VAT compliance automation: E-invoicing

Recent legislation passed by the EU aims to simplify the current VAT compliance requirements in each Member State by 2013 through establishing a set of common rules that recognises paper and electronic invoices in the same way. While requirements around specific technology to guarantee the authenticity and origin of the invoice have been phased out in the new legislation, it still gives Member States the option to introduce differing requirements around the audit trail between the supplier and customer, which could prove challenging for cross-border business activity. However, it remains to be seen whether the national legislation that must be introduced across the EU by the end of 2012 will hinder or benefit businesses from a VAT perspective.