Mapping Between The Recommendations Of The Expert Group Of The Commission And The Workshop On E Invoicing

CEN Workshop on eInvoicing phase 3 eINVIII_005

Secretariat: Nederlands Normalisatie-instituut (NEN) Mr. G. van den Akker Telephone: +31 15 2 690 426 Vlinderweg 6 E-mail: [email protected] P.O. box 5059 2600 GB Delft The Netherlands

Title : Mapping between the recommendations of the Expert Group of the Commission and

the workshop on eInvoicing Source : Mr. Nisbet Date : 2010-02-09 Status : For information Note :

20 January 2010

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CENExpert Group Mapping Project Executive Summary

Definition of EDI In numerous CWA’s CEN sought to expand the scope of Article 232 by redefining

EDI to eliminate any specific technology and thereby include XML invoices, as well as EDIFACT and ANSI X‐12 within the definition of EDI. The Expert Group’s Recommendation 2.2 recommends deleting all of Article 232 and removing all references to any technology, including EDI . The goals of both approaches are closely aligned, but the means are different. Convergence can perhaps be highlighted through EG Recommendation 2.5, which recommends that until Article 232 is eliminated, Member States should implement the “other means” option, which under CWA 16047 includes several methods of transporting XML documents. CEN Phase 3 may also want to recommend that Member States adopt the broader definition of EDI as a similar “interim measure” during the time it takes to implement a new Directive eliminating Article 232. This proposal would be consistent with the goals advanced by the Expert Group’s “other means” recommendation.

Model Trading Partner Agreement

While CWA 15574 (2006) updated the 1994 Model Trading Partner Agreement adopted by Commission Recommendation 94/820/EC, there is no specific reference to that Model Trading Partner Agreement in the Expert Group report. However, Expert Group Recommendation 5.5 .11 (Need for Agreements) recognizes the need for agreements between trading partners to “promote trust, reach and interoperability”. Moreover, the Expert Group recommends that its Code of Practice be incorporated into bilateral trading partner agreements.

Model EDI Agreement for Service Providers

CWA 15581 (2006) identifies key provisions that should be addressed in third party service agreements. Section 3.7 of the Expert Group Final Recommendation (Trustworthiness and data protection) lists similar, but not identical, issues to be included in third party service agreements. Recommendation 5.5.11 recommends development and implementation of model agreements “clearly establishing responsibilities and liabilities.” Neither CEN nor the Expert Group point to an existing model agreement for service providers, but both recognize the need for one.

Recommendations regarding Advanced Electronic Signatures

CEN has provided significant guidance on the technical aspects of AES, both in CWA 15579 and CWA 16047 provisions regarding Class “C” Business Class and Section 7.3.8 regarding single field encryption. While the Expert Group recommends deleting all requirements for AES, as the Expert Group in Section 4.4 recognizes that non‐VAT issues may compel parties to voluntarily use AES, such as for legal evidence purposes or internal election to do so.

Recommendations Regarding Format of Invoices

CWA 15579 (2007) contained specific recommendations regarding the characteristics of the invoice format (static non modifiable format). Expert Group recommends (4.4) an ultimate goal of a single syntactical format but recognizes in the interim 2 or 3 mutually interoperable syntactical formats will best foster mass adoption . Recommendation 4.9 also recommends “use of choreography specifications and format conversion tools will continue to facilitate mapping”, which recognizes that formats may need to be converted between trading partners.

Recommendations Regarding Minimum Content

CWA 15575 (2009) and Annex 7 of the Expert Group list invoice content details. Specific mapping between both lists remains to be conducted (OFS Portal is preparing that mapping analysis separately).

Common Set of Definitions

Expert Group Recommendation 3.1 recommends “consistent use” of terminology. CWA 16049 (2009) contains a glossary of defined terms. Does this CWA complete the Expert Group recommendation or is there more work to be

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performed? Definition of Electronic Invoice

This issue is developed in CWA’s 16047 and 16049 (2009) but is not explored by the Expert Group. Does CEN’s emphasis on an electronic data set help implement Expert Group recommendations regarding format and clear implementation guidelines?

Partial or Full Acceptance of Invoice

CWA 16047 explains that allowing invoice senders the option to designate whether a contested invoice should be rejected in full or in part will aid both SME’s, who typically prefer partial rejection, and large trading partners, who typically prefer rejection in full. This is consistent with Expert Group Recommendation 1, which recommends meeting the needs of SME’s as a “priority focus” by concentrating on specific business requirements.

Invoice Storage

Both CWA 16047 and the Expert Group (Code of Practice, Section 11) anticipate that converted invoices may be stored in different formats, so long as the underlying transaction data and relevant supporting documentation are accessible by tax auditors.

Conversion

CEN CWA 16047 describes permitted forms of conversions, (to the extent allowed under national law) and Expert Group Recommendation 4.9 calls on CEN to support implementation guidelines that include the “use of choreography specifications and format conversion tools” to facilitate mapping between standards.

Other Means

CWA 16047, Section 7.3.8 identifies several examples of “other means” and the Expert Group recommendation calls for more Member States to implement the “other means” option.

New Organization to Monitor and Promote e‐Invoicing

EG recommends a multi‐stakeholder e‐Invoicing Forum at European Level made up of 1 to 2 representatives per Member State bodies meeting quarterly. Is this derived from the CWA 16046 Community of Practice, or a separate process. If separate, what is role of CEN?

Draft: 21 January 2010

Mapping Expert Group Final Recommendations Regarding CEN to CEN Phases 3 and 4

Prior CWAs Expert Group Recommendation Future CWAs

CWA 16046 (Adoption programme for increased electronic invoicing in European business processes)

Responsibility for Recommendation 3: The multi‐stakeholder e‐Invoicing Forum recommended below to operate at European level should take the lead, supported by CEN, the service and solution provider community, as well as community projects, associations and user groups. Progress should be continuously monitored over the next two year period in the expectation that tangible progress will have be achieved by end‐2011.

Should this be Phase 3, CWA 4 (Awareness and Promotion) or elsewhere in Phase 3? Is it a Phase 4?

CEN CWA 15574 July 2006 (recommends broad definition of EDI and attaches model EDI Trading Partner Agreement)? CEN CWA 16047 (E‐Invoicing Compliance Guidelines)

R4.9: The EG recommends that the European user community should develop clear profiles and implementation guidelines based on common recommendations facilitated through CEN to support the use of e‐invoicing and facilitate interoperability. These implementation guidelines should be made freely available and stored publicly. Until full standards convergence based on these implementation guidelines occurs, the use of choreography specifications and format conversion tools will continue to facilitate mapping between standards.

Possibly Phase 3 CWA 1 (Development of Sustainable Compliance Guidelines for Electronic Invoicing) or CWA 2 (E Invoicing Processes in Europe and enablement of SMEs)

Responsible for Recommendation 4: As stated above, UN/CEFACT and ISO, as global standards organisations should continue to collaborate on the development and maintenance of the CII. CEN should develop the required set of implementation guidelines as soon as possible and no later than September 2010. All user groups adopt or are helped to adopt the standard, and all service and solution providers (including ERP vendors) are expected to implement in all applications.

Same as above, but deadline for the “implementation guidelines” is September 2010. Meeting this time deadline will require significant effort.

R5.7: The EG recommends to continue the current CEN Workshop and enhance its activities to take account of the Expert Group recommendations.

General endorsement of Phase 3 by Expert Group per discussions in Brussels

Responsible for Recommendation 5: The European Commission and Member States to establish the proposed forums by September 2010 with the engagement of all stakeholder groups. CEN is to facilitate the continuation of its Workshop in synchronisation with these activities.

Should this be CWA 4 (Awareness and Promotion) or elsewhere in Phase 3? Is it a Phase 4?

CWA 16047 (E‐Invoicing Compliance Guidelines)

4.5. Development of good practices The Expert Group recommends the development and use of tools for good practices. Such tools should be appropriate to the requirements of trading parties, their advisers and service providers. It is important that such tools do not impose new requirements on trading parties, who have choice and freedom over their use and that they are technology neutral and fully aligned with the core principles stated in the Code of Practice.

Phase 3 CWA 1 (Development of Sustainable Compliance Guidelines for Electronic Invoicing)


4.5. Development of good practices As an example and on a voluntary basis, tools such as the E‐Invoicing Compliance Guidelines developed by the CEN/ISSS workshop on e‐Invoicing, could be

Phase 3 CWA 1 (Development of Sustainable Compliance Guidelines for Electronic

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used by businesses and service providers, as a self‐assessment tool for auditing and compliance checking e‐invoicing solutions and thereby provide certainty on the appropriateness of the solution.

Invoicing)

CWA 16050 (Framework for emerging network infrastructure of eInvoice service providers throughout Europe) Section 4.4 – Service provider criteria includes “appropriate date security” Section 4.5 – lists minimum requirements for interoperability agreements, including “confidentiality and secrecy” but no details.

5.2. Current market reality Based on these trends, a number of interoperability initiatives are currently observable in terms of the development of network models:

The growth of interoperability agreements between service providers including collective agreements.

Banks providing channels and linking to other service providers in a number of markets and potentially on a pan‐European basis.

Public initiatives such as PEPPOL and the Commission procurement programmes and initiatives among various Member States.

The CEN Workshop Agreement on the interconnection of service providers being worked on in the CEN/ISSS‐eInvoice/2 Workshop.

The issue of addressing is also receiving increased attention.

Phase 3, CWA 3 (Conformance criteria for interoperability across e‐business networks and services)

CWA 16049 (Assessing new business processes and technologies for eInvoicing)

5.5.1. Identification of actors and roles Actor and role definitions should be agreed and maintained by an appropriate body such as CEN and shared with all stakeholders. They should also be aligned with those already used in other standardization domains (e.g. UN/CEFACT and ISO20022 repository definitions).

Was this accomplished by CWA 16049 or is there more to be done?

CWA 16050 (Framework for emerging network infrastructure of eInvoice service providers throughout Europe)

5.5.5. Addressing and Routing Industry participants are encouraged to cooperate in the development and adoption of more interoperable and easy to use addressing and routing procedures within a standards body such as CEN, taking due account of the relevant international standards.


CWA 16050 (Framework for emerging network infrastructure of eInvoice service providers throughout Europe); Need to review CWA on Cyber Identity when published.

5.5.5. Addressing and Routing While these are desirable goals, we must live with the fact that there is a large number of different entity identification systems for different purposes – for instance the draft CEN Workshop Agreement (CWA) on Cyber Identity (to be published end‐2009 or early 2010) identifies 15 company identity ‘use cases’ all with their own characteristics. Setting out requirements and encouraging convergence – in the short or medium‐term – represent the first steps towards interoperable solutions.



5.5.7. Use of Recommended Good Practice Guidelines The Guidance Recommendations propose the use of well constructed good practice guidelines as a self assessment tool on a voluntary basis and draw attention to the CEN Compliance Guidelines as a recent good example that have defined a general e‐invoicing process analysis model that can be applied to a wide universe of implementation scenarios. In

Phase 3 CWA 1 (Development of Sustainable Compliance Guidelines for Electronic Invoicing)

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addition to supporting legal compliance, these guidelines also assist with achieving business and organisational interoperability.

CWA 16049 (Assessing new business processes and technologies for eInvoicing)

6.6. Einvoice Content Standards – Recommendations The European user community should develop clear profiles and implementation guidelines based on common recommendations facilitated through CEN to support the use of e‐invoicing and facilitate interoperability. These implementation guidelines should be made freely available and stored publicly. Until full standards convergence based on these implementation guidelines occurs, the use of choreography specifications and format conversion tools will continue to facilitate mapping between standards. Note: Identical to Recommendation 4.9 above

Phase 3? Is this accomplished by CWA 16049 or is there more to be done?

7.2. Standardization The Expert Group recommendation is to continue the current CEN Workshop and enhance its activities to take account of the Expert Group recommendations. The previous CEN/ISSS Workshops have worked well and could easily be evolved into a long term activity. This activity should be open to all interested parties, with transparent governance and balanced representation, a well accepted consultation and decision making process, the continued expectation that participants will provide the necessary resources in terms of effort, and the assurance that resulting standards will be made available free of charge. The Workshop should operate on a rolling basis with a work programme agreed at least annually based on clear and measurable objectives, business plans, the deployment of a qualified project manager and draft consensus documents to be submitted to public consultation. These activities need to be fully aligned with the work of the Pan‐European e‐Invoicing Forum described in the paragraph above.

Phase 3 and Phase 4. How should CEN align and coordinate with Pan‐European e‐Invoicing Forum(s)?

7.2. Standardization In the area of e‐invoicing, CEN should provide the necessary consensus‐based platform and tools to help the implementation of relevant standards in Europe, and to ensure international standards bodies meet European requirements. CEN will continue to be the European gateway into UN/CEFACT.

Phase 3 and Phase 4. Specific CWA’s? Forging, developing and strengthening links with other international standards bodies should be included in Phase 3 and Phase 4

Draft: 18 January 2010

CEN – Expert Group Mapping of Selected EInvoicing Issues Commission

Recommendation 94/820/EC

2006 CWA 15574 or 2006 CWA 15581

2007 CWA 15579

2009 CWAs 16046, 16047 CEN Good Practice Guidelines, 16048, 16049, 16050 or 15575

2009 Expert Group Final Report

Definition of EDI Recommends Model EDI Agreement Article 2.2 of Model EDI Agreement defines EDI as follows: 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. This definition was later adopted by reference in Directives 2001/115/EC and Directive 2006/112/EC Article 232: Invoices sent or made available by electronic means shall be accepted by Member States provided that the authenticity of the origin and integrity of the contents are guaranteed by one of the following methods:

2006 CWA 15574 Implements Commission Recommendation 94/820/EC Preamble states: “The term ‘EDI’ in the Directive 2001/115/EC should have the widest possible meaning of formatted exchanges, not dependent on a specific ‘technology’ (EDIFACT, X‐12, XML, etc.), nor limited to specific international, national or sector standards.” Revised Model EDI Agreement attached to CWA has following new definition for EDI: 2.2 EDI: Electronic data interchange is the transfer of commercial, administrative and business information between computer systems, using data messages as defined in 2.3

N/A CWA 16047 Defines EDI as follows: Electronic data interchange (EDI): The transfer of commercial, administrative and business information between computer systems, using data formats which have been mutually agreed by the parties. EDI exchanges of invoices are normally used between trading partners to (partially) automate their supply chain. In most interpretations, the use of structured data alone does not make a process EDI. A key element of an EDI system is the Interchange Agreement between the EDI trading partners making provision for the use of various technical, security and business procedures including those

Recommendation R2.2 Recommends deleting Articles 232‐237 of Directive 1006/112/EC and Recommends adoption of proposed new VAT Directive for the following reasons: It clearly provides for the

elimination of the distinction between paper and electronic invoices for VAT purposes.

It deletes reference to specific technologies such as EDI, electronic signatures and other technical options.

It eliminates the requirement for authenticity and integrity as a feature of the transmission process for electronic invoices.

See Reference to EDI in Section 5.5.6, but no definition. See also Recommendation 2.5 regarding implementation of “other means” option pending amendment to Directive.

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(b) by means of electronic data interchange (EDI) as defined in Article 2 of Commission Recommendation 1994/820/EC of 19 October 1994 relating to the legal aspects of electronic data interchange when the agreement relating to the exchange provides for the use of procedures guaranteeing the authenticity of the origin and integrity of the data; however Member States may, subject to conditions which they lay down, require that an additional summary document on paper is necessary.

which have been mutually agreed by the parties in the transfer.

aimed at ensuring and proving the authenticity of the origin and integrity of the data. In this context, Electronic data interchange or EDI is a generic term that covers conventional EDI file formats (UN/EDIFACT [31], ANSI‐X12) as well as later developments using XML (Extended Markup Language) using UN/CEFACT or other formats. Note: CWA 16048 contains same definition; CWA 16049 points out difference between this definition and Commission Recommendation CWA 16048 7.1 EDI The definition of EDI in the directive 2001/115/EC is based on and refers to Article 2 of Commission Recommendation 1994/820/EC of 19 October 1994. The Recommendation is restrictive and not considered actual with present day EDI implementation of UN/EDIFACT,

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UN/CEFACT, other recognised standards, or agreements between trading partners. The CEN e‐Invoicing Workshop phase 1, recommended a revision of the October 1994 Recommendation and provided a proposal for review by DG Taxation and Customs (DG/TAXUD) and DG Enterprise (DG/ENTR). The directive presents three approaches, EDI, digital signature or other means. But several Member States have interpreted that as EDI and digital signature or EDI and other means. As a consequence, the application and use of e‐Invoicing is not promoted, as was the aim of the directive 2001/115/EC, but rather made more complex, complicated, and expensive. The group strongly recommend that it should be possible to use EDI for e‐Invoicing without imposing additional requirements, such as digital signature or paper summary sheet under the provision that

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authenticity, non‐repudiation, and integrity are maintained by the transmission technique, e.g. the use of value added networks (VANs) or other reliable transfer protocols.

Model EDI Agreement between Trading Partners

Promulgated by Commission Recommendation 94/820/EC

Revised by CWA 15574 CWA 16046 References 94/820/EC but not CWA 15574 revisions

“Code of Practice” should be incorporated in bilateral agreements entered into between Trading Partners on voluntary basis. No other reference to Model EDI Agreement

Model EDI Agreement for Service Providers

CWA 15581 3.2 Third party service agreement It is recommended that an explicit agreement is drawn up between the customer and the Service Provider. In the agreement, at least the following points should be considered: ‐ the parties and the contact persons ‐ communications ‐ intellectual property rights ‐ responsibilities and duties, e.g. where, in the process, is the responsibility transferred to the SP ‐ the level of service and

Section 3.7 Areas requiring improvement mainly involve strengthening the trust environment Service providers should be encouraged to meet the following requirements, including a range of normal terms within their contractual agreements with users. Such provisions should encompass inter alia: Confidentiality of the

content of the submitted documents.

The possibility to exclude listings of data in public directories unless permission has been granted.

Access to addressing data should not be granted to any private entities that intend

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support ‐ data security and confidentiality issues ‐ liability for damages ‐ handling of disputes ‐ handling force majeure events ‐ term of the contract ‐ cancellation of the agreement ‐ making data and/or documents available on or after termination. It will normally be appropriate to have agreements between the customer and the customer’s trading partners and/or between the service provider and the customer’s trading partners. 3.3 Interconnection agreement between Service Providers It is recommended that an explicit agreement is drawn up between the Service Providers. In the agreement, at least the following points should be addressed ‐ the parties and the contact persons; ‐ general obligations of a contracting party; ‐ definitions of, and

to make use of it for commercial purposes. Offering a fair pricing model that recognises the real needs of trading parties to benefit from a coherent and well‐connected environment for interoperability.

Unless specifically contracted by its principal, a service provider should not open, interpret or manipulate electronic messages without specific authority. Unauthorised information‐transformation may initially be seen as only an information integrity issue, but with a growing number of commercial documents exchanged electronically, many organisations may also find it to be of commercial concern.

As appropriate, such provisions should also apply to trading parties in relation to each other in order to safeguard data and avoid unauthorised disclosures and unrequested process steps. See also Section 5.5.11 (The Need for Agreements)

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standards for, the contracting parties’ services; ‐ changing the services of the contracting parties; ‐ service availability; ‐ technical solution; ‐ compensation for damages and limits to liability; ‐ confidentiality and secrecy; ‐ agreement validity period, and notice of termination of the contract; ‐ handling of disputes.

Recommendations regarding Advanced Electronic Signatures

CWA 15579, 2007 (E‐Invoices and Digital Signatures) Focuses on technical implementation of Directive 2001/115/EC provisions regarding Advanced Electronic Signature

Class “C” of CWA 16047 Recommends deleting Article 233(2) of Directive 2006/112/EC allowing Member states to require AES But notes in Section 4.4 that non‐VAT issues may still require use of electronic signatures: Legal evidence of invoices in

court procedures may require paper invoices or in case of electronic invoices may require electronic signatures.

The need for interoperability and harmonization of e‐Signature practices across European Member States for those trading parties that

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voluntarily choose to use e‐Signatures.

Recommendations Regarding Format of Invoices

CWA 15579, 2007 Therefore, it is highly recommended that static non modifiable document formats are used that either do not outright support active code, which can dynamically change the presentation, or that allow for disabling these hidden codes mechanisms. As a matter of fact, some applicable law outright forbids the use of macros and hidden codes mechanisms.

R4.4: The EG recommends convergence in the area of syntax and methodology expression. This convergence will avoid standards fragmentation and unnecessary cost burdens. Whilst the ultimate goal should be the single syntactical format, it is clearly recognised that in the interim 2 or 3 mutually interoperable syntactical formats would foster mass adoption and provide support for the reference semantic data model.

Recommendations Regarding Minimum Content

CWA 15575, November 29, 2009, specifies list of invoice content details for Directive 2006/112/EC expressed as

Recommendation 4: The EG recommends that all actors within both the private and public sector adopt a common invoice content standard and data model – the UNCEFACT Cross‐Industry Invoice (CII) v.2.

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UN/CEFACT Core Components

Recommendation R5.3: The EG recommends to take forward the CII v.2 content standard: including the preparation of a set of European implementation guidelines to be completed as soon as possible and no later than September 2010. R4.10: The EG recommends that users of the referenced semantic data model should engage actively in the maintenance and further development of C11. R4.11: The EG recommends that UN/CEFACT completes the necessary components to support implementation of the C11 v.2 standard as soon as possible so that the whole package can be launched by the end of 2010. Further to fostering interoperability the Expert Group has worked upon the definition of a 'core e‐invoice data set' (refer to Annex 7) within the single semantic data model. This is core set of data elements that constitutes the minimum legally required and commonly expected set of data ‐ among

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other things containing the data specified in Articles 226 and 238 of Directive 2006/112/EC for an invoice no matter the size of enterprise of domain/sector it is used within. The proposed mechanism is that any user of e‐invoicing at a minimum will always support this core set in any implementation although in almost all cases more elements may need to be conveyed even by SME users. The validation though should preferably refer to the full semantic data model allowing easy implementation of more data elements. Hence it is also recommended that ERP and application service providers of e‐invoice services implement the full capability of the recommended semantic data model. The core data set and the single semantic data model support basic cross‐industry e‐Invoicing business requirements. They do not include all business requirements specific to any one particular industry sector, but will be applicable to a broad community of users and especially deliver support for a core set of requirements including integration to payments

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and any common legal requirements established by relevant legislation. The UN/CEFACT to complete the necessary components to support implementation of the CII standard as soon as possible so that the whole package can be launched by the end of 2010.

Common Set of Definitions

CWA 16049 contains set of proposed definitions for key e‐invoicing terms

R3.1: The EG recommends the consistent use of a terminology to describe and clarify the roles and responsibilities of actors.

Definition of “Electronic Invoice”

CWA 16047: Electronic Invoice: An electronic dataset prepared by or on behalf of a Supplier listing items sold and presented to the Buyer for payment, which contains all details agreed between the Trading Partners. Electronic Tax Invoice: The designated electronic invoice for tax audit purposes with at a minimum all the properties that are legally required. In this Commentary and the Compliance Matrix, the Electronic Tax Invoice is referred to as EInvoice; further the corresponding terms E‐Invoicing and Invoice/Invoicing are used where appropriate.

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While CWA’s 16048 and 16049 include these definitions, CWA 16050 does not.

Partial or Full Acceptance of Invoice

CWA 16047, Section 7.4.1 It is recommended that the Supplier be enabled to designate whether an incorrect or contested invoice must be rejected in full or may be partially rejected with partial payment, but the trading partners must reach agreement on that election based on their particular circumstances. Allowing Suppliers to make such an election may have a significant impact on rate of adoption as many SME’s may elect to allow partial rejection in order to receive partial payment prior to reconciling the Invoice and maximize their working capital. Larger Supplier enterprises operating ERP systems may prefer only full rejection of their Invoices in order to minimize the costs associated with reconciling a partial payment against the

The EG recommends meeting the needs of SMEs as a priority focus, by concentrating on a number of specific business requirements.

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invoiced amount. Imposing a universal “reject in full” rule on all Suppliers might impose significant burdens on SMEs whose cash flow depends on receiving a partial payment of the uncontested amount, while imposing a “partial rejection” rule on all Suppliers may impose significant administrative cost and burden on larger Suppliers.

Invoice Storage CWA 15579 “The authenticity of the origin and integrity of the content of the invoices, as well as their readability, must be guaranteed throughout the storage period…. The information they contain must not be altered; it must remain legible throughout the aforementioned period”. Citing Directive 2001/115/EC Proposed Directive on VAT Invoicing Amending 2006/112/EC, Article 249 “For control purposes, where a taxable person stores, by electronic means guaranteeing on‐

CWA 16047, Section 6.6.3(c) To the extent permitted by applicable law, the parties may also agree to store their E‐Invoice sent or received in their respective formats (i.e. the Supplier stores the invoice in the format it was in when it left the Supplier’s computer or ERP system and the Buyer stores the invoice in the format it was consumed in by its computer of ERP system) for the specified time to allow for comparison between the stored E‐Invoice to determine that the conversion did not alter the information represented in the

11 “Core Principles” of Code of Practice includes “Auditability” Auditability: Businesses must be able to demonstrate and explain their administrative and control capability. Businesses must maintain an audit trail, including the underlying transaction data and any relevant supporting documentation and data, which must be accessible towards external auditors, both statutory and tax. Accessibility must be ensured for at least six years.

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line access to the data concerned, invoices which he issues or receives, the competent authorities of the Member State in which he is established and, when the VAT is due in another Member State, the competent authorities of that Member State, shall have the right to access, download and use those invoices.”

EInvoice.

Conversion CWA 15581: 3.5 Conversions between formats Conversions from one format to another are needed, as there are many individual formats in use for electronic invoicing – even within a single Member State. However, the need for conversion should be minimised wherever possible and conversions restricted to those that are necessary to bridge the differing formats of the message originator and the message end receiver, since repeated conversions may result in loss of data quality, or even loss of data, in the individual messages being

CWA 16047, Section 6.6.3: Conversions that only change the format of the electronic invoice in accordance with agreed and reproducible maps are considered not to substantively alter the data contained in the electronic invoice. To the extent permitted by applicable law, the parties may also agree to store their E‐invoice sent or received in their respective formats (i.e. the Supplier stores the invoice in the format it was in when it left the Supplier’s computer or ERP system and the Buyer stores the invoice in the format it was consumed in by its computer or ERP system) for the specified time to

Using a Signed PDF has the benefit of transmitting a universally accepted format that allows easy readability for workflow applications and tax audits. It is accepted practice for unsigned structured data to be transmitted together with the signed invoice so that data conversions can easily be performed at every step where necessary. R4.9: The EG recommends that the European user community should develop clear profiles and implementation guidelines based on common recommendations facilitated through CEN to support the use of e‐invoicing and facilitate interoperability. These implementation guidelines should be made freely available and stored publicly. Until full

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converted. allow for comparison between the stored E‐Invoice to determine that the conversion did not alter the information represented in the E‐Invoice. CWA 16050: 5.2 Recommendations for conversion In situations where conversion is needed a service provider should not make any changes or other reproduction in the content of an electronic invoice message while it is in his custody, unless agreed with his client. Service provider carrying out conversion services shall provide his client with details of the conversion and, if needed, advise on the necessary mechanisms for storage and audit trail. Conversions are always increasing the cost, complexity and possibility for errors and malfunctions in the eInvoicing chain. Hence, unless specifically contracted by trading party, a service provider shall make no

standards convergence based on these implementation guidelines occurs, the use of choreography specifications and format conversion tools will continue to facilitate mapping between standards.

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attempt to open, interpret or reproduce electronic messages. A great step forward in national, regional and international environment would be a commonly agreed interchange format in eInvoicing communication between service providers. The use of common format could create remarkable benefits and cost savings in terms of fewer conversions made by service providers as well as reduced need of mapping of invoice content when establishing new connections.

Data Protection

Commission Recommendation 1994/820/EC October 1994, Article 7.1 of Model EDI Agreement: The parties shall ensure that EDI messages containing information specified to be confidential by the sender or agreed mutually to be confidential between parties, are maintained in confidence and are not disclosed or transmitted to any unauthorized persons nor used for any purposes

Recommendation R1.5: The EG recommends to develop and maintain a competitive and trusted market place for services and solutions and assure trustworthiness and data protection.

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other than those intended by the parties.

Manual Processes While manual processes are permitted when agreed upon by mutual consent of the parties, the requirement to use manual processes should not be imposed on any trading partner by another trading partner.

R1.2: The EG recommends that e‐Invoicing should enable SMEs to create savings in time and money through a favourable cost/benefit equation and that all e‐Invoicing solutions and tools should be easy to use. Business integration:

Integration of services with other process, systems or solutions is competitive.

“Other Means” CWA 16047 Section 7.3.8 Lists several examples of “other means”: SSL/TLS, A S1‐3, secure e‐mail, single field encryption, VAN, OFTP/OFTP2

Recommendation R2.5: The EG recommends that in the short term, pending the adoption of the new VAT Directive, those Member States who have not yet done so, should implement the option of ‘other means’ as provided for in the current VAT directive (Directive 2006/112/EC) so as to enable the practical implementation of the Expert Group’s Code of Practice.

New Organisation to Monitor and Promote eInvoicing

e‐Invoicing Gateway, enlisting of organizations, Country leads and proposed annual event of “Community of Practice” of CWA 16046

R5.2: The EG recommends to set up a pan‐European e‐Invoicing Forum. R5.2.1: The EG recommends that there should be a multi‐stakeholder e‐Invoicing Forum at European level, made up of 1 or 2 representatives of the Member State bodies meeting quarterly (or as required more

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frequently). R5.2.2: The EG recommends that ten further seats should be added for experts, constituencies missing from the national selection processes, pan‐European associations, and the Commission etc. The European Commission should ensure a balanced composition of interested stakeholders. R5.2.3: The EG recommends that the body should elect a Chair and a Steering Committee and be supported by a Secretariat provided by the European Commission, who should take a pro‐active role. It should have the necessary resources to undertake wide communication and maintain an active website. R5.2.4: The EG recommends that the Commission should continue to drive the development by establishing the Forum for at least an initial period of two years as no market driven body able to take on this task has been identified. R5.2.5: The EG recommends that the body should have the following concrete tasks in full liaison with the national e‐Invoicing bodies: • Support and monitor adoption of the Invoicing Directive and other regulatory simplification

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and harmonization recommendations; • Maintain and further develop the Code of Practice; • Support and monitor adoption of the CII and give continuing guidance to relevant standardization bodies for further development of standards; • Support and monitor roll‐out and observance of the Guidance Recommendations for Interoperability; • Monitor adoption rates of e‐invoicing and identify and share best practices; • Identify and promote EU‐wide action harmonization programs – such as automation of procurement, accounting and financing enhancements etc. – building on the einvoicing platform; • Undertake communication and promotion, regulatory relations, and stakeholder consultation and take responsibility for the proposed communications plan described in the next recommendation; • Provide an environment for the progressive maintenance and further development of the European e‐Invoicing Framework, as required.