Mandatory B2G e-Invoicing Across Europe in 2022
Business-to-government (B2G) electronic invoicing comes in many different varieties, relying on different platforms to generate and receive invoices and even different methods of delivery. However, B2G electronic invoicing (or e-invoicing) across the EU is starting to show signs of convergence on a set of standards driven by adherence to the European Norm (EN) 16931 on e-invoicing.
Before we dive into the details here, it’s important to understand that much of the progress in e-invoicing is driven by government policy, and has started with B2G invoices. E-invoicing mandates have come into play as the EU Directive (2014/55/EU) has been transcribed into law across EU countries. The European Commission was motivated to deliver this directive based on perceived cost savings for governments in the EU, as well as improvements VAT revenue from taxpayers.
Where governments mandate B2G e-invoicing regulations, it may not be long before business-to-business (B2B) e-invoicing is required too. We will explore the topic of mandatory B2B e-invoicing across Europe in a future blog post.
Untaxed B2B transactions can account for as much as a 30% shortfall in tax revenue, as is estimated to be the case in Greece (before they introduced mandatory B2B e-invoicing and a connection between this and the tax authorities).
You can read more about these in our country-synopsis below, or download our free guide to Mandatory Electronic Invoicing for the EU Public Sector.
Collaboration on Factur-x/ZUGFeRD
After years of individual implementations of (EU Directive) across Europe, there have been recent efforts, between France and Germany, to develop an interoperable standard. Known as Factur-X (in France) and ZUGFeRD (in Germany). This standard has been developed through cooperation between France’s National Forum for Electronic Invoices and Electronic Public Contracts (FNFE-MPE) and Germany’s Forum elektronische Rechnung Deutschland (FeRD).
If more countries collaborate to harmonise their invoicing standards, we could see the emergence of a European standard for e-invoicing, but it’s early days still. Presently, businesses wishing to invoice public entities across various countries in Europe are best off working with an expert partner to ensure invoices are correctly formatted and delivered to the right platforms at the right time.
What is PEPPOL?
PEPPOL is a common framework for the secure cross-border exchange of electronic documents. The framework’s was set up in 2008 to make trade easier between European governments. Since 2008, the PEPPOL framework has become something of a default solution for EU member states to utilize when stipulating mandatory e-invoicing. The infrastructure guarantees security and easy identification of companies sending and receiving e-invoices.
PEPPOL is not a platform in itself, but rather a network infrastructure that facilitates the transfer of electronic documents, such as e-invoices.
PEPPOL BIS (often referred to by the latest version – i.e. PEPPOL BIS 3.0) is the Business Interoperability Specifications that set the default format for electronic documents sent via the PEPPOL network. PEPPOL BIS is a template and set of rules for how to structure the information in these documents.
Mandatory B2G e-Invoicing in Europe
As of August 2022, here is a snapshot of what of mandatory B2G e-Invoicing looks like in some of the larger EU economies.
Italy – B2G e-invoicing
- The use of e-invoices in public procurement in Italy is mandatory for ministries, tax agencies and national security agencies since June 2014. Since 31 March 2015, it became mandatory for all public entities.
- The Italian e-Invoice format is an XML called FatturaPA.
- Connectivity is through the national online hub, via web services, known as Sistema di Interscambio (SdI) .
- e-Invoicing issuers and recipients must preserve their electronic documents for 5 years minimum.
France – B2G e-invoicing
- Since 1 January 2020, all companies in France are mandated to send e-invoices to public contracting entities on the Chorus Pro portal. This portal centralises the processing of all electronic invoices addressed to the French public sector.
- Chorus Pro allows the use of the UBL Invoice 2.1 standard for different types of formats (including structured UBL and minimal UBL). Chorus Pro already supports UN/CEFACT CII and OASIS UBL 2.1. In order to maximise the benefits of a common standard, France leaves suppliers free to decide which electronic format and channel they will use.
- Access to PEPPOL, which is enabled through Chorus Pro facilitates the cross-border exchange of e-invoices. Chorus Pro uses CII with Factur-X, the Franco-German standard for hybrid electronic invoicing (named ZUGFeRD in Germany).
- There is a legal obligation to preserve invoices for six years, although, issuer and recipient often keep the original documents for at least a decade.
Spain – B2G e-invoicing
- Using e-invoices with the public administration has been a requirement since 15 January 2015.
- Suppliers to the public sector need to send their e-invoices to the PGEFe (General Entry Point for Electronic Invoices).
- In accordance with this law and as of 15 January 2015, all invoices sent to the public sector entities must be submitted electronically, should have a structured XML format (Facturae V3.2.X) and be signed with an electronic signature utilising a qualified certificate.
- There is a requirement for recipients to preserve the original electronic documents (e-documents) for at least five years
Germany – B2G e-invoicing
- B2G e-invoicing became mandatory from November 2020, when Germany adopted the PEPPOL network for its public procurement processes.
- A shared portal (E-Rechnungs-Portal) was created at the federal level. Some federal states (Länder) use this shared portal too, others have built their own portals or do not use any portal.
- Standards are XRechnung and ZugFeRD 2.0 and 2.1, which form a Core Invoice User Specification (CIUS) and follow the European Norm (EN) 16931 on e-invoicing. National authorities can accept other formats next to XRechnung. Germany may also make use of the PEPPOL CIUS.
- Invoices must be archived for at least 10 years, from the end of the year in which the invoice is issued.
UK – B2G e-invoicing
- Suppliers of the health sector must comply with two requirements. Suppliers must have a PEPPOL access point to access the PEPPOL network and must also have GLN and GTIN codes to identify products and services so they can be exchanged through the GDSN network.
- In May 2019, the UK government implemented the EU directive on e-invoicing for public procurement via The Public Procurement (Electronic Invoices, etc.) Regulations 2019. Now, anyone involved in public tender procedures must receive and process supplier’s invoices that follow an e-invoicing standard established under the Directive.
- HMRC initiative Making Tax Digital requires that organisations keep all of their records and submit their VAT tax returns digitally to HMRC, making eInvoicing a compliance requirement.
- Invoices must be archived for at least 6 years, and must include evidence of their authenticity and integrity.
Portugal – B2G e-invoicing
- From December 2021, e-invoicing became a requirement when working with the public administration. This also includes electronic formats for credit notes and debit notes. The Lei n.º 111-B/2017 that governs the eInvoicing system was passed on 31 August 2017. This decree was modified by Decree 123/2018, published on 28 December 2018
- The European standard on eInvoicing is fully implemented and mandatory for usage under UBL 2.1 or/and XML-GS1.
- The entity responsible for coordinating and implementing eInvoicing in Portugal is the Entidade de Serviços Partilhados da Administração Pública (eSPap)
- Central, regional and local public authorities can also use the Portal BASE platform to process contracts in the context of public procurement.
- Invoices must be kept for at least 10 years by both issuer and recipient.
Belgium – B2G e-invoicing
- The regional government of Flanders decided in 2016 to make the use of e-invoices in B2G procurement also mandatory for economic operators as of 1 January 2017 for all its regional entities.
- Since 1 November 2020, only e-invoices are accepted for all public contracts awarded by the administrations and public organisations of the Brussels-Capital Region.
- The format used is PEPPOL BIS INVOICE.
- The Belgian public sector supports this approach by operating Mercurius, a PEPPOL-aligned “e-mailroom”, that can be used by any Belgian contracting authority to receive their e-invoices.
- Invoices must be kept for at least seven years.
The Netherlands – B2G e-invoicing
- According to law of 20 December 2017 amending the Public Procurement Law 2012 to include Directive 2014/55/EU, the implementation deadline for B2G e-invoicing for all public authorities in the Netherlands was 18 April 2019.
- As of 1 October 2020, the Dutch government is the PEPPOL Authority in the Netherlands. The new organisation is called the Netherlands Peppol Authority (NPa).
- Public entities in the Netherlands can receive electronic invoices in three formats:
- NLCIUS – This standard is a subset of the European Standards, implemented as the Dutch system. This standard consolidates and/or replaces earlier models (UBL-OHNL and SI-UBLT), services which deal with governing bodies are required to use this standard.
- PEPPOL BIS 3.0 – This is a subset of the European Union standard EN16931 for e-invoicing, helping to create a standard applicable not only to EU nations, but with countries such as Australia, Singapore and the UK.
- SETU (HR – XML) – This is an XML standard designed for hiring temporary staff, and purchasing services. It is a popular e-invoicing standard for this industry in the Netherlands.
- Invoices must be kept for at least seven years.
Poland – B2G e-invoicing
- The law transposing the eInvoicing Directive (2014/55/EU) was introduced in November 2018 as the Act of November 9, 2018 on electronic invoicing in public procurement, concessions for construction works or services and public-private partnership. It is being in force since 18 April 2019. All the public authorities have to register their accounts on the National e-invoicing platform (PEF), thus every invoice sent in a structured electronic way must be transmitted through PEF.
- Electronic invoices need to be PEPPOL BIS Billing 3.0 compliant.
- Invoices must be preserved for five years at a minimum.
How Corcentric can Help
If you only take one thing from this blog post, it should be that mandatory B2G electronic invoicing requirements are massively simplified by working with a third party to ensure your invoices are delivered in the right format, adhering to the right standard, for each recipient, wherever they are in Europe. Companies in a wide range of industries work with Corcentric in a number of jurisdictions that require mandatory B2G e-Invoicing.
Many businesses will look to apply automation to invoicing rules as part of this digitization process, and gain real-time insight into delivery status through the same e-invoicing solution.
However, making these changes with in-house IT teams and purchasing software solutions to support this can prove both costly and time consuming. In many cases, businesses find there is both a bandwidth challenge and a skills gap that needs to be recruited for, trained and retained. One solution to this challenge is to work with a service provider, gaining access to their expertise and bandwidth as well as their technology solutions.
All of this is possible through the Corcentric EIPP platform, an e-invoicing solution, which can be leveraged as a technology-enabled managed service to streamline implementation and take away the overheads associated with invoice delivery. You can read more about this in our free guide to Mandatory Electronic Invoicing for the EU Public Sector, or get in touch directly here.
For businesses who want to go a step further and do all of the above but also receive guaranteed payment of all invoices on time, every time, Corcentric provides a Managed Accounts Receivable (MAR) service. You can find out more about how Managed Accounts Receivable guarantees a fixed DSO as low as 15 days and unlocks working capital for growth in this white paper.
As legislation evolves across the EU and additional formats enter circulation, Corcentric will continue to ensure compatibility as well as the ability to send invoices out in a variety of other formats, in parallel.
Download our guide to Invoice Security for more insight into how Corcentric can improve your invoicing security today.