Electronic Invoices: Digital Signature? Yes or No?

Here are the basic requirements for input VAT deduction and the fines that may apply if the additional requirements of the tax authorities are not met. Since 1 July 2011, a digital signature is no longer mandatory for electronic invoices. Invoices may be sent as a PDF file or as an email without an electronic signature. However, the following additional requirements (in addition to the basic requirements*) must be met to secure the input VAT deduction (this also applies to paper invoices): the origin of the invoice must be authentic (= "identity of the invoice issuer") AND the content of the invoice must be guaranteed to be unaltered (= "mandatory information on the invoice unchanged") AND the legibility of the invoice must be ensured (= "with the human eye"). The tax authorities generally require an internal control procedure — so far, so good. But what exactly does that mean? Unfortunately, there are no official specifications yet. *= the recipient must verify that all legally required information is shown on the invoice, and that the invoice is justified and arithmetically correct. Many clients have recently asked us how this control system should actually look and how proper handling can be ensured. What specifically does the taxpayer have to do? We contacted the Borken tax office and received the following information, which we summarise for you below (please note that this is non-binding information and does not provide legal certainty): At its last internal meeting, the Borken tax office discussed that electronic signatures are no longer required; accordingly, the Borken tax office also accepts electronic invoices in principle. However, the following conditions must be met for the tax office to recognise electronic invoices: The invoice must be documented, stored electronically, and protected against destruction — neither paper printouts nor leaving the file in the email account is sufficient (the receipt of the invoice, its conversion, and further processing and archiving must be logged). It must not be possible to make changes to the file (i.e. the invoice must be stored on a medium that no longer permits modification). The file containing the invoice must be archived in such a way that any loss of this invoice file is excluded. Changes to the file must not be possible. The file must be retrievable when the tax auditor wishes to inspect it. The recipient must ensure that the transmission, archiving, and conversion systems comply with the principles of proper bookkeeping (Grundsätze ordnungsgemäßer Buchführung, GoB). What consequences arise if the taxpayer fails to meet the requirements of the tax office? To secure the input VAT deduction, the basic requirements that also apply to paper invoices must be observed. If the additional requirements regarding electronic invoices are not met — for example, if an electronic invoice received by email is, contrary to the above requirements, merely printed out and processed further as a paper document — a fine may be imposed.