supplies  in 
which  the  tax  is  due  in  another  Member  State  would  have  to  meet  the  conditions  on 
invoicing in the other Member States and these rules may be different to the Member 
State where he is established.  

The  proposal  aims  to  resolve  the  problem  by  creating  a  set  of  harmonised  rules  for 
Business  to  Business  (B2B)  invoices  with  the  consequence  that  a  taxable  person 
issuing an  invoice from  where  he is  identified  for  VAT  will  have  legal  certainty  that 
the invoice is valid throughout the EU. This will also allow the rules to be applicable in 
the  Member  State  of  the  supplier  which  builds  on  the  One  Stop  Scheme  idea  of 
allowing  businesses  to  fulfil  their  obligations  from  the  Member  State  where  they  are 
established. 

In particular the proposal aims to harmonise the invoice rules where there is currently 
divergent treatment, namely exempt supplies, time limits for issuing invoices, summary 
invoices, self billing and outsourcing to third parties.  

For Business to Consumer (B2C) supplies the applicable rules will remain as the place 
of taxation but with greater harmonisation and transparency for business. By allowing 
Member  States  the  option  to  require  invoices  for  B2C  supplies,  which  must  be 
applicable  equally  to  established  and  non-established  businesses,  but  restricting  this 
option  to  simplified  invoices  only,  the  proposal  attempts  to  balance  the  needs  of 
Member States to control the tax, and the need to reduce administrative burdens.  

Transparency  for  business  can  be  achieved  by  requiring  Member  States  to  make 
available on a web site detailed information regarding invoicing rules for B2C supplies. 

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In fact the Commission proposal (COM(2004) 728 - Article 34f of the Regulation (EC) 
No  1798/2003))  already  foresees  this  for  the  "one  stop-scheme"  and  so  the  adopted 
"mini one stop-scheme" will require something similar. 

Contents of an invoice 

An invoice is generally required to be issued for VAT purposes to evidence the VAT 
due  to  be  paid  to  the  Treasury  and  to  allow  the  customer  to  exercise  a  right  of 
deduction.  The  importance  of  the  invoice  in  cases  where  a  right  to  deduct  can  be 
exercised is clearly greater than where only VAT is due from the supplier. 

With  this  in  mind  the  proposal  aims  to  create  a  two  tier  system  of  invoicing.  Firstly 
there is a full VAT invoice which is a compulsory invoice containing an extensive set 
of  details  for  B2B  supplies  when  there  is  the  likelihood  that  the  customer  will  be 
exercising a right to deduction, the supplier has a right of deduction at the preceding 
stage or for a cross border supply. Secondly, there is the option, or in certain cases the 
requirement, for a simplified invoice.  

Full VAT invoice 

Regarding  a  full  VAT  invoice  the  current  requirements  in  Article  226  of  the  VAT 
Directive are largely kept. There are three notable changes.  

The  first  change  regards  the  requirement  for  the  supplier  to  state  on  the  invoice  the 
customer's  VAT  identification  number.  This  will  provide  greater  assurance  to  the  tax 
authority  that  the  customer's  VAT  number  on  the  invoice  matches  that  in  which  the 
right  to  deduct  is  being  exercised.  It  also  ends  the  distinction  between  domestic 
invoices  and  those  invoices  in  relation  to  a  supply  to  a  customer  in  another  Member 
State.  Furthermore,  it  will  help  to  uniquely  identify  the  customer  when,  as  is  hoped, 
transmission of invoices by electronic means becomes more widespread. 

The second change is that the date of the supply of goods or services is replaced by the 
date the tax becomes chargeable. In this way the recipient of the supply knows in what 
period he can exercise his right of deduction. 

The third change relates to reverse charge supplies. Here the supplier, not liable for the 
payment of the VAT, may omit the VAT rate and the VAT amount payable from the 
full invoice when the supply takes place in another Member State. In many cases where 
the customer is in another Member State knowledge of the VAT rate may be difficult 
for the supplier. 

Simplified VAT invoice 

Member  States  have  the  option  to  require  a  taxable  person  to  issue  an  invoice  in  the 
case  of  B2C  supplies.  However,  in  these  cases  as  there  is  unlikely  to  be  a  VAT 
deduction only a simplified invoice can be required. 

For B2B supplies a business has the option to issue a simplified invoice for credit notes 
and domestic exempt supplies that do not allow the supplier a right of deduction at the 
preceding stage. Also, when the invoice amount is less than EUR 200 only a simplified 
invoice is required. As the VAT amount that could be deducted is small, the resulting 
risk to Member States' budgets is similarly small. The majority of Member States have, 

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in any case, already consulted the VAT Committee to make use of simplified invoicing 
for minor amounts. 

The  details  required  on  a  simplified  invoice  are  those  items  mentioned  currently  in 
Article 238 of the VAT Directive. The only addition is the requirement to include the 
value of the type of goods or services supplied. 

E-invoicing 

Allowed  by  the  various  options  available  to  them,  Member  States  have  implemented 
the rules on e-invoicing in a divergent way. This has created a disharmonised set of e-
invoicing rules that have been difficult for businesses to comply with, especially when 
sending cross border e-invoices.  

The  proposal  aims  to  end  any  legal  barriers  to  e-invoicing  contained  in  the  VAT 
Directive by treating the transmission of an invoice, whether by paper or by electronic 
means, equally. Thus, reference to the fact that the e-invoice should be by advance e-
signature or by EDI are removed.  

At the same time it is important that best practices develop so that standards, business 
requirements and all legal requirements converge towards a common approach. In this 
sense the VAT Directive can only play a part in helping to remove the obstacles that 
currently exist in terms of VAT legislation and here work of the Expert Group on E-
invoicing will be useful. 

Storage of invoices 

The proposal sets out a common EU time period of 6 years for which invoices must be 
stored.  This  allows  uniformity  for  the  exchange  of  invoices  between  Member  States 
and is generally in line with current storage periods in Member States. 

The  Member  State  in  which  the  rules  are  applicable  is  now  clearly  defined  in 
legislation by this proposal. In the case of the supplier the applicable rules are those of 
the Member State from where the supplier making the supply is established for VAT. 
In the case of the customer the rules applicable are those of the Member State where 
the customer belongs. 

Importantly as well businesses will be allowed to convert paper invoices into electronic 
form for storage purposes. 

310 

Legal basis 

Article 93 of the EC Treaty. 

329 

Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

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331 

332 

341 

342 

A  Directive  has  been  chosen  as  the  most  appropriate  and  simplest  measure,  as  the 
current rules to be simplified, modernised and harmonised are laid down in a Directive. 

The measures aim to reduce burdens on business, help SMEs and facilitate the use of e-
invoicing  and  as  such  should  have  a  positive  effect  overall  on  economic  operators 
while  leaving  Member  States  sufficient  means  to  inspect  taxes  effectively  and 
efficiently.  

Choice of instruments 

Proposed instruments: Directive. 

Other means would not be adequate for the following reason. 

The legislation being amended is a Directive and so no other legislative act would be 
suitable. 

BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

ADDITIONAL INFORMATION 

510 

511 

512 

513 

514 

550 

Simplification 

The  proposal  aims  to  simplify  the  legislation  and  the  administrative  procedures  for 
public authorities (EU and national), and for private parties. 

The proposal aims at removing legal barriers in the internal market for VAT invoices. 
This proposal contributes to the simplification strategy launched by the Commission in 
October  2005  (COM(2005)  535)  with  a  view  to  helping  businesses  to  be  more 
competitive.  The  simplified  measures  cover,  notably,  the  issue  of  an  invoice  created 
within a set of harmonised rules valid throughout  the EU, a simplified invoice in  the 
case of B2C supplies, the equal treatment of electronic and paper invoicing, a common 
EU time period for the storage of invoices and the withdrawal of the Member States' 
option to impose conditions on self-billed invoices. 

The  proposal  will  improve  the  quality  of  data  exchanged  between  Member  States  in 
relation to intra-Community supplies of goods. 

Setting harmonised rules at EU level gives businesses the legal certainty that an invoice 
compliant with the rules in one Member State will be compliant in all Member States. 
Currently, businesses may need to comply with up to 27 different rules on invoicing.  

Correlation table 

The  Member  States  are  required  to  communicate  to  the  Commission  the  text  of 
national  provisions  transposing  the  Directive  as  well  as  a  correlation  table  between 
those provisions and this Directive. 

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2009/0009 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2006/112/EC on the common system of value added tax as regards 
the rules on invoicing  

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 93 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Having regard to the opinion of the European Economic and Social Committee3, 

Whereas: 

(1) 

(2) 

(3) 

Council Directive 2006/112/EC of 28 November 2006 on the common system of value 
added  tax4  lays  down  conditions  and  rules  concerning  value  added  tax,  hereinafter 
"VAT", invoices to ensure the proper functioning of the internal market. In accordance 
with  Article  237  of  that  Directive,  the  Commission  has  presented  a  report  which 
identifies, in the light of technological developments, certain difficulties with regard to 
electronic invoicing and which, in addition, identifies certain other areas in which the 
VAT  rules  should  be  simplified  with  a  view  to  improving  the  functioning  of  the 
internal market. 

Since record keeping needs to be sufficient to allow Member States to control goods 
moving  temporarily  from one Member  State  to another, it should be made clear  that 
record  keeping  is  to  include  details  of  valuations  on  goods  moving  temporarily 
between  Member  States.  Also,  transfers  of  goods  for  valuation  purposes  to  another 
Member State should not be regarded as a supply of goods for VAT purposes. 

The rules concerning the chargeability of VAT on intra-Community supplies of goods 
should be simplified in order to ensure the uniformity of the information submitted in 
recapitulative statements and the timeliness of the exchange of information by means 
of  those  statements.  The  derogation  in  Article  67(2)  of  Directive  2006/112/EC 
allowing the invoice to create chargeability to tax should be removed; only the time of 
the  supply  should  cause  VAT  to  become  chargeable.  In  addition,  the  continuous 

1 
2 
3 
4 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ L 347, 11.12.2006, p. 1. 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

supply  of  goods  from  one  Member  State  to  another  over  a  period  of  more  than  one 
calendar  month  should  become  chargeable  at  the  end  of  each  calendar  month.  The 
rules concerning the chargeability of VAT on intra-Community acquisitions should be 
similarly changed.  

To help small and medium sized enterprises that encounter difficulties to pay the VAT 
to  the  competent  authority  before  they  have  received  payment  from  their  customers, 
Member States should have the option of allowing VAT to be accounted using a cash 
accounting scheme which allows the supplier to pay VAT to the competent authority 
when  he  receives  payment  for  a  supply  and  which  establishes  his  right  of  deduction 
when  he  pays  for  the  supply.  This  should  allow  Member  States  to  introduce  an 
optional  cash  accounting  scheme  that  does  not  have  a  negative  effect  on  cash  flow 
relating to their VAT receipts. 

A  valid  invoice  issued  in  accordance  with  Directive  2006/112/EC  is  an  important 
document  in  the  control  of  VAT,  particularly  with  regard  to  the  right  of  deduction. 
This is the case for all transactions irrespective of the person liable for payment of the 
tax. Rules should therefore be introduced to allow Member States the right to require a 
valid VAT invoice in all cases where there is a right of deduction. 

To  provide  legal  certainty  for  business  regarding  their  invoicing  obligations,  the 
Member  State  in  which  the  invoicing  rules  apply  should  be  clearly  stated.  The 
applicable  rules  should  be  those  of  the  Member  State  in  which  the  taxable  person 
making the supply is identified for VAT or is otherwise established.  

To  further  help  reduce  burdens  on  business  the  use  of  simplified  invoices  should  be 
extended  to  areas  in  which  the  tax  risk  is  minimal,  such  as  credit  notes,  low  value 
supplies and certain exempt supplies. 

Given  Member  States'  divergent  invoicing  rules  for  supplies  to  non-taxable  persons 
and  the  need  to  maintain  measures  to  control  fraud,  the  option  of  requiring  taxable 
persons  to  invoice  non-taxable  persons  should  be  maintained.  However,  in  order  to 
balance this against the need to reduce burdens on business, only a simplified invoice 
containing a minimum level of information should be required. 

In  order  to  harmonise  the  rules  on  invoicing  to  taxable  persons  or  non-taxable  legal 
persons, with a view to improving the functioning of the internal market, the relevant 
options  available  to  Member  States  should  be  abolished  or  replaced  by  harmonised 
rules. This should be the case with regard to exempt supplies, the time limit for issuing 
an invoice, summary invoices, self-billing and outsourcing to third parties outside the 
Community. 

(10)  The  requirements  concerning  the  information  to  be  provided  on  invoices  should  be 
amended  to  allow  better  control  of  the  tax,  to  create  equality  of  treatment  between 
cross-border and domestic supplies and to help promote e-invoicing. 

(11)  Since  the  use  of  e-invoicing  can  help  businesses  to  reduce  costs  and  be  more 
competitive,  it  is  essential  that  paper  invoices  and  e-invoices  are  treated  equally.  A 
technologically neutral approach can only be achieved by ensuring that no distinction 
is made between paper and electronic invoices on the basis of content, issue or storage. 

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(12)  Since  the  divergent  rules  of  the  Member  States  regarding  the  period  of  time  during 
which  invoices  must  be  stored,  the  medium  in  which  they  must  be  stored  and  their 
place  of  storage  create  significant  burdens  on  business,  a  common  storage  period 
should be established and it should be possible to store invoices in electronic form and 
to  store  them  outside  the  Member  State  in  which  the  taxable  person  is  established 
provided that those invoices can be made available without undue delay. It should also 
be provided that the rules which apply to the storage of invoices should be those of the 
Member State in which the taxable person is established. 

(13)  The  rules  on  the  access  to  invoices  by  the  competent  authority  for  control  purposes 
should be made clear so that when a taxable person stores on-line invoices which he 
has issued or received, the Member State in which the tax is due should have access to 
those invoices. 

(14)  Since  the  objectives  of  the  action  to  be  taken  regarding  the  simplification, 
modernisation  and  harmonisation  of  the  VAT  invoicing  rules  cannot  be  sufficiently 
achieved  by  the  Member  States  and  can  therefore  be  better  achieved  at  Community 
level,  the  Community  may  adopt  measures,  in  accordance  with  the  principle  of 
subsidiarity  as  set  out  in  Article 5  of  the  Treaty.  In  accordance  with  the  principle  of 
proportionality,  as  set  out  in  that  Article,  this  Directive  does  not  go  beyond  what  is 
necessary in order to achieve those objectives. 

(15)  Directive 2006/112/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 
Amendments to Directive 2006/112/EC 

Directive 2006/112/EC is amended as follows: 

(1) 

In Article 17(2), point (f) is replaced by the following: 

"(f) 

the  supply  of  a  service  performed  for  the  taxable  person  and  consisting  in 
valuations of, or work on, the goods in question physically carried out within 
the  territory  of the Member State in which dispatch or transport  of the goods 
ends, provided that the goods, after being valued or worked upon, are returned 
to  that  taxable  person  in  the  Member  State  from  which  they  were  initially 
dispatched or transported;" 

(2) 

In Article 64, paragraph 2 is replaced by the following: 

"2.  Continuous supplies of goods over a period of more than one calendar month, 
which are dispatched or transported to a Member State other than that in which the 
dispatch or transport of those goods begins and which are supplied VAT-exempt or 
which are transferred VAT-exempt to another Member State by a taxable person for 
the  purposes  of  his  business,  in  accordance  with  the  conditions  laid  down  in 
Article 138, shall be regarded as being completed on expiry of each calendar month 
until such time as the supply comes to an end. 

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Supplies of services for which VAT is payable by the customer pursuant to Article 
196, which are supplied continuously over a period of more than one year and which 
do  not  give  rise  to  statements  of  account  or  payments  during  that  period,  shall  be 
regarded as being completed on expiry of each calendar year until such time as the 
supply of services comes to an end. 

Member States may provide that, in certain cases other than those referred to in the 
first  and  second  subparagraphs,  the  continuous  supply  of  goods  or  services  over  a 
period of time is to be regarded as being completed at least at intervals of one year." 

(3) 

In Article 66, point (c) is replaced by the following: 

"(c)  where an invoice is not issued, or is issued late, no later than on the 15th day of 

the month following that in which the chargeable event occurs." 

(4) 

Article 67 is deleted. 

(5) 

In Chapter 2 of Title VI, the following Article 67a is inserted: 

"Article 67a 

Article 64(1), the third subparagraph of Article 64(2), Article 65 and Article 66 shall 
not apply where, in accordance with the conditions laid down in Article 138, goods 
dispatched  or  transported  to  a  Member  State  other  than  that  in  which  dispatch  or 
transport  of  the  goods  begins  are  supplied  VAT-exempt,  or  goods  are  transferred 
VAT-exempt  to  another  Member  State  by  a  taxable  person  for  the  purposes  of  his 
business."  

(6) 

In Article 68, the second paragraph is replaced by the following: 

"The  intra-Community  acquisition  of  goods  shall  be  regarded  as  being  made,  and 
VAT shall become chargeable, when the supply of similar goods is effected within 
the territory of the relevant Member State." 

(7) 

Article 69 is deleted. 

(8) 

The following Article 167a is inserted: 

"Article 167a 

1.  Where  the  deductible  tax  becomes  chargeable  upon  receipt  of  payment, 
Member States may provide that the right of deduction is to arise when the goods or 
services are supplied or at the time the invoice is issued. 

2.  Member  States  may  provide  within  an  optional  scheme  that  taxable  persons 
must,  when  the  following  conditions  are  met,  postpone  the  right  of  deduction  until 
the VAT has been paid to the supplier:  

(a) 

the taxable person accounts for the output VAT for his supplies only when he 
has actually received the payments from his customers;  

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(b) 

the annual turnover of the taxable person is no higher than EUR 2 000 000. 

Member  States  shall  inform  the  VAT  Committee  of  national  legislative  measures 
adopted pursuant to the first subparagraph." 

(9) 

Article 178 is amended as follows: 

(a)  Point (a) is replaced by the following: 

"(a)  for  the  purposes  of  deductions  pursuant  to  Article 168(a),  in  respect  of  the 
supply of goods or services, he must hold an invoice drawn up in accordance 
with Sections 3 to 6 of Chapter 3 of Title XI;" 

(b)  Point (c) is replaced by the following: 

"(c)  for  the  purposes  of  deductions  pursuant  to  Article 168(c),  in  respect  of  the 
intra-Community  acquisition  of  goods,  he  must  set  out  in  the  VAT  return 
provided for in Article 250 all the information needed for the amount of VAT 
due on his intra-Community acquisitions of goods to be calculated and he must 
hold an invoice drawn up in accordance with Sections 3, 4 and 5 of Chapter 3 
of Title XI;" 

(c)  Point (f) is replaced by the following: 

"(f)  when  required  to  pay  VAT  as  a  customer  where  Articles 194  to  197  or 
Article 199  apply,  he  must  hold  an  invoice  drawn  up  in  accordance  with 
Sections  3  to  6  of  Chapter  3  of  Title  XI  and  he  must  comply  with  the 
formalities as laid down by each Member State." 

(10)  Article 180 is replaced by the following: 

"Article 180 

Member States may authorise a taxable person to make a deduction which he has not 
made in accordance with Articles 178 and 179. 

The  Member  States  shall  determine  the  conditions  and  rules  under  which  such 
authorisation is granted." 

(11)  Articles 181 and 182 are deleted. 

(12) 

In Article 197(1), point (c) is replaced by the following: 

"(c) 

the invoice issued by the taxable person not established in the Member State of 
the  person  to  whom  the  goods  are  supplied  is  drawn  up  in  accordance  with 
Sections 3, 4 and 5 of Chapter 3." 

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(13)  The following Article 218a is inserted: 

"Article 218a 

Member  States  may  not  impose  on  taxable  persons  any  obligations  or  formalities, 
other than those laid down in this Chapter and Chapter 4, in relation to the issue or 
storage  of  invoices,  irrespective  of  whether  the  invoices  are  sent  or  made  available 
by electronic means or sent on paper."  

(14) 

In Section 3 of Chapter 3 of Title XI, the following Article 219a is inserted: 

"Article 219a 

1. 
The  issue  of  an  invoice  shall  be  subject  to  the  rules  applying  in  the  Member 
State which issued the taxable person concerned with the VAT identification number 
under which he made the supply. 

If  no  such  number  exists,  the  rules  shall  be  those  applying  in  the  Member  State  in 
which  the  supplier  has  established  his  business  or  has  a  fixed  establishment  from 
which  the  supply  is  made  or,  in  the  absence  of  such  a  place  of  business  or  fixed 
establishment,  in  which  he  has  his  permanent  address  or  usually  resides  or  is 
otherwise required to be identified for VAT purposes.  

2.  Where  a  customer  receiving  a  supply  of  goods  or  services  is  established  in  a 
Member State other than the Member State from which the supply was made and the 
customer is liable for the payment of VAT, the issue of invoice shall be subject to the 
rules  applying  in  the  Member  State  which  issued  the  VAT  identification  number 
under which the customer received the supply." 

(15)  Article 220 is amended as follows: 

(a)  Point (2) is deleted; 

(b)  Point (4) is replaced by the following: 

"(4)  any payment on account made to him before the supply of goods referred to in 

point (1) was carried out or completed;" 

(16)  The following Article 220a is inserted: 

"Article 220a 

Member States shall allow the taxable person to issue a simplified invoice in any of 
the following cases: 

(a)  where  the  taxable  amount  of  the  supply  of  goods  or  services  is  less  than 

EUR 200; 

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(b)  where  the  invoice  issued  is  a  document  or  message  treated  as  an  invoice 

pursuant to Article 219; 

(c)  where  the  supply  of  goods  or  services  is  exempt  without  deductibility  of  the 
VAT paid at the preceding stage, and the taxable person required to ensure that 
an  invoice  is  issued  is  identified  for  VAT  in  the  same  Member  State  as  the 
place of taxation. 

Point (c) of the first paragraph shall not apply where the supply of goods concerned 
is also exempt pursuant to Article 138." 

(17)  Articles 221, 222 and 223 are replaced by the following: 

"Article 221 

Member  States  may  impose  on  taxable  persons  an  obligation  to  issue  a  simplified 
invoice  in  respect  of  supplies  of  goods  or  services  other  than  those  referred  to  in 
Article 220  where  the  place  of  supply  of  those  goods  or  services  is  within  their 
territory.  

Article 222 

An invoice must be issued no later than on the 15th day of the month following that 
in which the chargeable event occurs. 

Article 223 

Member States shall allow the taxable person to issue a summary invoice that details 
several separate supplies of goods or services provided that the supplies mentioned in 
that summary invoice become chargeable for VAT during the same calendar month."  

(18)  Articles 224 and 225 are deleted. 

(19)  Article 226 is amended as follows: 

(a)  Point (4) is replaced by the following: 

"(4)  the customer's VAT identification number as referred to in Article 214;" 

(b)  Point (7) is replaced by the following: 

"(7)  the date on which VAT becomes chargeable, in so far as that date differs from 
the  date  of  issue  of  the  invoice,  or,  if  the  date  on  which  VAT  becomes 
chargeable is not known, a reference to the chargeable event concerned;" 

(c)  The following point (7a) is inserted: 

"(7a) where the VAT becomes chargeable on receipt of payment, the date on which 
the  goods  or  services  are  supplied  if  the  date  of  supply  precedes  the  date  of 
payment;"  

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(d)  The following point (10a) is inserted: 

"(10a)  where  the  customer  receiving  a  supply  issues  the  invoice  instead  of  the 

supplier, the words "self-billed invoice";" 

(e)  Point (11) is replaced by the following: 

"(11) in the case of an exemption, the mention "EX";"  

(f)  The following point (11a) is inserted: 

"(11a) where the customer is liable for the payment of the VAT, the mention "RC";"  

(g)  Point (13) is replaced by the following: 

"(13) where the margin scheme for travel agents is applied, reference to Article 306;" 

(h)  Point (14) is replaced by the following: 

"(14) where one of the special arrangements applicable to second-hand goods, works 
of art, collectors' items and antiques is applied, reference to Articles 313, 326 
or 323 as applicable;" 

(20)  The following Articles 226a and 226b are inserted: 

"Article 226a 

Where the invoice is issued by the taxable person making the supply to a customer 
who is liable for payment of VAT, the taxable person may omit the details referred to 
in  points (8),  (9)  and  (10)  of  Article 226  and  instead  indicate,  by  reference  to  the 
quantity  or  extent  of  the  goods  or  services  supplied  and  their  nature,  the  value  of 
those goods or services.  

Article 226b 

Only  the  following  details  are  required  on  simplified  invoices  issued  pursuant  to 
Articles 220a and 221: 

(a) 

the date of issue; 

(b) 

identification of the taxable person making the supply;  

(c) 

identification of the type of goods or services supplied and their value; 

(d) 

the  VAT  amount  payable  or  to  be  credited,  or  the  information  needed  to 
calculate it." 

(21)  Articles 227 and 228 are deleted. 

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(22)  Article 230 is replaced by the following: 

"Article 230 

The  amounts  which  appear  on  the  invoice  may  be  expressed  in  any  currency, 
provided  that  the  amount  of  VAT  payable  or  to  be  credited  is  expressed  in  the 
national currency of the Member State in which the supply of goods or services takes 
place, using the exchange rate published by the European Central Bank for the day 
on which the tax becomes chargeable, or, if there is no publication on that day, the 
previous day of publication." 

(23)  Article 231 is deleted. 

(24)  Article 232 is amended as follows: 

"Article 232 

Invoices issued pursuant to Section 2 may be sent on paper or they may be sent or 
made available by electronic means." 

(25)  Articles 233, 234, 235 and 237 are deleted. 

(26)  Article 238 is amended as follows: 

(a) 

Paragraph 1 is replaced by the following: 

"1.  After consulting the VAT Committee, Member States may, in accordance with 
conditions  which  they  may  lay  down,  provide  that  in  the  following  cases  only  the 
information  required  under  Article 226b  need  be  entered  on  invoices  in  respect  of 
supplies of goods or services in their territory: 

(a)  where  the  amount  of  the  invoice  is  above  EUR 200  but  not  higher  than  EUR 

400; 

(b)  where commercial or administrative practice in the business sector concerned 
or  the  technical  conditions  under  which  the  invoices  are  issued  make  it 
particularly  difficult  to  comply  with  all  the  obligations  referred  to  in 
Article 226." 

(b) 

Paragraph 2 is deleted; 

(c) 

Paragraph 3 is replaced by the following: 

"3.  The  simplified  arrangements  provided  for  in  paragraph 1  shall  not  be  applied 
when  invoices  must  be  issued  pursuant  to  point (3)  of  Article 220  or  when  the 
taxable  supply  of  goods  or  services  is  carried  out  by  a  taxable  person  who  is  not 
established in the Member State in which the VAT is due and the person liable for 
the payment of VAT is the person to whom the goods or services are supplied." 

(27)  Articles 239 and 240 are deleted. 

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(28)  Article 243 is replaced by the following: 

"Article 243 

1. 
Every  taxable  person  shall  keep  a  register  of  the  goods  dispatched  or 
transported, by that person or on his behalf, to a destination outside the territory of 
the  Member  State  of  departure  but  within  the  Community  for  the  purposes  of 
transactions  consisting  in  valuations  of  those  goods  or  work  on  them  or  their 
temporary use as referred to in points (f), (g) and (h) of Article 17(2). 

2. 
Every  taxable  person  shall  keep  accounts  in  sufficient  detail  to  enable  the 
identification  of  goods  dispatched  to  him  from  another  Member  State,  by  or  on 
behalf of a taxable person identified for VAT purposes in that other Member State, 
and  used  for  services  consisting  in  valuations  of  those  goods  or  work  on  those 
goods." 

(29)  Article 244 is replaced by the following: 

"Article 244 

Every taxable person required to ensure that an invoice is issued by himself or by his 
customer or, in his name and on his behalf, by a third party shall ensure that copies of 
these invoices are stored. 

Every taxable person receiving an invoice shall ensure that the invoice is stored. 

The storage of an invoice shall be subject to the rules applying in the Member State 
in which the taxable person has established his business or has a fixed establishment 
from or for which the supply is made or, in the absence of such a place of business or 
fixed  establishment,  in  which  he  has  his  permanent address or  usually  resides or is 
otherwise required to be identified for VAT purposes."  

(30) 

In Article 245(2), the second subparagraph is deleted. 

(31) 

In Article 246, the second paragraph is deleted. 

(32)  Article 247 is replaced by the following: 

"Article 247 

The taxable person shall ensure the storage of invoices for a period of six years." 

(33)  Article 248 is deleted. 

(34) 

In Section 3 of Chapter 4 of Title XI, the following Article 248a is inserted:  

"Article 248a 

For  control  purposes,  the  Member  States  in  which  the  tax  is  due  may  require 
particular invoices to be translated into their official languages."  

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(35)  Article 249 is replaced by the following: 

"Article 249 

For  control  purposes,  where  a  taxable  person  stores,  by  electronic  means 
guaranteeing  on-line  access  to  the  data  concerned,  invoices  which  he  issues  or 
receives,  the  competent  authorities  of  the  Member  State  in  which  he  is  established 
and, when the VAT is due in another Member State, the competent authorities of that 
Member State, shall have the right to access, download and use those invoices." 

(36) 

In Article 272(1), the second subparagraph is replaced by the following: 

"Member  States  may  not  release  the  taxable  persons  referred  to  in  point (b)  of  the 
first  subparagraph  from  the  invoicing  obligations  laid  down  in  Sections  3  to  6  of 
Chapter 3 and Section 3 of Chapter 4." 

Article 2 
Transposition 

1. 

Member States shall adopt and publish, by 31 December 2012 at the latest, the laws, 
regulations  and  administrative  provisions  necessary  to  comply  with  this  Directive. 
They  shall  forthwith  communicate  to  the  Commission  the  text  of  those  provisions 
and a correlation table between those provisions and this Directive. 

They shall apply those provisions from 1 January 2013. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 3 
Entry into Force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union.  

This Directive is addressed to the Member States. 

Article 4 
Addressees 

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Done at Brussels,  

For the Council 
The President 

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