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E-Billing ConferenceThe Challenge of Evolution28 February 2008

Panel discussionWith national authorities, the European Commission, DHL and PricewaterhouseCoopers

Moderator: Ine LejeunePwC

Implementing a project

1. A successful implementation of electronic invoicing and archiving in a global environment, is this utopia or reality?

What timescale should a business consider for such an implementation?

Is it realistic to go for a big bang approach or is it recommended to go for a phased approach?

VAT rules on electronic invoicing

2. Looking at the VAT rules on electronic invoicing, the main requirement is about guaranteeing authenticity of origin & integrity of content.

How is this (double) requirement implemented internationally?

Overview of legislation (EMEA)VAT rules on electronic invoicing

AT

BE

BG

CY

CZ

EE

HU

LV

LT

MT

NL

RO

CH

NO

PT

SI

SE

UK

1

2A

2B

DK

FI

FR

DE

EL

IE

I T

LU

PL

SK

ES

3

1. Acceptance of EDI to send e-invoices (green = yes / red = no)

2A. Acceptance of ‘advanced e-signatures’ to send e-invoices (green = yes)

2B. Obligation to use a qualified certificate and a secure signature-creation device (amber = yes / green = no)

3. Acceptance of ‘other electronic means’ to send e-invoices (green = yes / amber = not accepted)

Slide 4PricewaterhouseCoopersJanuary 2008

Update 1 January 2008 – PricewaterhouseCoopers (E-)Invoicing & (E-)Archiving Network

Overview of legislation (Americas)VAT rules on electronic invoicing

BR CA MX US

1

2A

2B

3

1. Acceptance of EDI to send e-invoices (green = yes)






Overview of legislation (AsiaPacific)VAT rules on electronic invoicing

AU CN IN JP SG

1

2A

2B

3

1. Acceptance of EDI to send e-invoices (green = yes)







3. For multinationals, to determine the compliance of a system involving the exchange of e-mails with attached pdf invoices is a nightmare.

Some organisations claim that it is paper-based invoicing, others say that it is non-compliant electronic invoicing, whereas a third category claims it is compliant e-invoicing.

Why are there so many different interpretations on this point, whilst no one may ever know how the invoice was originally sent once it is archived?

© 2008 PricewaterhouseCoopers28 February 2008

Accounts payable

VAT rules on electronic invoicingOverview of legislation (EMEA)

AT

BE

BG

CY

EL

MT

RO

UK

CH

NO

unknown

CZ

DK

EE

FI

FR

DE

HU

IE

IT

LV

LT

LU

NL

PL

PT

SK

SI

ES

SE

1

1. Is sending an invoice as a pdf attachment to e-mails without electronic signature seen as (non-compliant) e-invoicing (green), paper invoicing (amber) or as no invoicing at all (red)

Update to 1 January 2008 – PricewaterhouseCoopers (E-)Invoicing & (E-)Archiving Network


4. Are there different rules for electronically invoicing intercompany (i.e. within the group)?

What when invoices are issued between the members of a VAT group?


5. How, in practice, do authorities determine whether an e-invoicing system or an e-archiving system meets this VAT requirement?


VAT rules on electronic invoicingBrazilian “SPED” system

e-Invoice

e-Fiscal Bookkeeping

e-Accounting Bookkeeping

e-bill of transport

e-Financial Bookkeeping

e-General Ledger

e-Taxable Income Book

e-Tax books

e-Service Invoice

Digital Tax Bookkeeping

e-FD

Digital Accounting

Bookkeeping e-CD

Electronic Invoice e-NF

Electronic Invoice (e-NF)

Tax support to a commercial transaction (goods or services)

Legal document with digital signatures (drawer/receivers/fiscal agency) prior to the taxable event

Eliminate paper invoice

Reduce regulatory demands

Real time Tax inspection


Slide 12© 2008 PricewaterhouseCoopers28 February 2008


Pará

SãoPaulo

MinasGerais

Rio deJaneiro

Rio G.Sul

Layout Database

Java Program

Text File

Internet

SPEDSPED RIS

MONTHLY

Legal Representative

. Import

. Type

. Validate

. Sign

. Visualize

. Transfer

. Original File

. Database

. Download

ReceptionValidation

Electronic Power of Attorney

Tax Authorities (BR States)Taxpayers

BR IRS



6. Is there a need for pre-approval of such a system by the competent authorities?

In addition, is it an appropriate way of safeguarding the compliance of your system as a company?


7. Cross-border invoicing always seems to be a major issue.

Therefore, can the panel clarify, in the case of electronic cross-border invoicing, what country’s rules a supplier needs to comply with if the rules differ between the two countries?


8. As regards the countries that require or stimulate the use of paper summary documents in case of e-invoicing methods without electronic signatures, is there a real need for having this document and should there not be an evolution towards abolishing this requirement, as the Netherlands have already done?


VAT rules on electronic invoicingOverview of legislation (EMEA)

AT

BE

BG

CY

CZ

EE

HU

LV

LT

MT

NL

RO

CH

NO

PT

SI

SE

UK

1

DK

FI

FR

DE

EL

IE

I T

LU

PL

SK

ES

1. Obligation to issue (paper) recapitulative statements (amber = yes / green = no)



VAT rules on electronic invoicingOverview of legislation (Americas)

BR CA MX US

1




VAT rules on electronic invoicingOverview of legislation (Asiapacific)

AU CN IN JP SG

1




9. When using electronic signatures to sign electronic invoices, can the countries present indicate whether there is a need to use signatures issued by a recognised company – whether or not established within their territory – and, if so, why this is a requirement?


10. Is it, in practice, an issue if a company issues one and the same invoice in two formats, i.e. paper-based and electronic?

If so, does this issue also exist in case of error handling (when e-invoices fail to reach the customer) or during a test phase?


11. Can the European Commission explain how, in theory, a company can get a refund of foreign VAT as provided for in the 8th/13th EC Directive (i.e. as a non-registered entity in another Member State) on the basis of an electronic invoice?

12. Can some of the countries present explain how this works in practice?

If a similar system exists in the non-EU Member States present, can they also comment, please?

Adoption of electronic invoicing

13.What is the best way in convincing SMEs to send or receive their invoices electronically?

What stops companies not doing so massively?

Adoption of electronic invoicing

14. Is the format in which the electronic invoice is transmitted relevant in view of a higher adoption rate?

Is there a role to play for the Single Euro Payments Area (SEPA) in this respect?

Third Party Service Providers (Outsourcers)

15.What are the key considerations in deciding to go for a third-party provider or to develop/use an in-house solution?

When going for a third-party provider, how do you select the right one or do you need to select more than one?


16.Does a company, as a user of such providers, need to have an outsourcing agreement in place for VAT?

Where such an agreement is in place, would it still be required to have - in addition - an acceptance procedure in place between each supplier and customer to accept electronic invoices?


17.What is the current status on interconnections between third-party providers?

Is this concept VAT compliant?

Are there any risks for its users?


18. In order to be VAT compliant when digitising paper-based purchase invoices through scanning, must companies call on a third-party provider or can they also use an in-house scanning solution?

VAT rules on (electronic) archiving

19.There are still countries where paper-based invoices need to be archived in the country where the business is established.

What is keeping the authorities in those countries from authorising that such invoices may be archived abroad (at a central location for the group) provided that the information can be made available from the ERP systems or from the invoices itself without undue delay at the time of any VAT audit?

What brings the future?

20. Is it likely that electronic invoicing will become mandatory in the (near) future?

Is it beneficial for companies to start invoicing electronically from a VAT audit perspective?

In other words, will there be another approach towards auditing 100% digitised companies?


21.Are the current rules sufficiently adapted to future technologies?

In other words, considering the report of the Commission that is due before the end of 2008, is it likely that the rules will need to change in order to deal with future technologies?

How will the potential impact on businesses already invoicing electronically in a VAT compliant way today be observed?


22.Besides evolution in technology, considering the issues some businesses are still facing under the current VAT rules, are any changes to the Directive to be expected/needed or can the remaining issues be resolved in another manner?


23.How does the panel feel about opportunities as the one today where concerns, ideas and views can be shared among direct participants as well as with other stakeholders?

Is there a need to have this on a more regular basis?

Remaining questions?

Thank you

© 2008 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US).

PwC

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