German Ministry of Finance (BMF) draft statute accepts three procedures on eInvoicing and therefore implements EU Council requirements
BMF puts forward third way, but singles out qualified signatures and EDI as procedures particularly suited for electronic invoices
Düsseldorf, 22 Nov. 2010 - In a draft statute dated 26 October 2010, the German Federal Ministry of Finance (BMF) has implemented the requirements of the EU Council of Ministers dated 13 July 2010 on amending the EU VAT Directive 2006/112/EC. In this draft the Ministry specifies that with effect from 1 July 2011, companies will have a choice between three procedures in respect of securing the deduction of input tax in the case of electronic invoices.
According to the requirement of the EU Council of Ministers, in the draft statute the German Federal Ministry of Finance accepts the following three procedures in respect of the exchange of electronic invoices:
(1) Electronic signatures based on a qualified certificate
(2) Application of standardised EDI procedures
(3) “Other procedures” that guarantee the authenticity of the origin and integrity of the content (NEW)
In Section 14, sub-section 3, of this draft Value Added Tax Law, the BMF puts forward as the new “third way” application of “other procedures” such as internal controls, and therefore satisfies the conditions of the EU administration. However, at the same time in the new draft statute it stresses the fact that to date merely the use of qualified signatures and forwarding by way of EDI procedures have been standardised. A guaranteed, standardised EU-wide recognition of electronic invoices without specific country risks and expensive individual solutions is currently only guaranteed on the basis of qualified signatures or EDI procedures.
The Ministry leaves completely open, incidentally as the EU Council has, how the new “other procedures” such as internal controls, should be arranged to guarantee the authenticity and origin of invoices over the entire storage period of 10 years. In addition there are considerable differences within the EU in respect of interpreting such “internal control procedures”. An EU-wide harmonisation of such interpretations is not foreseeable.
Therefore, consideration shall only be given to the new “third way” for highly selective cases such as internal Group setting off, static business associations or very small closed user groups.
As the Ministry highlights in the current draft, the qualified signature offers a secure process for handling electronic invoices in compliance with the law at international level without the company having to implement various specific country procedures to furnish proof of authenticity and integrity.
The German Federal Ministry of Finance therefore explicitly states in the explanations of the new version of the Value Added Tax Law that “as a general rule, electronic invoices based on this procedure [qualified signature] are to be recognised on an EU-wide basis for the deduction of input tax.”
This new version of the Value Added Tax Law means planning security, investment security and cost savings, in particular for international companies.
They can provide a qualified signature for electronic invoices and therefore need only apply a single technical procedure to exchange such invoices in an international standardised format and EU-wide. The deduction of input tax is therefore secure on a country-wide basis. Expensive national isolated application and complex internal control systems geared towards different national characteristics can be avoided in respect of invoice senders and recipients.
AuthentiDate eInvoicing solutions fulfill the requirements of the current and future EU VAT directive and German Value Added Tax Law.
About AuthentiDate
AuthentiDate (www.authentidate.de) is one of the leading providers in the fields of "Secure Data Exchange" and "Secure eHealth“.
As the inventor of the central mass signature, AuthentiDate offers efficient and innovative eInvoicing business process solutions, software, services and consultancy services using electronic signatures and time stamps. AuthentiDate software products and web-services (SaaS) have been used for years by leading global companies such as AIRPRODUCTS, ALCATEL LUCENT, BOSCH, DOW Chemical, E.ON, EnBW, JOHN DEERE, JP MORGAN BANK, METRO, TÜV, TELEKOM and UNITED INTERNET etc. Within the AuthentiDate eInvoicing Network millions of electronic invoices are processed each day.
AuthentiDate International AG is a certification service provider, certified by the German Federal Network Agency and operates a Trust Center in accordance with the German signature laws. Com-pliance with the strict requirements of the German signature law is proven through a testing and confirmation of the signature law, which includes fulfillment of the EU directive.
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