On 23 September 2011, the draft bill that includes simplified rules for e-invoicing as foreseen in the EU VAT Directive 2010/45/EU of 13 July 2010 was approved by the German Parliament after the draft bill was surprisingly suspended in July 2011.
Once the law becomes effective (after it is signed by the Federal President), the new rules will apply retroactively as from 1 July 2011.
The rules aim to create a simplified option for the electronic transmission of invoices, in addition to the existing electronic signature and EDI processes. In the past, Germany adopted high security standards that have created an obstacle for businesses to introduce e-invoicing.
All transmission methods (e.g. e-mail, PDF files, etc.) are allowed under the new rules provided the following requirements are met (for both hard copy and electronic invoices) during the 10-year required storage period:
- The origin of the invoice is authenticated, i.e. the identity of the billing party is guaranteed; and
- The integrity of the invoice contents is guaranteed, i.e. the legally required information on the invoice cannot be changed when the invoice is issued or thereafter.
The legislation will allow proof of authenticity of the origin of the invoice and integrity of the invoice content through other approved procedures (in addition to a qualified signature and EDI).
Although it is not entirely clear which other procedures could be used in practice, the new rules create possibilities to implement e-invoicing in line with individual company needs and requirements. Companies whose systems already meet the above requirements may be able to switch to e-invoicing in a cost-effective way. However, affected companies need to continue to be mindful that the requirements on electronic archiving must be observed.
If you have any questions, please contact Irene Abele or Thomas Walz or your regular Deloitte indirect tax contact.
