Which EU states have applied and obtained an e-invoicing derogation
Under current European Union VAT Directive rules, member states may not mandate the use of electronic invoices in place of paper invoices. However, they may apply to the European Commission for a temporary derogation from this. This excuses states with a special measure derogating from Articles 218 and 232 of Directive 2006/112/EC on the common system of value added tax. These articles prevent member states from imposing e-invoices (and withdrawing paper-based invoices).
The EC is planning to remove this e-invoice derogation request obligation as part of its EU VAT in the Digital Age reforms. It is likely this will come into effect before the end of 2024.
Which countries have EU e-invoicing derogation?
Below is the status of the approved and pending requests for e-invoicing derogation:
Approved:
Background on EU VAT Directive derogation on e-invoicing
The EU VAT Directive generally promotes harmonisation of VAT systems across member states, aiming for a consistent approach to VAT obligations. Under the Directive, electronic invoicing (e-invoicing) is allowed for business-to-business (B2B) transactions, but must be accepted by both the supplier and the buyer. This ensures that neither party is forced to use electronic invoices unless they agree to do so.
However, if a member state wants to make e-invoicing mandatory for all B2B transactions, it requires a specific derogation from the European Commission. This derogation is necessary because imposing e-invoicing could be seen as interfering with the principles of the EU Single Market, such as the free movement of goods and services and the uniform application of VAT rules.
Member states seeking a derogation must prove that mandatory e-invoicing would simplify tax obligations, enhance VAT compliance, and help combat VAT fraud. If the Commission grants the derogation, it is usually for a limited period, during which the member state can implement and assess the impact of mandatory e-invoicing. This approach ensures that any deviation from EU VAT rules is carefully controlled and justified.
