EN 16931 is a common term within the realms of electronic invoicing standards throughout Europe. Understand what the term means, the benefits and how it’s used across Europe by the Member States.
What is the EN 16931 standard?
The EN 16931 standard is a European norm that defines the technical specifications for the content and format of electronic invoices, established by the European Committee for Standardisation (CEN) in 2017. Initially known as the European Standard on Electronic Invoicing (ESI), it has developed to become EU Directive EN 16931.
The aim of the standard is to harmonise electronic invoicing (e-invoicing) across the European Union, meaning that Member States have a standardised format, implementation and specification criteria to adhere to. By harmonising the format of electronic invoices and their implementation process, Member States can easily facilitate cross-border trade and transactions. The standard can be used in both business-to-government (B2G) and business-to-business (B2B) transactions.
What are the compliance levels for the EN 16931 standard?
The European Commission details three areas that make up the EN 16931 standard, each crucial for ensuring seamless e-invoice exchange within the EU:
- The invoice document
- The implementation
- The specification
The invoice document
In order to be considered compliant under the standard, the electronic invoice document must adhere to the rules defined for the CORE invoice or the CIUS (Core Invoice Usage Specifications) specification that it is based on.
- "CORE" represents the core invoice data model defined in the European Norm (EN) 16931-1. It encompasses the essential elements of an invoice and provides a syntax-independent framework for defining invoice requirements.
- "CIUS" stands for Core Invoice Usage Specification, which is an extension of the core invoice data model. CIUS further defines and refines the invoicing norm base, allowing for additional data elements and specifications beyond the core model. For example each EU Member State can define its own CIUS to address specific legal, regulatory, and business requirements not covered by the core standard. This allows countries to include additional data elements or specific formats needed for compliance with local laws, such as tax reporting, public procurement, or industry-specific regulations.
This means that the electronic invoice must contain all mandatory information, it must be structured as specified, the amounts must be calculated as specified and the invoice’s elements must only contain allowed values, such as codes.
The implementation
The European Commission details two aspects within the implementation criteria.
- Firstly, a compliant receiver of an electronic invoice must accept and process all invoices that conform to the European e-invoicing standard CORE data model or a CIUS. This ensures that any optional information included by the sender, as allowed by the CORE or relevant CIUS, will be properly processed and not rejected.
- Secondly, a compliant sender must be able to generate electronic invoices that adhere to the European e-invoicing standard or a CIUS.
The CIUS that a specific sender or receiver must or can use may be restricted by the EU Member State where they are registered, through the Member State's legal adoption of Directive 2014/55 on electronic invoicing in public procurement.
The specification
When an invoice document and its implementation are based on a CIUS, that CIUS must meet the criteria in section 4.4.2 of EN 16931 part 1. Essentially, these criteria ensure that the CIUS is a subset of the CORE and follows all CORE rules. This means anyone who can receive and process the full CORE can also handle any compliant CIUS, however this does not apply vice versa, meaning that a CIUS receiver may not be able to receive and process invoices that comply to the CORE or any other CIUS.
What are the benefits of adopting the EN 16931 standard?
One single standard creates simpler interoperability, validity, and integrity of electronic invoices, facilitating cross-border trade by ensuring that e-invoices comply with the same requirements across EU Member States. By adhering to one format, businesses within the European Member States can significantly reduce processing errors which in turn creates faster payment cycles and greater operational efficiency. One standard means one processing format, which allows businesses to easily feed the electronic invoices into their accounting systems and ERP platforms for further processing and payment, reducing the need for manual intervention and the risk of data entry errors.
Even though the EN 16931 standard has clear benefits, the standard still has variations used across the Member States.
The use of the EN 16931 standard
The EN 16931 standard can be implemented using the Universal Business Language (UBL) or Cross-Industry Invoice (CII) formats, as well as local formats (CIUS) such as FatturaPA in Italy or Factur-X in France. Compliant formats are designed to meet the criteria set out in the standard and enable businesses to generate and exchange compliant electronic invoices seamlessly.
But why do variations exist?
The EN 16931 standard facilitates the use of different syntaxes. The standard acts as a guideline, to ensure that certain formatting, implementation and specifications criteria are met, but then allowing flexibility for Member States to tailor the standard to fit their needs, such as different taxation aspects, business needs and technological capabilities. Here are some of the more commonly used formats:
- Factur-X (identical to its German equivalent, formerly known as ZUGFeRD): Factur-X is a hybrid electronic invoice format that combines both human-readable PDF and structured XML data in a single document. This format ensures that invoices are both visually appealing and machine-readable, improving efficiency and compliance with e-invoicing standards.
- FatturaPA: is the official format for electronic invoices in Italy, specifically designed for transactions involving public administrations and, later, extended to all business-to-business (B2B) and business-to-consumer (B2C) transactions. It is an XML-based format and includes a predefined set of data elements, ensuring consistency and compliance with Italian regulations.
- Other local formats: In addition to the examples provided above, businesses can also use local or industry-specific formats tailored to their operational needs. These formats may be based on regional regulations, industry standards or specific business requirements.
By offering a variety of formats for implementing the EN 16931 standard, businesses have the flexibility to choose the most suitable option based on their internal systems, trading partners' preferences, and compliance requirements. Exploring these variations can help businesses streamline their invoicing processes and ensure seamless interoperability with partners across different sectors and regions.
Understand even more about electronic invoicing
Understanding electronic invoicing can be a complex task, which is why at Banqup, we make it simpler for you.
To get started on understanding electronic invoicing, its use throughout Europe, and the variations of formats and processes, take a look at our on-demand Introduction to Electronic Invoicing and Tax Compliance webinar. Explore the basics of e-invoicing and learn how it’s used in practice, not only in Europe, but all over the globe.
