Electronic billing gains momentum

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Belgium’s government has approved a draft royal decree aimed at significantly simplifying the rules on sending and receiving electronic invoices as from 1 January 2010.

It is only permissible to send and receive invoices electronically if the recipient of the invoice agrees and the authenticity of its origin and the integrity of its content are guaranteed. Currently, businesses can only choose from three ways to ensure these guarantees: either by means of an electronic signature or by electronic data interchange in accordance with the standard EDI code or via some other method approved beforehand by the VAT authorities.

From 1 January 2010, businesses will be free to choose how they ensure authenticity and integrity. In this respect they can resort to IT means (like electronic signatures or EDI) or can opt for other solutions, such as linking the invoice to a payment, order or dispatch note.  So long businesses can evidence that the authenticity and integrity of the invoice is assured, they can henceforth even send invoices as .pdf files by e-mail.

Ine Lejeune, a Partner with PwC Belgium, was responsible as Leader Global Indirect Taxes Network for the study that PricewaterhouseCoopers carried out for the European Commission in 2008, aimed at harmonising and simplifying the Community rules on the electronic sending, receipt and storage of invoices.  In that study, PricewaterhouseCoopers proposed that paper and electronic invoices should be treated equally.  In the Netherlands, this principle was already introduced in February of this year.  In a number of other member states, too, electronic signatures are no longer required for .pdf invoices.  She therefore calls the proposal a pioneering move. “With this change, the Belgian government is making a positive contribution to reducing companies’ costs and making the Belgian economy more competitive.  By removing the technical requirements for exchanging electronic invoices, the path is cleared for further growth in electronic invoicing.  Studies have shown that simplification and harmonisation of the electronic invoicing rules could deliver cost savings of at least EUR 3.5 billion for Belgian businesses.” 

“It is also good that businesses no longer face the prospect of onerous fines or non-deductible VAT for failing to comply with intricate technical requirements.  The VAT legislation has no business setting down standards in this regard.  After all, paper invoices don’t have to be printed on paper of a particular colour.”

According to Wouter Brackx, Senior Manager and e-invoicing expert at PwC Belgium, this change offers businesses a range of opportunities to now organise their invoicing process enabling them to actually realise the cost-savings that e-invoicing can offer.  “Businesses will like as not still have to keep close tabs on their invoicing processes – certainly as far as records storage is concerned – but the flexibility now offered will in any event permit serious cost savings to be made.  Firms can already make a start now so that they're ready to get going in the new year. 

“In addition, the new rules offer many opportunities for e-invoicing providers.  They are at no time required to offer their services within strict trammels and can more easily develop new service offerings, by which they can react to users’ needs with greater agility.  In addition, these rules make it easier to establish inter-operability amongst various e-invoicing providers, which to date has been especially problematic in certain situations."

A Europe-wide solution would now seem to be essential given that the Belgian invoicing rules only apply to transactions that take place in Belgium.  Ine Lejeune: “Through our international e-invoicing network, we will continue to actively cooperate with the government to get approval under the Belgian EU presidency for the European Commission’s pending proposal in this regard.  Meanwhile, with this change in its rules, Belgium is setting the tone for other countries and proving its belief in new technologies.”