E-invoicing compliance update, June 2024

As the global landscape of electronic invoicing continues to evolve, it's imperative for businesses to stay abreast of the latest developments and regulatory changes. In this review, we delve into significant updates from various countries around the world, shedding light on mandatory e-invoicing mandates, postponed launches, and new initiatives aimed at streamlining B2B transactions.

During the May Economic and Financial Affairs Council (ECOFIN) meeting, the VAT in the Digital Age (ViDA) legislative package, which includes regulations on Digital Reporting Requirements (DRR), once again faced a deadlock among the 27 EU member states. The sticking point remains the Platform Economy aspects, while the Digital Reporting Requirements section received unanimous approval.

Key Points on DRR:

• Hybrid invoice: A new concept of "hybrid invoices" is introduced. These combine structured data (like digital formats) with unstructured data (like PDFs). As long as they include all required information in a structured format, they might be considered e-invoices.
• Mandatory e-invoicing: This will be enforced for intra-EU business-to-business transactions (goods and services) starting July 1, 2030. However, it's contingent on a common EU definition for "e-invoice."
• Member state authority: Individual EU countries can still regulate reporting beyond e-invoicing/e-reporting mandates. This includes maintaining existing SAF-T (Standard Audit File for Tax) requirements.
• Domestic DRR: Lower standardization is expected for domestic (within-country) reporting obligations, allowing for some deviations from the EU model. This is expected by January 2030.
• Alignment and deadline extension: Existing e-invoicing and real-time reporting mandates need to comply with the EU standard by January 2035. Additionally, the deadline to issue e-invoices for intra-EU transactions has been extended to 10 days after the chargeable event.

Read → Germany's e-invoicing revolution starting in 2025: What businesses need to know [ Blog post ]

Billentis has published its new global e-invoicing and tax compliance report. The report, a follow-up to the previous report from 2019, provides a comprehensive analysis of the current landscape and outlook of electronic invoicing and related digital trade practices. The authors see a significant shift in the market landscape, with an accelerated transition towards universal electronic invoicing, fuelled by the demand for tax compliance.

Furthermore, the range of solutions is expanding beyond electronic invoicing to encompass Integrated Digital Trade, encapsulating the entire spectrum of transactions between buyers and sellers. Big influencers here are Artificial Intelligence (AI) and Environmental, Social, and Governance (ESG) factors. Within this context, Billentis has titled their report ‘Watch the Tornado’.

Differing from prior communication, foreign entities registered for VAT in Belgium but without a Belgian establishment will also need to be able to receive structured e-invoices where they are required to communicate their Belgian VAT number to a Belgian-established supplier.

The Ministry of Finance has greenlit alterations to the Accounting Act to boost e-invoice uptake. These revisions are presently being assessed by Parliament. Effective January 2025, all entities listed as e-invoice recipients in the business register can demand sellers to furnish machine-readable e-invoices. Parties can mutually decide on the format; otherwise, the EU EN16931 e-invoice standard is the default.

While Estonia lacks a mandatory B2B e-invoicing mandate, purchasers can now opt for e-invoicing per the new Accounting Act guidelines.

At the end of March, a new e-invoicing decree was released. It outlines the registration process for PDPs and includes the following details:

• Interoperability testing with public platforms
• Deadlines for producing the compliance report
• Deadline for compliance with EiDAS requirements

* Each of these dates is subject to change and could be postponed by up to three months via a potential decree.

The Latvian Ministry of Finance (MoF) has proposed amendments to the Accounting Law to introduce mandatory countrywide e-invoicing. Latvia plans to implement e-invoicing mandates in two phases.

For B2B taxpayers, a decentralized e-invoicing solution will be introduced for e-invoice exchange, utilizing three electronic transmission modes: a free national delivery solution (e-address); Peppol service providers; and individual agreements between taxpayers for direct software integration interface. The data structure for structured e-invoices will adhere to the PEPPOL BIS Billing 3.0 standard.

Read → Demystifying Peppol: Your guide to secure, streamlined business transactions [ Blog post ]

In response to the report on the VAT gap 2023, the Dutch State Secretary has provided comprehensive answers to questions raised by representatives of the House of Representatives. The State Secretary acknowledges the increasing interest in e-invoicing and e-reporting, suggesting that although there is currently no mandate in place, a shift towards these technologies may be expected in the future.

On April 26, 2024, the Polish Ministry of Finance completed an external audit of the National e-Invoice System (KSeF). The audit surfaced serious issues leading to the postponement of mandatory e-invoicing in Poland.

Initially set to launch on July 1, 2024, KSeF’s rollout has now been rescheduled, with a phased approach set to start on February 1, 2026, for large enterprises, and on April 1, 2026, for other businesses.

The audit highlighted serious errors in the KSeF's IT architecture and project management, including inadequate supervision by earlier administrators and poor maintenance of documentation. These findings prompted the decision to overhaul the system architecture thoroughly. The refreshed system is envisioned to be more reliable, secure, and functional, ensuring the security of economic transactions which is a priority for the Ministry. 

This year Saudi Arabia has announced three new waves for e-invoicing. The groups consist of all establishments whose revenues subject to value-added tax exceed a certain amount of riyals during either the years 2022 or 2023.

In a bid to modernize tax administration and simplify processes for businesses, Singapore is rolling out the InvoiceNow initiative, requiring GST-registered companies to transmit invoice data to the Inland Revenue Authority of Singapore (IRAS). This transition will be implemented gradually to ensure smooth adoption and compliance.

Introduced by the Infocomm Media Development Authority (IMDA) in 2019, InvoiceNow is a nationwide e-invoicing network based on the Peppol standard. It enables direct transmission of invoices in a structured format from one management system to another using the nationwide e-delivery network, based on Peppol, creating automation opportunities.

This allows both SMEs and large enterprises to enjoy smoother invoicing and faster payments, with reduced invoice processing time and no manual paperwork.  The InvoiceNow platform will be based on a five-corner model of Peppol – also called Peppol CTC. Taxpayers will be able to work with certified Peppol service providers. Invoices will be exchanged in a structured PINT SG format, and a copy must be sent to the IRAS.  

Singapore's e-invoicing commitment

Singapore launched its national e-invoicing network in 2019, based on the Peppol infrastructure, making it the first country outside Europe to use the European network to exchange e-invoices between private enterprises. To promote e-invoicing in Singapore, the body responsible for the country's e-invoicing system, IMDA, launched InvoiceNow, a series of initiatives including financial compensation for companies adopting e-invoicing. 

The Singaporean government is committed to moving away from paper invoices. Recently, Senior Minister of State Chee Hong Tat announced that “the Government will implement InvoiceNow as the default e-invoice submission channel for all government vendors within the next few years”. This means that InvoiceNow will replace the Vendors@Gov portal for registered businesses. 

The country's Peppol Authority, IMDA, is responsible for assigning access points and defining technical specifications for the e-invoicing system. Companies that would like to invoice electronically in Singapore must have an accredited access point and an e-invoicing system capable of sending invoices in the Peppol standard. 

Singapore's proactive approach to e-invoicing reflects its commitment to digital transformation and efficiency in tax administration. With the phased adoption of InvoiceNow and ongoing support, businesses are poised to embrace a new era of streamlined processes and enhanced compliance. 

The rollout of B2B e-invoicing mandates in Spain, initially projected for mid-2025, faces delays likely pushing implementation to early 2026. Pending the necessary regulatory approvals, including a Ministerial Order defining syntax and technical specs for the Spanish Tax Administration's e-invoicing platform, the deadlines remain on hold.

Additionally, the VERIFACTU electronic invoice obligations planned for July 2025 are also likely to be delayed until early 2026.

The phased approach to mandates in Spain includes obligations for buyers to respond with invoice status updates like acceptance/rejection, full payment confirmation including the effective date of payment, and other optional statuses such as partial payments or third-party assignments.

Moreover, businesses issuing e-invoices must include a PDF document within 12 months of the Royal Decree's enforcement, unless the receiver consents to the original format. Buyers have a 4-day window to reject invoices; otherwise, they are considered accepted. When the full payment is made, buyers also need to send this information to the Spanish authorities.

Following the sixth ministerial meeting of the Trade and Technology Council in Belgium (April 4-5, 2024), a Joint Declaration titled "Enhancing eInvoicing Interoperability between the United States and the European Union" was issued.

The Declaration affirms the intention for continued cooperation and efforts towards compatible e-invoicing between the US and the EU, which offer a range of benefits and have the potential to significantly reshape cross-market transactions and the dynamics of transatlantic trade.

To achieve increased interoperability, further discussions and alignment will focus on the flexibility of the data structure, payload alignment, and the establishment of roaming capabilities through service providers.

If you are looking for a way to improve your business's financial processes, e-invoicing is a great option to consider. It offers a number of benefits, including cost savings, increased efficiency, improved accuracy, improved security, and compliance. E-invoicing can also help your business improve cash flow, customer satisfaction, visibility and control, and environmental sustainability.

The information presented and timelines provided are accurate as of the date of publishing. Due to the dynamic nature of regulations and legislation, these timelines may change accordingly.

Want to learn more about mandatory e-invoicing? Get your copy of our report “E-invoicing interoperability and compliance."

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