CEN/ISSS Task 1. EDI and Business Standards

eInvoicing WS Public Event, Brussels 11 April 2006

Task 1. EDI and Business Standards

Mounir El-KhouryMKEnterprise


Task 1. EDI and Business StandardsTask 1. EDI and Business Standards

Task 1.1 European model EDI AgreementTask 1.2 Invoice Core ComponentsTask 1.3 Party and Product identifiersTask 1.4 Standard Codes for clauses

included in invoicesTask 1.5 Survey on Invoice Data Content


Task 1.1 European modelEDI Agreement


VAT Directive 2001/115/EC references Commission Recommendation (CR) 1994/820/EC for EDI Definition

EDI in CR 1994/820/EC is restrictive, limited to UN/EDIFACT and needed to be brought up to date

Old definition of EDI here below and text of CR 1994/820/EC have been revised, See Task 1.1. ‘Electronic data interchange is the electronic transfer, from computer to computer, of commercial and administrative data using an agreed standard to structure an EDI message’.




2.2. EDI: (Proposed definition is open)Electronic data interchange is the transfer of commercial, administrative and business information between computer systems, using data formats which have been mutually agreed by the parties.

Proposed revision and update of document CR 1994/820/EC has been submitted to DG Enterprise, Taxud, Information Society and Open Review

No negative comments receivedApproved by CEN Workshop




Importance of this revision:To open CR 1994/820/EC and not limit it to UN/EDIFACT standards or other standards because new developments are in XML:

UN/CEFACTe-public procurement, e-Government, ..GS1, RosettaNet, Eurofer, …

In VAT Directive, EDI users may not be required by Member States to use AES or QES for eInvoicing if they meet requirements of authenticity and integrity

Task 1.2 Invoice Core Components


Task 1.2 :To submit the invoice data content details identified inthe VAT Directive for the creation of the relevantUN/CEFACT Core Components

Work progressing according to UN/CEFACT:Core Components Technical SpecificationSubmission rules and procedures (Lengthy)TBG17 Harmonisation with other submissions




UN/CEFACT eInvoice BRS (Business Requirements Specification) and RSM (Requirements Specification Mapping) already approved by UN/CEFACTAvailable on UN/CEFACT TBG1 Supply Chain and Procurement Website

http://webster.disa.org/cefact-groups/tbg/wg/tbg1_main.cfm

Core Components of the invoice will be available by May 2006

UN/CEFACT ebXML schema of the Cross industry invoice will be published in October 2006


Task1.3 Party and Product identifiers


VAT Directive requires Invoices to have:Name and address of partiesDescription of product or service

But most present day eBusiness communities are using coded identifiers for Parties and Products; (automotive, retail and distribution, electronics, chemical …)Descriptive identifiers do not fulfil role of identifiers in eBusiness transactions


Task1.3 Party and Productidentifiers


Proposed amendment to VAT directive 2001/115/EC to permit coded identifiers:

The full name and address and / or a unique coded identification of the taxable person; where necessary the taxable person’s tax representative; and of his customer;

The quantity and nature, as a coded identifier and / or description, of the goods supplied or the extent and nature, as a coded identifier andand / or description, of the services rendered;




From Survey of Member States (Task 1.5)

Member States requiring textual identifiers for name and addressbe, cy, ee, el, fr, hu, it, li, mt, pt, si, sk, ch

Member States permitting coded identifiers instead of name and address (Look up tables to be made available to convert code to text)at, cz, dk, fi, nl, se, uk

Member States permitting coded identifiers for Products and Services (Look up tables to be made available to convert code to text) at, be, dk, cz, fi, mt, nl, si, se, uk, ch




Using text identifiers is not satisfactoryin eBusinessLook up tables provides full details of Party, product or serviceCoded identifiers permit details to be picked up in different languages in cross border trade




Examples of party identifiers:Issued by public authorities, e.g. SIRET, SIREN, VAT administrations, ..Issued by international organizations, e.g. GS1 Global Location Number (GLN), D&B Dun’s number, IATA, …Mutually agreed Identifiers by the trading partners, e.g. Seller’s party identifier, buyer’s party identifier,




Example of Product and service identifiers:Identifiers issued by international organizations

GSI - GTIN Global Trade Item Number (GS1)Digital Object IdentifiersIATA FIATA

Identifiers issued by public authoritiesNational Health Service, National Drug Code,

Identifiers mutually agreed by trading partners




Requirement by authorities:Parties to maintain ‘Look Up tables’ to provide the cleartext equivalence using the identifiers for the period ofstorage of the electronic invoices (5-10 years) :

Name and address of partiesDescription of product or service


Task1.4 Standard Codes for clauses included in invoicesTask1.4 Standard Codes for

clauses included in invoicesText clauses inserted in Electronic Invoices for VAT exemptions,Reverse charges, Margin scheme supplies, Intra-community supply of New Means of Transport, etc. create problems;

Not electronically processable, contrary to objectives of the Directive 2001/115/EC for electronic invoicingAbsence of an agreed pan-European convention creates artificial barriers for cross-border tradeReference to national legislation in cross border invoicing has no meaning in another EU Member State.Problems in cross border ‘Self Billing’ where customer may not know exemptions relevant to his supplier…



clauses included in invoicesCEN Workshop Recommendation:

To develop codes to replace plain text clauses to meet the needs of the Invoicing Directive, with regard to “indications” of:

Supplies that are Exempt from VATSupplies that are subject to the Reverse Charge procedureSupplies that are subject to Margin SchemesIntra-Community supplies of New Means of Transport(motor cars)


Task1.4 Standard Codes for clauses included in invoices

Task1.4 Standard Codes for clauses included in invoices

From survey of member states (Task 1.5), response was verypositive to develop a standard code set based on ODETTE’s work;

19 Member States approve proposal for coded representationPortugal still needs to address pointIreland, Coded text not acceptable at present4 Member States still to respondSeveral member states request simplification and limiting the number of clauses



clauses included in invoicesCode : AAC Exempt – Article 28c(A) of Directive

77/388/ECMeaning: Exempt Intra-Community supplies of

goods.Explanation: To be used when invoicing goods

which are delivered from one EC country to another EC country if the customer has a VAT number in another EC country.



clauses included in invoicesNext Steps:a) Get formal approval of the code list from interested parties

User groupsMember states VAT administrationEU Taxud

b) Submit approved code list for official translation into Member State languages

c) Prepare explanatory documentation to support the dissemination of the code list

d) Request CEN to take responsibility for maintenance in UN/CEFACT


Task1.5 Survey on Invoice Data Content


Survey sent to EU Member States and EFTA to obtain informationOn:

Storage of electronic invoices (dealt later by H. Salmi)Update 2003 survey of data content usageProposal to introduce codes to replace plain text clauses, already dealt with in Task 1.4

Summary of Survey available in Task 1.5 handout in Section 5, but MS Responses available in electronic version of report Response received from 21 Member States and Switzerland


Task1.5 Response to Survey Invoice Data Content & Storage

Task1.5 Response to Survey Invoice Data Content & Storage

at Austriabe Belgiumcy Cypruscz Czech Rep.dk Denmarkee Estoniafi Finlandfr Franceel Greecehu Hungaryie Irelandit Italyli Lithuanialv Latviamt Malta

nl Netherlandspt Portugalsi Sloveniask Slovakiase Swedenuk United King. ch Switzerland

Responses still comede Germanylu Luxembourgsp Spainpl Poland*

*Unofficial response




Summary of issues on data content available in Task 1.5 Section 5Date of invoice:

Recommendation: Include date format in electronic invoices usinginternational code set

Sequential invoice number:Remark: Some countries only require a unique invoice number.Guidelines provided to form unique sequential number

VAT number (Seller and Buyer)Some MS may not require them for certain transactionSome MS only require use of Country Code for intra-community

tradeSome MS have VAT numbers that differ from agreed form




Party’s full Name and addressSee task 1.3

Product or service descriptionSee task 1.3

Date of supply or paymentSome differences between members states

Break-down of the Taxable amount per VAT rate or exemption

Some differences between member statesQuantity or extent

Recommend use of Unit of Measure in electronic invoices




SummaryNo problem for eInvoicing within a member stateBusiness can carry out cross border electronic transactions but differences in MS regulation could cause problems in some situations to trading partners

Next Steps proposed:Resolve identified differences in national regulationDevelop Common best practice procedures in electronic invoicing to complement the 25 National Guidelines for cross border electronic invoicing, it would help business and SMEs


Thank youThank you

Questions/comments?

<[email protected]>

http://comelec.afnor.fr/cen/wsei