EESPA Standard: E-Invoicing Compliance Definitions and Responsibility Allocation Framework

EESPA, the European E-invoicing Service Providers Association, recently published EESPA Standard Definitions for Legally Compliant Electronic Invoicing and their usage.

This document aims to provide a basis for e-invoicing service providers and their customers to agree on allocation of responsibility of the legal compliance of processes supported by the services. These standard definitions will contribute to clearer agreements, encourage best practice and ensure professionalism in the e-invoice industry.

In most European countries, e-invoicing service providers can offer different options for VAT compliance processes; any such offering is an individual competitive choice of the service provider. Regardless of which VAT compliance process is used, it’s important to clearly define which party is legally responsible for the supported processes. EESPA’s standard definitions aim to provide a basis for an agreement on allocations of responsibility, which will identify the tasks that each party will be accountable for.

In developing the standard definitions document, EESPA’s Public Policy and Compliance Working Group (PPCWG) started by focusing on key definitions or concepts that are relevant to compliance-related topics that typically arise in the context of e-invoicing.

Based on these definitions, the document provides a predefined ‘Responsibility Matrix’ that can be used for the management of responsibility between a service provider and its customer. Among the suggested components that should be considered between service providers and their customers in a compliant electronic invoicing process are:

• Invoice content requirements, including the requirement to determine the applicable VAT law of an invoice
• Invoice process and form requirements, such as notification and requirements for prior approval
• Contractual requirements, e.g. interchange agreement or e-invoicing buyer consent requirements
• Requirements for real-time invoice communication with the tax administration, such as clearance of the invoice and real-time reporting
• Audit and periodic reporting requirements
• Data privacy compliance requirements that aim to ensure compliance with applicable data privacy law, such as GDPR

The aforementioned ‘Responsibility Matrix’ provides user guidance that enables parties to agree and document which party has the responsibility for each compliance component: monitor relevant requirements, implement and maintain measures to ensure continued compliance, and compliance assurance to confirm compliance of the measures taken.

Using these standard definitions and the ‘Responsibility Matrix’ will lead to clearer agreements and ultimately better relationships between customers and service providers. The document can also serve as a check-list companies can use for RFIs or RFPs designed to compare service provider offerings.