Brussels, 17 December 2012
New VAT rules to make life easier for businesses from 1st January 2013
From 1st January 2013, new EU VAT rules enter into effect, which will make life much simpler for businesses across Europe.
First, electronic invoicing will have to be treated the same as paper invoicing, enabling companies to choose the VAT invoicing solution that works best for them. This has the potential to save businesses up to €18 billion a year in reduced administration costs.
Second, Member States will be allowed to offer a cash accounting option to small businesses with a turnover less than €2 million a year. This means that these SMEs will not have to pay the VAT until it has been received by the customer, thereby avoiding cash-flow problems for them.
Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "These new VAT rules reflect what businesses in Europe need today: simpler procedures, reduced costs and support in applying solutions that best meet their needs."
The second Directive on VAT invoicing was adopted in July 2010, and must be applied in all Member States from 1st January 2013. It aims to simplify rules on VAT invoicing to reduce burdens and barriers for businesses.
Electronic and paper invoices are placed on an equal footing, with common rules, under the Directive, in order to promote the uptake of e-invoicing. Member States will no longer be allowed to set pre-conditions for the use of electronic invoices, such as e-signatures, and invoices will be allowed to be electronically stored.
In addition, the new rules give, Member States the option of allowing small businesses with a turnover under €2 million to declare and pay their VAT when they receive or make payments , rather than at the time of the invoices. In view of the long delay that can occur between invoicing the customer and receiving payment, in particular for small businesses, this will provide them with relief in terms of cash flow.
The transposition of VAT invoicing rules in the EU 27 Member States is also a key action under the Digital Agenda for Europe.
For a full explanation of the main VAT invoicing rule changes as from 1st January 2013, see:
For Commissioner Šemeta's website, see: