European businesses should not adopt an
“anything goes” attitude to invoicing while current European Union
(EU) legislation does not force e-invoicing migration as tax
authorities are catching on to the potential the payment method can
bring.

The warning comes from professional services
firm Ernst & Young in its Indirect Tax Briefing report
dated April 2011.

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When commenting on the EU’s 2010/45/EC VAT
Directive, which requires paper and electronic invoices to be
treated equally and as such does not impose e-invoicing on European
businesses, Ernst & Young believes this should not lead to
businesses adopting an “anything goes” policy nor should they want
that. Rather they should ensure an appropriate level of business
controls is in place.

“The key issue is being in control,” said the
report”

“Merely issuing, sending, receiving and
archiving .pdf invoices, without any additional measures, will not
necessarily be sufficient. However, in our view, Member States will
not longer be able to bar such formats if the appropriate business
controls are in place.”

It is Ernst & Young’s view businesses
should document not only their invoicing and archiving flows but
also the measures that guarantee integrity and authenticity.

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“Tax authorities are also starting to realise
[invoicing] automation beings potential for more in-depth and more
efficient audits through data mining,” said the report.

“This trend will only increase the need for
VAT taxpayers to ensure their invoicing processes are accurate,
well-documented and well-controlled.”