COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement
Date: 2013-06-26
Institutions: European Commission
Subjects: administrative formalities, electronic government, invoicing, principle of legal certainty, public contract, single market

EUROPEAN 
COMMISSION 

Brussels, 26.6.2013  
SWD(2013) 223 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a Directive of the European Parliament and of the Council 

on electronic invoicing in public procurement 

{COM(2013) 449 final} 
{SWD(2013) 222 final} 
{SWD(2013) 225 final} 

EN 

   EN 

 
 
 
 
  
 
TABLE OF CONTENTS 

Introduction ................................................................................................................................ 3 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Procedural issues and consultation of interested parties .............................................. 3 

Policy context, problem definition and Subsidiarity.................................................... 3 

Objectives of the initiative ........................................................................................... 4 

Policy options............................................................................................................... 5 

Assessment of Impacts................................................................................................. 6 

Comparison of options ................................................................................................. 8 

Monitoring and evaluation ........................................................................................... 9 

2 

 
 
 
INTRODUCTION 

The  current  impact  assessment  looks  at  the  effects  of  a  possible  EU  initiative  which  would 
enhance  e-invoicing  interoperability  in  public  procurement  across  the  European  Union,  in 
order to eliminate the fragmentation of the Internal Market.  

1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

Action  on  promoting  the  uptake  of  e-invoicing  in  public  procurement  is  seen  by  the 
Commission as a priority for the near future. This is reflected in the inclusion of a key action 
on e-invoicing in public procurement in the Single Market Act II.  

This  Impact  Assessment  builds  on  the  analysis  of  external  research,  consultations  with 
stakeholders, and an on-line survey which gathered over 700 replies. 

2. 

POLICY CONTEXT, PROBLEM DEFINITION AND SUBSIDIARITY 

This  initiative  only  concerns  public  procurement  covered  by  Directives  2004/17/EC, 
2004/18/EC and 2009/81/EC.  

2.1. 

Problem definition 

The existence of multiple non-interoperable e-invoicing standards across the EU is the main 
problem  driver  with  regards  to  the  exchange  of  invoices  in  public  procurement.  The  above 
problem driver is placed in a broader context, where despite efforts to stimulate the use of e-
invoicing and the broad acknowledgment of its many benefits, the public sector across the EU 
has  been  quite  unresponsive.  The  Member  States  which  made  the  decision  to  facilitate  or 
mandate the use of e-invoicing, frequently came up with their own technical solutions, based 
on  a  separate  national  standard  -  this  only  aggravates  the  interoperability  problem,  as  even 
more new standards appear on the market. 

2.1.1.  Problem (P1) – excessive complexity and legal uncertainty for firms 

The existence of many different e-invoicing requirements and standards across the EU results 
in an excessive level of complexity and legal uncertainty for firms when issuing invoices to 
another  Member  State.  The  complex  situation  on  the  EU  e-invoicing  market  is  seen  by 
suppliers as burdensome and presents a risk of non-acceptance of e-invoices in other Member 
States.  

2.1.2.  Problem (P2) – higher costs for firms 

Since  the  multiple  e-invoicing  requirements,  standards,  solutions,  and  networks/platforms 
which exist across the EU are not interoperable, and as no common standard is available on 
the  market,  firms  which  want  to  carry  out  cross-border  procurement  activities  are  often 
required  to  support  a  new  standard  each  time  they  access  a  new  market.  This  increases  the 
costs, irrespective of whether the invoices are submitted directly or through service providers. 
These higher operating costs for firms also have a negative effect on buyers, as higher prices 
need to be charged for their products or services. 

3 

 
 
 
2.1.3.  Consequences 

The  excessive  complexity/legal  uncertainty  and  higher  operating  costs  for  enterprises  can 
constitute market access barriers in cross-border public procurement. Where it does take place 
in  the  EU,  e-invoicing  is  for  the  most  part  limited  to  separate  –  often  national  –  networks, 
creating 'islands of e-invoicing' in the Internal Market. These problems might also deter firms 
from bidding in public procurement in other Member States, meaning that enterprises would 
pass  up  on  potential  business  opportunities  due  to  specific  e-invoicing  requirements  which 
they cannot support or which they judge too expensive. Finally, the domination of national e-
invoicing  regimes  means  lower  cross  border  bidding,  fewer  participating  companies,  and 
therefore  lower  competition,  which  in  turn  translates  into  an  inefficient  functioning  of  the 
Internal Market. 

2.2. 

Baseline scenario 

In  undertaking  no  new  EU  action,  the  adoption  of  e-invoicing  in  public  procurement  in  the 
EU  would  continue  at  a  slow  and  steady  pace,  with  more  and  more  national  standards 
appearing on the market. There is no guarantee that Member States will opt for interoperable 
solutions  –  recent  experience  suggests  the  contrary.  As  such,  e-invoicing  in  public 
procurement in the EU risks becoming increasingly complex and costly, as buyers, suppliers, 
and service providers would have to cater for a growing number of national requirements and 
standards. Market access barriers would not only continue to exist but could even increase. 

2.3. 

Legal basis and subsidiarity 

The EU’s right to take action to ensure the functioning of Internal Market stems from Article 
114 of the Treaty on the Functioning of the European Union (TFEU).  

The  EU  action  in  the  area  of  e-invoicing  in  public  procurement  is  justified  on  grounds  of 
subsidiarity.  Actions  undertaken  by  Members  States  have  aggravated  the  interoperability 
problem,  as  more  e-invoicing  standards  have  emerged  on  the  market  (generating  further 
interoperability costs and complexity).  

Given the cross-border interest of public procurement transactions covered by the Directives 
and the on-going national initiatives introducing e-invoicing in this sector, an EU action on e-
invoicing  in  public  procurement  would  be  the  most  appropriate  method  to  improve 
interoperability and prevent further fragmentation of the Internal Market. This cannot be done 
by  Member  States  on  their  own  as  such  actions  would  not  guarantee  interoperability  for 
economic operators nor eliminate market access barriers.  

3. 

OBJECTIVES OF THE INITIATIVE 

3.1. 

General objectives 

The  primary  objective  of  this  initiative  would  be  to  improve  the  functioning  of  the  Internal 
Market  by  introducing  mechanisms  that  would  diminish  market  access  barriers  in  cross-
border public procurement, generated by insufficient interoperability of e-invoicing standards. 

4 

 
 
 
3.2. 

Specific objectives 

The specific objectives contributing to the achievement of the general objective would be the 
following: 

(1) 

(2) 

Reduce  complexity  and  improve  clarity  and  legal  certainty  for  economic 
operators, by enabling them to send invoices in standards with which they are 
familiar and which will be widely accepted; 

Lower  operating  costs  for  economic  operators  participating  in  cross-border 
public procurement, such as cost of supporting multiple e-invoicing standards 
and systems. 

3.3. 

Operational objectives 

The following operational objective has been identified:  

•  Create conditions for the emergence of (a) technical solution(s) for e-invoicing in 
public  procurement  which  would  ensure  cross-border  interoperability  –  in  other 
words,  create  conditions  in  which  communication  and  mapping  between  e-
invoicing  systems  will  be  less  resource  intensive,  allowing  buyers  and  sellers  to 
exchange  invoices  in  public  procurement  at  the  lowest  cost  and  with  minimal 
complexity. 

4. 

POLICY OPTIONS 

A new European 
standard is proposed 
to the market 

Member States must 
accept invoices 
compliant with the 
new European 
standard 

Only the new 
European standard is 
allowed 

Option (1): No new 
EU action 

Option (2): Free-
choice approach 

Option (3): Selective 
conversion to e-
invoicing 

Option (4): 
Obligatory 
acceptance 

Option (5): Full 
harmonisation 

NO 

YES 

YES 

YES 

YES 

NO 

NO 

NO 

NO 

YES 

NO 

NO 

NO/YES 
(YES - only if a Member 
State or a contracting 
authority mandates the 
use of e-invoicing) 

YES 

YES 

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5. 

ASSESSMENT OF IMPACTS 

The  removal  of  market  access  barriers  in  e-invoicing  would  generate  mainly  economic 
impacts,  both  in  terms  of  costs  and  benefits,  with  the  latter  being  more  significant.  The 
primary  impacts  would  be  supplemented  by  additional  ‘secondary’  impacts,  as  improved 
interoperability  would  most  probably  translate  into  increased  uptake  of  e-invoicing.  These 
would be economic, social, and environmental in nature. 

5.1. 

Primary impacts 

The  scale  of  these  impacts  would  depend  on  the  Option  chosen  -  the  more  users  align  to  a 
single solution, the fewer market access barriers would remain. 

The  establishment  of  a  common  standard  would  solve  the  interoperability  problem  for  all 
firms dealing with contracting authorities which adhere to the new rules. The availability of 
one  interoperable  and  commonly  acceptable  European  standard  would  attenuate  the 
complexity  of  doing  business  abroad  and  provide  more  legal  certainty  for  enterprises.  It 
would  also  reduce  the  costs  resulting  from  the  need  to  support  many  different  e-invoicing 
standards. Further potential savings for firms may come from some adaptations of the pricing 
schemes and market structures for e-invoicing transmission. 

Any measure requiring the use of a new European e-invoicing standard would generate some 
implementation  costs  for  firms,  contacting  authorities  and  Member  States.  However,  these 
costs would be outweighed by the expected benefits, i.e. operational savings from e-invoicing, 
lower prices in public procurement due to enhanced competition.  

5.2. 

Secondary impacts 

The  adoption  of  the  new  European  e-invoicing  standard  may  generate  secondary  impacts 
through the increased uptake of e-invoicing in public procurement. This increase in the use of 
e-invoicing would be the source of certain economic, social, and environmental impacts. 

5.2.1.  Economic, environmental, and social impacts 

The economic impacts of increased uptake of e-invoicing would be linked to savings to the 
economy generated by the expected savings in the public procurement cycle (i.e. reduction of 
operating  costs  for  buyers  and  sellers,  increased  transparency,  faster  payment  processing 
times).The social impacts are expected to be neutral. The environmental impacts are expected 
to  be  positive  –  they  would  above  all  translate  into  a  reduced  use  of  paper  and  lower  CO2 
emissions. 

5.2.2.  Reduction of administrative burden 

The availability of invoice data electronically would simplify auditing and tax collection by 
the Member States’ tax authorities, as well as the preparation of any reports which need to be 
provided by the company. This would in turn reduce the administrative burden on enterprises. 
Due  to  the  fact  that  such  administrative  requirements  weigh  more  heavily  on  smaller 
enterprises, this reduction would be particularly beneficial to SMEs.  

6 

 
 
5.3. 

Impacts of the different options 

5.3.1.  Option (1) – No new EU action 

This option is described under the baseline scenario. 

5.3.2.  Option (2) – Free-choice approach 

A  new  European  e-invoicing  standard  would  be  developed  and  recommended  for  use  in 
public procurement, but the acceptance of e-invoices in the European standard would remain 
at  the  discretion  of  each  Member  State  and/or  contracting  authority.  Market  access  barriers 
would remain. The cost burden on enterprises would not decrease, as they would be forced to 
maintain numerous e-invoicing standards at the same time. Should they choose not to do so, 
potential business opportunities would be foregone. 

The  objective  of  this  initiative  would  not  be  achieved,  as  interoperability  would  remain 
problematic. Secondary impacts would be observed only to the extent to which a switchover 
to e-invoicing occurs, but due to the voluntary nature of this Option, the scale of this process 
is difficult to predict. 

5.3.3.  Option (3) - Selective conversion to e-invoicing 

Member  States  which  mandate  e-invoicing  in  public  procurement  on  their  own  initiative 
would  be  required  to  accept  electronic  invoices  in  the  new  European  standard.  This  would 
lower  the  costs  and  complexity  of  e-invoicing  for  enterprises,  which  would  now  be  able  to 
send electronic invoices in a single standard to any contracting authority which mandates e-
invoicing.  Interoperability  would  be  facilitated,  but  might  not  be  ensured  in  the  Member 
States where the introduction of mandatory e-invoicing is required de facto, but is not legally 
mandated (de jure). Legal uncertainty for firms may continue. 

Member  States  would  be  treated  unequally:  those  which  already  use  e-invoicing  in  public 
procurement would be have to adapt to the new standard, while those which do not would not 
be obliged to switch and could even be discouraged from doing so quickly. 

The secondary impacts are difficult to predict. It might take a very long time for all Member 
States  do  move  to  e-invoicing  in  public  procurement.  The  potential  benefits  of  greater  cost 
efficiency  and  savings  from  increased  competition  in  public  procurement  would  not 
materialise or would do so only very slowly. 

5.3.4.  Option (4) – Obligatory acceptance 

A  new,  common  European  standard  would  be  developed  and  made  available  for  use  by  all 
market operators. Acceptance by all contracting authorities of e-invoices compliant with this 
standard  would  be  required  in  public  procurement,  without  replacing  existing  technical 
solutions.  

The  operational  objective  would  be  met  rapidly:  the  requirement  to  accept  e-invoices 
compliant  with  the  European  standard  would  effectively  ensure  interoperability  and  hence 
remove market access barriers as of the day when the provisions enter into force. It may also 
provide  a  ready-made  solution  and  guidance  for  those  Member  States  which  have  not  yet 
implemented e-invoicing. 

7 

 
 
For enterprises, this option would create the certainty that any efforts and expenditures will be 
amortised  within  a  fairly  short  period  of  time.  The  knowledge  that  an  investment  into  one 
single  solution  will  allow  the  sending  of  e-invoices  to  any  contracting  authority  in  any 
Member State should prove to be a convincing factor for to switch over to e-invoicing. 

Secondary impacts would be observed only to the extent to which a switchover to e-invoicing 
occurs.  As  the  availability  of  a  common  standard  should  encourage  more  market  players  to 
make  this decision, the scale of this  process  should be more  significant  that in the previous 
Options.  

5.3.5.  Option (5) – Full harmonisation 

Invoices in currently existing standards would no longer be permitted. Although this approach 
would  fully  harmonise  e-invoicing  within  the  EU,  any  investments  made  in  the  Member 
States which already have developed national e-invoicing systems would have been wasted. 
This approach would also be highly disruptive and costly for service providers, as they would 
have to entirely redesign their systems. Finally, it would meet strong political opposition from 
Member States which already have e-invoicing systems in place. 

6. 

COMPARISON OF OPTIONS 

An analysis of the different options provided the following results: 

Objective - improve/facilitate e-invoicing interoperability in 
public procurement  

EFFECTIVENESS 

EFFICIENCY 

COHERENCE1 

Policy options  

Option (1): No new EU 
action  

Option (2): Free-choice 
approach 

Option (3): Selective 
conversion to e-invoicing 

Option (4): Obligatory 
acceptance  

Option (5): Full 
harmonisation 

0 

(+ / ?) 

(+) 

(+ +) 

(+ +) 

0 

(≈) 

(+) 

(+) 

(- -) 

0 

(?) 

(- / ?) 

(+ / ?) 

(≈) 

Magnitude  of  impact  as  compared  with  the  baseline  scenario  (the  baseline  is  indicated  as  0):  ++  strongly 
positive; + positive; – – strongly negative; – negative; ≈ marginal/neutral; ? uncertain; n.a. not applicable 

Option (4) appears to be the most appropriate choice: 

1 

Coherence is evaluated by taking into account also the secondary impacts (i.e. impacts generated by the 
increased  uptake  of  e-invoicing)  and  the  extent  to  which  the  Options  are  coherent  with  other  EU 
policies (especially the e-procurement initiative and the objectives of the late payment Directive). 

8 

 
 
 
                                                 
• 

• 

• 

• 

It  would  overcome  the  current  fragmentation  and  ensure  the  proper 
functioning of the Internal Market. 

As  the  transition  to  e-invoicing  would  occur  on  a  firm’s  initiative,  it  would 
not generate unnecessary costs. This would also respect the subsidiarity and 
proportionality principles.  

By  inducing  a  broader  transition  to  e-invoicing,  it  would  capture  the  full 
efficiency gains and economic savings offered by e-invoicing. 

By  allowing  firms  and  contracting  authorities  to  continue  to  use  existing 
national  invoicing  systems,  it  would  reduce  the  cost  and  disruption  of  the 
transition for both groups.  

A deadline of 2017 or 2018 is proposed for the move to mandatory acceptance of e-invoices 
compliant with the new European standard. This timeframe reflect the wish of stakeholders to 
move forward quickly and is consistent with the expected date of the launch of mandatory e-
procurement contained in the draft revised public procurement directives. 

7. 

MONITORING AND EVALUATION 

To avoid any additional (administrative) burden on contracting authorities, firms, or Member 
States  due  to  the  collection  of  information  used  for  monitoring,  the  proposed  indicators 
mainly  rely  on  existing  data  sources  (e.g.  OJ/TED,  Eurostat)  or  data  already  collected  by 
stakeholders  (e.g.  e-invoicing  service  providers)  in  their  business  activities.  However,  there 
are some data gaps which will require additional research (targeted studies and surveys), to be 
carried out by DG MARKT. 

9