EN 16931 is the European standard for electronic invoicing, published in April 2017 by the European Committee for Standardization. It was developed to address the need for a unified framework for transmitting electronic invoices to public authorities across the European Union. This initiative was driven by Directive 2014/55/EU, which mandates the use of electronic invoices in public procurement processes. The standard outlines specifications for invoice content, defining the mandatory and optional elements that an e-invoice must or may include, and provides guidance on structuring these elements within machine-readable XML formats.
EN 16931 is set to play a pivotal role in the implementation of the European Union’s VAT in the Digital Age (ViDA) reform package, which was approved by the ECOFIN Council on November 5, 2024. Additionally, it underpins the country-specific e-invoicing mandates being introduced across various EU member states, such as Germany, Poland, Belgium and France. However, the current version of the standard has limitations in addressing the requirements of business-to-business (B2B) transactions. To bridge this gap, revisions are underway to incorporate additional elements that will enhance its applicability to B2B scenarios.
Understanding the core elements of EN 16931: semantic data model and syntax
The EN 16931 standard defines both the semantic data model and the applicable syntaxes for electronic invoices. A semantic data model refers to a structured set of information elements representing the key components of an electronic invoice. EN 16931 includes over 160 semantic data fields, which describe various business terms such as invoice number, date, seller address, VAT amount, and more. These elements are defined in a manner that ensures their meaning is clear and universally understood, regardless of the format in which the data is represented. The primary purpose of the semantic data model is to enable the accurate interpretation of e-invoice data by both the sender and the recipient, even when they operate across different systems, sectors, or countries.
Syntax, on the other hand, refers to the structure or format used to represent the semantic data model’s elements in a way that can be processed by computers. While the semantic data model specifies the “what” (the content and meaning of the information), the syntax focuses on the “how” (the technical rules for representing the information in a machine-readable format). For instance, an invoice may include the semantic element “invoice date,” but the syntax will define how that date should be formatted, such as “YYYY-MM-DD” or “DD-MM-YY,” to ensure compatibility with specific systems.
The EN 16931 standard identifies two syntaxes compatible with its semantic data model: the Universal Business Language (UBL) and the UN/CEFACT Cross Industry Invoice (CII). UBL, developed by the Organization for the Advancement of Structured Information Standards (OASIS), is a comprehensive library that supports a wide range of business documents, including invoices, purchase orders, shipping notices, and more. Its extensive coverage allows businesses to standardize and automate various processes across different document types, making it an excellent choice for organizations seeking to streamline operations beyond invoicing. CII, developed by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), is specifically designed for electronic invoicing. It provides a more detailed and comprehensive framework compared to UBL, making it better suited for businesses with complex invoicing requirements that involve diverse data elements. As part of the “Cross-Industry family of deliverables” developed by UN/CEFACT, CII ensures interoperability with other UN/CEFACT standards. For businesses already using UN/CEFACT-based systems, implementing CII may be more straightforward due to the existing compatibility.
Customizing EN 16931: core invoice usage specifications (CIUS) and extensions
While the EN 16931 standard provides a common framework for electronic invoicing across the European Union, each country has unique tax laws, invoicing practices, and compliance requirements. To adapt the standard to their specific needs, countries issue core invoice usage specifications (CIUS) and extensions.
A CIUS is a set of guidelines that customizes the use of elements in the core invoice model to meet the requirements of particular countries or business sectors. A CIUS cannot introduce new elements beyond those defined in the core invoice model. Since a CIUS is always a subset of EN 16931, it remains fully compliant with the standard. Examples of CIUS include Peppol BIS Billing 3.0, a widely adopted specification for cross-border invoicing, and XRechnung, the German implementation of EN 16931. A common application of CIUS involves modifying optional elements from the core model to make them mandatory to comply with local regulations. For instance, in the EN 16931 core model, the only mandatory address element for both the seller and buyer is the country code, while the city and postal code are optional. However, this does not align with German VAT regulations, which require additional address details. To address this, the XRechnung CIUS mandates the inclusion of both the city and postal code in invoices.
In contrast to CIUS, extensions are used to add new elements to the EN 16931 standard that are not part of the core model but are necessary for specific business processes or industry requirements. Extensions must align with the semantic definitions of the core model and are employed only when required by specific business partners or sectors. An example of an extension is the XRechnung Extension, which was developed to meet the unique requirements of the construction industry in Germany. This extension allows for the addition of multiple sub-invoice lines beneath a single invoice line to reflect detailed contractual specifications. Furthermore, it supports embedding XML files as attachments within the invoice to include GAEB (Gemeinsamer Ausschuss Elektronik im Bauwesen) information, a standard used in the German construction sector.
By enabling the customization and expansion of EN 16931 through CIUS and extensions, the standard remains flexible and adaptable to diverse regulatory, business, and industry-specific needs across the EU. This ensures that electronic invoicing processes meet both the common framework’s objectives and the localized requirements of individual countries and industries.
ViDA reforms and the new definition of an electronic invoice
The ViDA reforms introduce a new definition of electronic invoices, effective from July 1, 2030. Under this definition, an electronic invoice is one that contains all the information required by the VAT Directive and is issued, transmitted, and received in a structured electronic format compliant with the EN 16931 standard. While electronic invoicing will become the default system for issuing invoices within the EU, member states will retain the option to allow alternative formats for certain types of transactions.
One of the most significant aspects of the ViDA reforms is the introduction of mandatory e-invoicing and digital reporting for cross-border intra-EU transactions. From July 1, 2030, all VAT-registered businesses will be required to issue structured e-invoices for B2B sales across EU borders. Once an e-invoice is issued, the supplier will need to digitally report specific details from the invoice to the relevant tax authorities. These requirements will apply universally to businesses engaged in EU cross-border trade, regardless of whether the businesses are based within the EU or outside it.
Although mandatory digital reporting and e-invoicing for intra-EU transactions will not take effect until July 1, 2030, the ViDA reforms introduce interim measures to encourage the adoption of e-invoicing for domestic transactions at an earlier stage. Beginning just 20 days after the publication of the reform package—expected in the first half of 2025—EU member states will be allowed to mandate the issuance of EN 16931-compliant electronic invoices for domestic transactions without requiring prior authorization from the EU Council. Furthermore, from this date onward, member states may also impose requirements for customers to accept electronic invoices.
Enhancing EN 16931 for B2B transactions
The EN 16931 standard was originally developed with a focus on business-to-government (B2G) transactions rather than B2B sales. While EN 16931 has proven effective for B2G invoicing, its current version is not fully suited to the complexities of B2B transactions. B2B invoicing often involves additional elements and requirements that are not addressed in the existing standard. Several features essential for B2B invoicing are absent in the current version of EN 16931, including:
- Multiple Purchase Order References: The ability to reference multiple purchase orders consolidated into a single invoice.
- VAT Amount for Split Payment: Information about the VAT amount subject to split payment arrangements.
- Prompt Payment Discounts: A mechanism to specify a discount percentage that reduces the invoice amount if payment is made within a defined timeframe.
- Multiple Delivery Addresses: The inclusion of delivery address details for goods or services delivered to multiple locations.
- Disbursements: Costs incurred on behalf of third parties (e.g., amounts paid to suppliers on behalf of customers), which are invoiced without charging VAT.
- Third-Party Information: The ability to include information about third parties, such as platform operators, which may be necessary in B2B transactions.
Recognizing these limitations, the European Committee for Standardization has announced plans to release an updated version of EN 16931 in the first half of 2025. This new version will specifically address the requirements of B2B invoicing, introducing the necessary features to accommodate the more intricate demands of B2B transactions. By addressing the specific needs of the B2B environment, the enhanced EN 16931 standard will be ready to play a pivotal role in supporting the EU’s broader e-invoicing transformation.
Concluding remarks
EN 16931 is more than just a technical standard; it serves as a driving force for the EU’s digital transformation in financial and tax processes. By establishing a unified framework, it has already enhanced e-invoicing interoperability across member states. With the implementation of the ViDA reforms, the standard’s significance will only grow, as it paves the way for mandatory e-invoicing and digital reporting for cross-border transactions from 2030.
The anticipated release of the updated version in 2025 will further solidify EN 16931’s position as the cornerstone of the EU’s transition to a fully digitalized e-invoicing system. While the journey towards comprehensive e-invoicing is ambitious, the EU is well-equipped to achieve its vision of an harmonized VAT ecosystem, with EN 16931 as its foundation.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of any organizations with which the author is affiliated.
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