The European Commission has announced they are proposing a review of the VAT rules on invoicing with a view to reduce burdens on business and to help EU members tackle fraud.

On Wednesday the EC adopted a proposal to change the VAT Directive 2006/112/EC in respect to the invoicing rules, as the aim is to increase the use of electronic invoicing.

The proposal eliminates the current barriers to e-invoicing in the VAT Directive by treating paper and electronic invoices equally.

"Current national VAT invoicing rules are excessively complicated and disparate. This has led to unnecessary administrative burdens on businesses operating cross-border and has also facilitated VAT carousel fraud," Laszlo Kovacs, Commissioner for Taxation and Customs, said.

Today's important initiative will put forward much simpler, more modern and comprehensive rules for invoicing, whilst allowing tax administrations effective means of control. Paper and electronic invoices will be treated equally which will allow businesses to move to a 100% e-invoicing systemВ  and to save up to 18 billion euros across the EU," the commissioner added.

The Commission said they believe it is necessary to increase the up-take of electronic invoicing, by removing the pre-conditions of advanced electronic signatures or electric data interchange (EDI) for sending invoices electronically. Moreover, the electronic storage of invoices will be allowed, even if the original invoice is in paper format, and common storage periods are set.

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