The Official Journal of the European Union published on 22 July 2010, Council Directive 2010/45/EU of 13 July 2010 amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing. These new rules will enter into force on the 20th day following its publication and Member states will have to adopt the due provisions to comply with it by 31 December 2012.

In accordance with Directive 2006/112/EC, the Commission presented a report which identified, in the light of technological developments, certain difficulties with regard to electronic invoicing and which, in addition, identified certain other areas in which the VAT rules should be simplified with a view to improving the functioning of the internal market.

Among the considerations made by the Council in Directive 2010/45/EU, it understood that in order to help small and medium-sized enterprises that encounter difficulties in paying VAT to the competent authority before they have received payment from their customers, Member States should have the option of allowing VAT to be accounted using a cash accounting scheme which allows the supplier to pay VAT to the competent authority when he receives payment for a supply and which establishes his right of deduction when he pays for a supply. This should allow Member States to introduce an optional cash accounting scheme that does not have a negative effect on cash flow relating to their VAT receipts.

It also considers that certain requirements concerning the information to be provided on invoices should be amended to allow better control of the tax, to create a more uniform treatment between cross-border and domestic supplies and to help promote electronic invoicing.

When reaching a political agreement about VAT amendments at Council meeting on march 2010, it highlighted that use of electronic invoicing can help businesses to reduce costs and be more competitive, current VAT requirements on electronic invoicing should be revised to remove existing burdens and barriers to uptake. Paper invoices and electronic invoices should be treated equally and the administrative burden on paper invoicing should not increase. This measure is supposed to save about 18 million Euro yearly.

The authenticity and integrity of electronic invoices can also be ensured by using certain existing technologies, such as Electronic Data Interchange (EDI) and advanced electronic signatures. However, since other technologies exist, taxable persons should not be required to use any particular electronic-invoicing technology.

This Directive which was finally adopted at the Council of Ministers on July 2010, will have to be transposed by Member states by 31 December 2012 at the latest. States will adopt and publish the laws, regulations and administrative provisions necessary to comply with this Directive.