EN 16931, the European standard for electronic invoicing, stands as a cornerstone of the European Union’s digital transformation in financial and tax procedures. Published in 2017, this standard aims to harmonize electronic invoicing across the EU, driven by Directive 2014/55/EU, which mandates e-invoicing in public procurement. It defines the essential and optional components of an e-invoice and provides structural guidance using machine-readable XML formats. The standard’s role is further amplified by its integration into the VAT in the Digital Age (ViDA) reform package, approved in 2024, and its underpinning of individual member states’ e-invoicing mandates, such as those in Germany, Poland, Belgium, and France. However, recognizing its initial focus on business-to-government (B2G) transactions, revisions are underway to enhance its applicability to the more complex business-to-business (B2B) landscape.
At the heart of EN 16931 lies the interplay between its semantic data model and syntax. The semantic data model defines the “what” of an e-invoice, comprising over 160 data fields representing key information elements like invoice number, date, addresses, and VAT amounts. These elements are defined with clarity and universality to ensure seamless interpretation across diverse systems and countries. The syntax, conversely, defines the “how,” specifying the technical rules for representing this information in a machine-readable format. It dictates how elements like the invoice date should be formatted (e.g., YYYY-MM-DD) to guarantee compatibility. The standard supports two syntaxes: Universal Business Language (UBL) and UN/CEFACT Cross Industry Invoice (CII). UBL, developed by OASIS, offers a broad range of business document support, while CII, developed by UN/CEFACT, provides a more specialized and detailed framework for e-invoicing.
While EN 16931 provides a unifying framework, it acknowledges the diversity of national regulations and business practices. This is addressed through Core Invoice Usage Specifications (CIUS) and extensions. CIUS tailor the standard’s core model to specific country or sector needs without introducing new elements. They effectively customize the standard by making optional elements mandatory or specifying particular formats to align with local regulations, exemplified by Peppol BIS Billing 3.0 and Germany’s XRechnung. Extensions, on the other hand, allow for the addition of new elements not present in the core model but required for specific business processes or industries. The XRechnung Extension, for instance, caters to the German construction industry, permitting detailed sub-invoice lines and embedded GAEB information. This combination of CIUS and extensions allows for a flexible and adaptable standard capable of accommodating the varied requirements across the EU.
The ViDA reforms significantly impact the definition and implementation of electronic invoicing. From July 1, 2030, an electronic invoice, according to ViDA, must contain all VAT Directive-required information and adhere to the EN 16931 structured electronic format. While member states retain some flexibility, e-invoicing will become the default system. Critically, ViDA mandates e-invoicing and digital reporting for cross-border intra-EU transactions, requiring all VAT-registered businesses, both within and outside the EU, to issue structured e-invoices and report specific details to tax authorities. To accelerate domestic adoption, member states will be permitted to mandate EN 16931-compliant e-invoices for domestic transactions and require customer acceptance from 20 days after the reform package’s publication, expected in the first half of 2025.
The evolution of EN 16931 is crucial for its effectiveness in the B2B sphere. While initially designed for B2G transactions, the standard’s current version lacks certain functionalities essential for B2B invoicing. These include referencing multiple purchase orders, managing VAT for split payments, incorporating prompt payment discounts, handling multiple delivery addresses, accounting for disbursements, and including third-party information. Recognizing this gap, the European Committee for Standardization is poised to release an updated version in the first half of 2025 specifically designed to address these B2B requirements. This update will be instrumental in facilitating the wider adoption of e-invoicing in the B2B context.
In conclusion, EN 16931 signifies a crucial step in the EU’s digital transformation, moving beyond a mere technical standard to become a catalyst for harmonizing and streamlining financial processes. Its role in facilitating interoperability and supporting the ViDA reforms positions it as a cornerstone of the EU’s digital VAT ecosystem. The forthcoming update, addressing the intricacies of B2B transactions, will further solidify its importance in the ongoing transition towards a fully digitalized e-invoicing landscape. This comprehensive approach, combining a unified framework with the flexibility to adapt to specific national and industry needs, sets the stage for a more efficient and integrated European market.
