New Belgian legislation on e-invoice and e-archiving

The federal Belgian council of minsters recently approved a draft proposal that will be submitted to the Parliament in September. It aims at further simplifying electronic invoicing and archiving for paper and electronic invoices. The draft law implements the European Directive 2010/45/EC of 13 July 2010 amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing. The goal is to have the new rules in place as from 1st January 2013.

From the 1 billion invoices that are yearly issued in Belgium, it is estimated that approximately 40% are business-to-consumer (B2C) and 60% are business-to-business (B2B) invoices. Of these, the Federation of Belgian Companies (VBO-FEB) estimate that only 1% of these invoices are exchanged electronically.

Since the introduction of e-invoicing into Belgian legislation, the adoption rate of e-invoicing has remained rather slow. There are many reasons, but one of the main ones is that the technological and security requirements are perceived as complex. This leads to confusion and uncertainty about legal compliance for e-invoices in general and also about archiving of paper and electronic invoices.

In 2010, the legislation was simplified. Under that simplified legislation, companies are free to choose the technical means how they will exchange and archive electronic invoices. No specific methods are recommended by the VAT administration. However, the core of the legislation remains. Both senders and receivers of e-invoices must still be able to guarantee the authenticity, integrity and legibility of the invoices. This is a legal requirement at the time of sending as well as throughout the archiving period. Both paper and electronic invoices must mention certain legally mandatory items such as name and address of the supplier, VAT rate, amount, description of the goods/services, etc.

In order to promote the uptake of e-invoicing, paper and electronic invoices must be treated equally. That should be realized by this proposal of the new law. Without going into detail, some of the highlights are the following:

• The type of electronic format is irrelevant. It is possible that an invoice is created and issued in a format x and received and processed in another format y.

• Invoices in an electronic format (structured messages in XML, FINVOICE, PDF, Word or other) issued and received in electronic form, e.g an e-mail with a pdf attachment, an electronically received fax, an invoice downloaded via a website, etc are also considered as electronic invoices.
• There does not have to be a prior nor written agreement between sender and receiver about e-invoicing. However, one must be able to demonstrate a prior agreement to the VAT administration. Therefore it is still advisable to have a written prior agreement.
• Last but not least, the draft law intends to simplify also the requirements about archiving of invoices.

The draft law proposal may still be amended in the Belgian federal parliament. We will keep you updated in September, after the parliamentary recess.