Overview of the compliance of electronic invoices
Standard EN6931 was adopted by CEN (European Committee for Standardisation) on April 17, 2017. It is already adopted for B2G e-invoicing in the EU, and is the basis for the July 2030 Digital Reporting pillar of the EU VAT in the Digital Age reforms.
The European Commission estimates that the massive adoption of electronic invoicing in the European Union (EU) would save about €240 billion over six years thanks to the transition from paper invoices to electronic invoices. Based on this, the Commission wants electronic invoicing to become the main standard for Europe. See separate e-invoicing network standards, such as Peppol and DBN Alliance.
To achieve this objective, Directive 2014/55/EU on electronic invoicing in the context of public procurement aims to facilitate the use of electronic invoices by economic operators when they provide goods or services to public administrations. This directive establishes a legal framework for the establishment and use of a European standard (EN)defining the semantic model of data of the elements of an electronic invoice.
What is the EN16931 standard?
Standard EN16931 establishes the semantic data model that includes only the information necessary to ensure legal (including tax) compliance and allow the interoperability of cross-border, cross-sectoral and national trade. This model can be used by public and private sector organizations for the invoicing of public contracts (“Business-to-Government”, B2G) as well as for business-to-business transactions (“Business-to-Business, B2B).
What is an invoice that complies with EN16931?
An invoice is considered to comply with EN16931 if it complies with all the rules defined by the basic invoice model (semantic data model of the essential elements of an electronic invoice), including those specified in a compliant CIUS.
A CIUS (use specification of the basic invoice) is a specification that guides sellers on the use of the elements of the basic invoice model (identification of the issuer who is responsible for its governance, indications on business functions and/or legal requirements intended to be supported…). Invoices that meet the requirements of a CIUS always comply with the basic model.
The content of the basic invoice template
An invoice defined by standard EN16931 would consist of several separate sections:
- The basic section that contains essential elements mentioned in Directive 2014/55/EU necessary for the exchange of electronic invoices between all commercial entities. It includes a legal part, which concerns tax and commercial obligations in the EU, and a common part, which contains non-sector or country-specific commercial information.
- The sector section that includes information elements specific to an industrial sector, a community, a supply chain, or a particular type of product. This information can be added to the invoice as extensions of the basic section.
- The country section that contains elements of information that meet the specific requirements of a Member State in addition to those of the basic section.
What are the criteria that the EN16931 standard must meet?
Standard EN16931 must meet the following requirements of the European Committee for Standardization:
Technological neutrality
The EN16931 standard must be able to be expressed and used in any current and future ICT (information and communication technology) environment. Since an invoice that complies with the European standard may contain confidential information, it should support encryption, without imposing a particular technology.
Commercial neutrality
- Electronic invoices must be able to be transmitted directly from one party to another or via an intermediary service organization. In addition, they must not impose a specific business model for the supply of goods or services, or for the creation, delivery or processing of an electronic invoice.
- Compatible with applicable international standards for electronic invoicing
- The formats that are accepted under the standard are UBL, CII formats, as well as other formats such as EDIFACT or the Franco-German Factur-X mixed format.
- Compatible with the provisions of Directive 2006/112/EC on VAT in the digital age
- Complies with the personal data protection requirements of Directive 95/46/EC
- In compliance with the principles of confidentiality and data protection.
- Implementation of practical, user-friendly, flexible and cost-efficient electronic invoicing systems
All public entities in the EU must receive and process electronic invoices that comply with the European standard. To meet these requirements, it is possible to use electronic invoicing solutions provided by service providers or managed internally by companies. The standard must be usable by all electronic invoicing systems and platforms.
SMEs demand that the semantic data model be easy to use and inexpensive. The costs and resources required to adopt this new standard must not exceed those of the current system, often on paper. Contracting authorities or their service providers must provide invoice capture or invoice data systems that prevent SMEs from implementing the technical aspects of the basic invoice model. In addition, electronic invoices that comply with the standard must be able to be easily converted to a human-readable format such as a PDF file or a paper document.
The specification of use of the basic invoice (CIUS) aims to facilitate use by SMEs and small contracting entities, by limiting the content of the invoice to essential information. The semantic data model is flexible to adapt to their needs and SMEs will probably not have to participate in invoice extensions significantly.
Applicable in the context of trade between companies and have the ability to meet the specific requirements and needs of the B2B ecosystem
The European standard on basic invoices must apply in the same way for the public and private sectors. In this context, the use of the CIUS gives flexibility to entities in both sectors. The semantic data model includes “mandatory” and “optional” information elements based on international standards to ensure compatibility (dates, units of measurement, etc. and appropriate code lists).
