Compliant invoicing planned?

@farbspiel I’m the author of the thread you linked. I know that David (author of the EU VAT Compliance plugin) already implemented an integration with the PDF Invoices and Packing Slips plugin. However, to make the invoices fully compliant, you will probably have to modify the template you use.

This is because, even though the PDF plugin provides many hooks that the EU VAT Compliance plugin can use, different countries require different layouts, and it would not be practical to implement them all within the plugin. Besides, merchants could be using a different PDF plugin, making things even more complex.

The EU VAT laws can be really painful (David and I know something about it).

Disclaimer
I’m the author of an alternative solution for EU VAT compliance. David (the author of this plugin) and I face the same challenges, as we work on two “brother” plugins. ??

Thanks, Diego.

@farbspiel – if there’s something specific that’s lacking, then you need to mention what it is… we’ve got a few settings for invoices already. But, I am not an accountant or lawyer, and have not been on any courses to learn about all the various possibilities across the EU.

The development of new features is mostly based upon users saying “I need this to comply locally”, and then describing in sufficient detail.

David

@david @deigo I understand your approach and the difficulty in implementing invoicing. As I wrote, it’s probably the bigger nightmare as there are not only different rates to consider, but totally different regulations in each country.

I found these two links about the topic that make it a bit more accessible:

https://www.taxamo.com/moss-invoicing-revealed/
https://www.taxamo.com/vat-on-eservices-invoicing/

From what I read, invoicing needs to be tightly integrated with the VAT solution as it involves different layouts per country and in some cases regulations concerning displayed currencies. I imagine that you need an invoicing template table similar to the tax rate table in WooCommerce to choose the right template per country automatically.

Personally, I don’t think it will be possible to do that. There are several reasons for that, both technical and practical:

– The layout of the PDF Invoicing plugin is a physical file, which cannot be changed via settings. The template has to be modified to have a specific layout, and this is something that must be done manually.
– It would be madness trying to provide 30+ templates to please the various authorities and maintaining them constantly. I have customised three layouts so far, all of them for Danish customers, and they were all different. There isn’t a “one size fits all” solution. The responsibility of compliance is still on merchants’ shoulders, the plugins should be seen as facilitators.
– There are many invoicing plugins on the market, and they all work differently. One of the leading PDF plugins doesn’t even allow to change the layout at all, if not with a good deal of coding. Preparing 30+ layouts for each of those plugins would require a titanic effort.
– Merchants like to have control over their documents, therefore they would need adjustments to what they already have, not a generic, “should be compliant” layout.
– Customising a single invoice layout for one a customer at a time is a much simpler approach.
– Last, there is the matter of viability: both our plugins are free of charge, therefore we must keep them simple, or their maintenance costs would increase too much.

Note: all the above is based solely on my personal opinions and my business model.

Hello. This invoice format compliance bothers me as well. Did you find any info on an authoritative website about such an obligation for a merchant. I don’t think that the big marketplaces (Apple, Google, Amazon, PayPal, etc.) issue country-specific invoices. In my personal opinion, the tax authorities in the respective EU countries won’t initiate any action against the merchant for issuing an invoice that doesn’t cover their invoicing requirements at 100%, as long as you pay them the VAT due. I think that the most common format which clearly states the purchase price without VAT, the VAT rate and the VAT amount would satisfy them all.

Also, have any of you found info (maybe on an EU site) listing these invoicing requirements for each EU country?

@diego @quanto I agree that invoicing is not top priority right now, and I agree that this is challenging. BUT it is required by law and I think it’s doable.

Here is the Guide to the VAT mini One Stop Shop released by the EU Commission: https://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/telecom/one-stop-shop-guidelines_en.pdf

On page 24, it says:

“Invoicing
In relation to invoices, the rules of the Member State of consumption apply. Therefore taxable persons will need to ensure that they are aware of the relevant rules in Member States where they make supplies to consumers. Information regarding Member States’ rules on invoicing will also be made available on the Commission website.”

@diego The plugins are not free. I bought the premium version of David’s plugin yesterday. ??

The “simple” way of implementing invoicing is indeed to have 28 templates (one for each country) and choose the right one case-by-case, just like the tax rate is chosen. The main work is to create the templates and to keep them up-to-date with the changing national regulations. But technically, this should be fairly simple. Correct me if I am wrong here.

A few other factors and thoughts…

My preferred invoicing plugin is https://www.ads-software.com/plugins/woocommerce-pdf-invoices-packing-slips/ (not a hard choice – it has few competitors – really only one, AFAIK, and it’s inferior). The author of this sells a premium version, which lets you create any templates that you wish. This is his main source of income, as far as I understood. He also indicated that the ability to create customised invoice templates to comply with specific local tax laws was the main reason why people buy his premium version (which is not expensive).

The blurb on the plugin page for my plugin contains this related part:

(If in the EU, then you will also need to make sure that you are issuing your customers with VAT invoices containing the information required in your jurisdiction, via a suitable WooCommerce invoice plugin).

Actually, I’m not sure that someone needs to produce 28 different templates. I think all of us are mostly guessing about a number of things, but from my own amateur investigations and guesses, I think that most of the regulations are of the “most contain X” variety. If you add up all the different items that come under “X” for all the countries, then you can probably produce just one template that contains nearly all of them. (The only complication I specifically know of is when one local law (e.g. for the buyer country) says “you must show taxes in prices converted into our currency” and another local law (e.g. for the seller country) says the same, for their currency. I’m aware that this requirement (at the buyer’s end – this is already a solved problem at the seller’s) exists for Poland and Romania (i.e. you must show amounts in their currencies), and have a “to do” item that will be worked on for that (since that is a natural extension of our existing feature for showing the converted amount in the seller’s currency).

In summary, the combination of…
1) The existence of an existing solution that will take you most (I know, not all) of the way, and
2) The fact that duplicating that existing solution will eat up a significant part of the income of another plugin author, and that he’s only become aware of this issue in the last few weeks, and hasn’t had a huge amount of time to adapt to this new situation, and
3) The fact that this is flagged up on the plugin description for this plugin….
… makes this a fairly low priority item to look at at the moment, for me. I’m not ruling it out. But, currently I’d rather see the author of the invoicing plugin produce the templates as part of his own solution and business, rather than muscle in on his territory. I think he’d be able to do that quicker and more efficiently than I could anyway. All in all, I see the importance of the matter – but the natural place to go for the most efficient solution that keeps everybody happy and likely to get the speediest solution is going to him and asking him for his views, in my opinion.

David

Actually, I’m going to give Ewout a shout and see if he wants to chime in. The more I think about this, the more I reckon he mat well welcome the business opportunity to produce ready-made templates as part of his own premium offering.

I removed the “invoicing following client’s rules” from the to-do list after a four hour conversation with my contacts around Europe, because it doesn’t make sense to develop it. It’s a long story, but it boils down to the following: the seller has to report to his Revenue office, not client’s. Revenue offices from other countries expect their citizens to provide invoices in their local currency, using their rules and their specific exchange rates. Those rules and exchange rates are not set in stone, and there are exceptions that other countries’ citizens can follow.

To make an example, as an Irish merchant, I have to provide my revenue with both purchase and sale invoices in Euro. Whether I bought or sold in Dollars, Pounds, Yen, it’s irrelevant: I, and only I, am responsible to provide amounts in Euro, using a source of exchange rates approved by the Irish Revenue. My contacts were told exactly the same by their respective offices:
– Portugal wants an invoice in Euro, with the amounts converted using the exchange rates provided by any of their banks (so there’s a possibility to choose the most advantageous one).
– Poland wants an invoice in Zloty, with the amounts converted using their Central Bank exchange rates.
– Romania wants an invoice in Leu, with the amounts converted using their Central Bank exchange rates.

It’s the buyers who have to bring those purchase invoices to their revenue offices, and it’s their duty to convert them properly. Polish revenue doesn’t have any authority to come to me and ask why I didn’t provide a purchase invoice in Zloty to one of their citizens. Even if I did, there is a chance that such invoice would be incorrect (they can’t expect me to keep track of all exchange rates of all the countries), so the buyer would have to review it anyway.

@farbspiel I won’t go into a long discussion because this is not the right place, but the plugins (both this one and the one I developed) are free and 100% usable. I’m just pointing it out because I would rather not see David’s and my efforts being seen as a trick to provide a “crippled” version of a product just to sell another. In fact, none of my users spent a penny so far, they just wrote me to thank me for the plugin. Not a complaint, just a friendly clarification ??

@david that’s a good idea, I was actually thinking the same. I will let you go ahead, you can get in touch if you need. I don’t think there is a point in sending two almost identical emails. ??

I am the author of the WooCommerce PDF Invoices & Packing Slips plugin.
I will need to do more research as to what the implications would be.

Unfortunately it’s not always as simple as ‘must contain X’, from all the customization work that I have done to date I know that it’s often also ‘should be formatted like this’, which may be conflicting between countries. There’s an even bigger issue with the fact that in some countries it is not allowed to create/send your own digital invoices, for example Hungary, see this thread. I have also been told that it is not possible to generate invoices according to Polish law with the plugin, although I am not sure which requirements cannot be fulfilled.

I’m also not sure if I want to take such a heave responsibility, since I am only a sole trader.

I will post here once I know more, but that will most likely not be before the end of the month.

Thanks, Ewout.

From the (very) little reading I’ve done, it’s intended that some of these laws will be harmonised. So, I think that in some cases, it’s likely that current requirements will not be enforced very strictly. So it would probably be worth concentrating on the main requirements first, before looking too much at the curiosities – by the time you look at the curiosities *and find someone actually enforcing them*, they may be changing!

David

@ewout it’s true that invoices have different requirements, that’s why I still think that different layouts are the answer. Of course, I would not advise to provide a a “compliance guarantee”, because that would be impractical, but it should definitely be possible to prepare some basic layouts that can be used as a starting point by merchants in different countries.

Regarding Poland, it is possible to generate invoices according to the Polish law, but, as I wrote, it’s a a duty of Polish merchants only. That is, foreign sellers don’t have any duty or responsibility to provide their customers with an invoice that complies with Polish standards. For example, as an Irish seller, I have to report to my Revenue Office in Euro (i.e. my sale invoices must show the amounts in Euro). A Polish buyer has to report to his Revenue Office in Zloty (i.e. his purchase invoices must show the amounts in Zloty). It is my duty to convert my USD sale invoices to Euro, and buyer’s duty to convert the USD purchase invoices to Zloty.

From what I see, the confusion arises from the fact that many people think of the new law of something like “you must now report to all of us“, when it’s not the case.

That is, foreign sellers don’t have any duty or responsibility to provide their customers with an invoice that complies with Polish standards.

I thought the main point of the new EU VAT law was that, under it, the transaction is going to be treated as having taken place in the location of the buyer, not the seller.

Which is ridiculous, of course – it’s a legal falsehood. I’ve never been to Poland. But through the wonders of the EU, these legal falsehoods can become reality, because the EU is treated as the more-ultimate entity than the individual nation states.

So, my understanding was that *technically* the seller has to comply with Polish standards, but *pragmatically* there’s going to be a very light regulatory touch on some matters until the standards have been harmonised a bit more. Though of course, no state official is ever permitted to say “this bit won’t be enforced for now”, blah blah blah…

Thanks for clarifying guys, definitely helpful information!