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| Potential savings of € 18.4 billion with electronic invoicing! | In Sweden and the EU work is in progress to reduce the administrative load on companies. The EU has set a goal to reduce the cost to companies of administrative red tape by 25% by 2012.
Unfortunately development is going in the wrong direction despite a number of areas for simplification having been identified. In the Commission's communication regarding ongoing work, electronic invoicing is identified as a potential area of saving estimated to be as much as € 18.4 billion. This simplification alone amounts to over 50% of the total savings identified.
The EU Commission has also concluded that "Electronic procurement and invoicing could result in savings in total procurement costs of around 5% and reductions in transaction costs of 10% or more, leading to savings of tens of billions of euros annually”.
There is a political ambition in Sweden and the EU to promote the single market and there is no doubt that e-invoicing is an important part of a functioning cross-border trade.
In spring 2009, the Commission submitted a proposal that e-invoicing should be compared to paper invoices and the EU Member States may not by law require different forms of security solutions for implementing e-invoicing. Choice of the security solution should instead be left to the parties. Sweden and Finland have long applied such unrestricted e-invoicing and have also been the countries within the EU which could utilize the potential e-invoicing offers to trade between countries. In contrast, Swedish companies’ trade with businesses in other EU countries is made more difficult when those countries demand different security solutions.
The EU Commission's proposal, which we welcomed and expressed our support for, has, however, met with resistance from a number of countries. These countries are afraid that this simplification could lead to tax evasion, despite the fact that the fraud has been identified with paper invoices and not with e-invoices. Experience from the Swedish market shows, on the contrary, that fiscal control opportunities are improved when buyers and sellers exchange business transactions electronically. Opponents are, of course, eagerly encouraged by electronic signature companies who see a lucrative future in increased bureaucracy.
It is in this context important to point out that the legal requirements for market participants should be technology neutral. It is also important to note that the invoice is not an isolated phenomenon but part of a larger business process that usually begins with an order and ends with a payment. The focus should be on proper accounting and good internal control of the business process as a whole, not on detailed technical requirements for the distribution of electronic invoices. The fact that an invoice has an electronic signature during the actual transfer does not ensure that the invoice is properly managed, booked, and accounted for value added tax by the business partners.
During the debate there have been proposals to treat paper invoices the same as e-invoices by introducing the possibility to make the same high security demands on the paper invoice that today can be made on the e-invoice. This would, in addition to increasing uncertainty in the market, create heavy administrative burdens for organizations and enterprises in Europe when requirements on all billing are made more stringent. The proposal currently on the table during the Spanish presidency is not at all in line with the EU Commission's proposals and includes, amongst other things, examples of different security solutions for e-invoicing. This may, in our view, be taken as an excuse to maintain and require different forms of national security solutions which in turn is likely to hamper cross-border trade within the EU. One particularly vulnerable group are small and medium-sized companies who are presumed to know and deal with these different security solutions. During the ongoing political negotiations on the issue under the Spanish presidency, Sweden must firmly oppose all forms of bad compromises, and work to implement the Commission's original proposal. Any possibilities for Member States to require different forms of security solutions for implementing e-invoicing should be removed and the Member States which currently apply unrestricted e-invoicing must continue to be able to do so.
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