German federal cabinet passes tax simplification law and therefore accepts three processes for the eInvoicing
The German government opens up the third way for electronic invoices, however explicitly and exclusively names qualified signatures and EDI as particularly suitable processes
Düsseldorf, February 17, 2011 - The German federal cabinet passed the tax simplification law on February 2, 2011. With the law the government sets the implements the stipu-lations of the EU Council of Ministers of July 13, 2010 concerning the change in the EU Sales Tax Directive 2006/112/EC and defines corresponding changes for the German Sales Tax Law. These will apply from July 1, 2011 and enable companies to choose between three processes for securing the deduction of input tax with electronic invoices.
According to the requirement of the EU Council of Ministers the Federal Treasury Department accepts the following three processes for the electronic invoice exchange:
(1) Electronic signatures based on a qualified certificate
(2) Use of standardized EDI processes
(3) “other processes”, which guarantee the authenticity of the origin and intact condition of the contents (NEW)
In the tax simplification law the Federal Treasury Department opens up as a new “third way” the use of “other processes”, such as e.g. internal controls, thereby satisfies the stipulations of the EU administration. At the same time however the Department empha-sizes, especially in the substantiation of the tax simplification law (see substantiation for Article 5, Number 1, Letter b), that so far only the use of qualified signatures and the transmission by EDI process have been standardized. A guaranteed, standard EU-wide recognition of electronic invoices, without country-specific risks and expensive individual solutions, is currently only guaranteed on the basis of qualified signatures or EDI processes.
The Department, as by the way also the EU Council, leaves it completely open how the new “other processes”, such as e.g. internal control processes, have to be designed in order to guarantee the authenticity and origin of electronic invoices over the full storage period of 10 years. In addition there are substantial differences within the EU regarding the opinion of these “internal control processes”. An EU-wide harmonization of these opinions is not foreseeable.
In its substantiation the Federal Treasury Department additionally and explicitly points out (see substantiation for Article 5, Number 1, Letter a) that not just the invoice senders, but in particular also the invoice recipients have to be in the position to verify authenticity and integrity of an electronic invoice for the whole storage period.
Therefore, the new “third way” can only be taken into consideration for very selected cases such as e.g. group-internal cost transfers, static business relationships or very small closed user groups. With other, e.g. frequently changing customer-supplier relationships invoice recipients will hardly be able to rely on the fact that the sender has established suitable internal control systems and continuously used these for more than 10 years. Recipients will as a rule hardly be able to assume the risk that the recipient’s deduction of input tax will be revoked subsequently, because internal control systems are not or only sufficiently available at the sender. This substantially restricts the field of application of electronic invoices based on internal control systems.
As the Federal Treasury Department emphasizes in the new tax simplification law and its substantiation particularly the qualified signature offers a safe process for processing elec-tronic invoices conform with the law on a national and international level without the com-panies having to implement various country-specific procedures in order to verify authenticity and intact condition.
The Department explicitly states (in the substantiation for section 14 para. 3) that “electronic invoices, which are based on this process [qualified signature], are principally to be recognized through the Union for the purposes of deduction of input tax.”
In particular for internationally operating companies the tax simplification law which applies from July 1, 2011 means planning safety, investment safety and cost savings.
They can sign electronic invoices in a qualified manner and exchange these using only one single technical process, which is standardized internationally and recognized throughout the EU. The deduction of input tax is therefore secured cross-country. Expen-sive national isolated solutions and complex internal control systems, which are designed for the various national characteristic values, can be avoided at the invoice sender and recipient. The qualified signature is therefore not just the easiest, but at the same time the most cost-effective solution for meeting the legal stipulations.
The comprehensive AuthentiDate eInvoicing solution “SIGNAMUS”, available as inte-grated Cloudservice or as software for operation in the own computer center, meet the requirements of the actual and future EU Sales Tax Directive as well as the sales tax or tax simplification law.
You can find further information concerning the international, electronic invoice exchange by using qualified signatures under www.authentidate.de/en and www.signamus.de/en.
The tax simplification law is also available here for downloading (German version only).
About AuthentiDate
AuthentiDate (www.authentidate.de) is one of the leading providers in the fields of "Secure Data Exchange" and "Secure eHealth“.
As the inventor of the central mass signature, AuthentiDate offers efficient and innovative eInvoicing business process solutions, software, services and consultancy services using electronic signatures and time stamps. AuthentiDate software products and web-services (SaaS) have been used for years by leading global companies such as AIRPRODUCTS, ALCATEL LUCENT, BOSCH, DOW Chemical, E.ON, EnBW, JOHN DEERE, JP MORGAN BANK, METRO, TÜV, TELEKOM and UNITED INTERNET etc. Within the AuthentiDate eInvoicing Network millions of electronic invoices are processed each day.
AuthentiDate International AG is a certification service provider, certified by the German Federal Network Agency and operates a Trust Center in accordance with the German signature laws. Compliance with the strict requirements of the German signature law is proven through a testing and confirmation of the signature law, which includes fulfillment of the EU directive.
Contact:
AuthentiDate International AG
Rethelstraße 47
40237 Düsseldorf / Germany
Phone +49 211 – 43 69 89 0
Judith Balfanz, VP Marketing & Business Development
