Mandatory e-Invoicing in the EU


Electronic invoicing is fast becoming more than just a standard practice globally. After all, with the benefits of speed, cost and accuracy all widely proven now, it’s hard to justify retaining paper-based processes. In fact, the practice is so prevalent that some countries have introduced mandatory e-invoicing, including across the EU.

The leading examples of this are found in South and Central America – with Brazil, Chile, and Mexico having mandated B2B e-invoicing for many years. These early examples were driven by the need to close the unpaid tax gap, through better VAT reporting and payment processes.

Any doubters to the effectiveness of these programmes only need consider how Mexico has improved tax yields by 34% since implementing e-invoicing. A compelling case indeed.

Mandatory B2G e-invoicing in the EU

With that powerful smell of money in the air, it wasn’t long before the success of early e-invoicing adopters inspired changes in the EU. Governments on the continent looked to the examples set by Brazil, et al and began to mandate business-to-government (B2G) electronic invoicing as early as 2014 in the case of suppliers to Italian governmental entities.

Despite appearances to the contrary, governments actually like to embrace efficiency whenever possible. With the advent of the eInvoicing Directive 2014/55/EU, many governments on the continent have made electronic invoicing mandatory. Specific wording from section 35 of this directive has made it possible for governments to create laws mandating electronic invoicing for public procurement:

“However, this Directive should not prevent Member States from mandating that only electronic invoices be submitted in the framework of public procurement.”

As of early 2020, a snapshot of what of mandatory e-Invoicing looks like in some of the larger EU economies is as follows:

Italy – B2G e-invoicing requirements

  • 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 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 requirements

  • The French public administration has been extended the mandatory use of electronic invoicing in phases, from 2017 to 2020, according to the size of the company.
    • 01/01/2017 for any company including more than 5000 employees
    • 01/01/2018 for any company including 250 to 5000 employees
    • 01/01/2019 for any company including 10 to 250 employees
    • 01/01/2020 for any company including less than 10 employees
  • Electronic invoices must be delivered to public bodies via Chorus Pro, a portal developed by AIFE. 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). As from April 2018, it will also allow the use of standard UNCEFACT XML CII 16B, stand alone and through Factur-x hybrid format (with 5 profiles of data for Factur-x).
  • 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 requirements

  • 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 requirements

  • B2G e-invoicing will become mandatory from November 2020, when Germany adopts the PEPPOL network for its public procurement processes.
  • Standards are XRechnung and ZugFeRD 2.0, 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 requirements

  • The NHS is the first area of the UK’s public procurement to trial electronic formats and process.
  • There are two requirements of this initiative: the use of the PEPPOL as a network, and a GDSN e-catalogue for the synchronisation of product data.
  • This project requires vendors in the health sector to automate the interchange of invoices, purchase orders and despatch advice messages.
  • The 2015 Small Business, Enterprise and Employment Act grants powers to Ministers to regulate the use of electronic invoicing in the field of public procurement in England. So far, the Ministries have made no specific regulations under the Act.

Portugal – B2G e-invoicing requirements

  • From April 2020, e-invoicing will be a requirement when working with the public administration. This also includes electronic formats for credit notes and debit notes.
  • The format will be UBL 2.1, which already exists as an approved European standard.
  • Central, regional and local public authorities can use the Portal BASE platform to process contracts in the context of public procurement.
  • Connection is made through the AS2 protocol or via Web Services.
  • Invoices must be kept for at least 10 years by both issuer and recipient.

Belgium – B2G e-invoicing requirements

  • e-invoicing has been mandatory for new contracts within B2G procurement since 1 January 2017. It is also mandatory for businesses engaging in tenders above €135,000 from 1 January 2018. The federal government will only accept e-invoices as of 2020.
  • 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 requirements

  • e-Invoicing has been required for government suppliers since 1 January 2017.
  • Public entities in the Netherlands can receive electronic invoices in three formats:
    • UBL-OHNL is a standard that describes the messages for public procurement of all goods and services, except the hiring of temporary staff. UBL-OHNL is based on the international standard UBL. The UBL-OHNL invoice will eventually be replaced by NLCIUS;
    • SI-UBL is a subset (200 elements) of the UBL specification (2400 items). The SI-UBL standard is used by the Simplerinvoicing. The standard SI-UBL will eventually be replaced by NLCIUS;
    • SETU (HR – XML) standard describes the messages (including eInvoices) in the context of data exchange for hiring temporary staff. This is currently the highest volume of invoices to (central) government. SETU is an extension of NLCIUS.
  • Invoices must be kept for at least seven years.

Poland – B2G e-invoicing requirements

  • Issuing e-invoices is currently on a voluntary basis, while the receiving – according to the eInvoicing Directive (2014/55/EU) – is mandatory. All the public authorities have to register their accounts on the National eInvoicing platform (PEF), thus every invoice sent in a structured electronic way must be transmitted through PEF.
  • B2G e-invoicing will be mandatory from November 2020
  • Electronic invoices need to be EN-16931 and PEPPOL BIS Billing 3.0 compliant.
  • Invoices must be preserved for five years at a minimum.

Mandatory B2B e-invoicing in the EU

Whilst EU Directive 2014/55/EU makes a clear case for governments to mandate that public procurement requires e-invoices to be submitted, no such wording exists for B2B transactions. Not surprisingly, the issue of mandatory B2B electronic invoicing has become somewhat thornier.

If anything, provisions of the EU VAT Directive (and amendment 2010/45/EU) could be breached if e-invoicing is mandated for business-to-business (B2B) transactions. A classic example of bureaucratic cross-purposes

This hasn’t stopped Italy from forging a path ahead with the mandatory requirement for all B2B invoices to be issued electronically (from January 2019), through the ‘Sistema di Intercambio’ system. This allows the Italian Revenue Agency to automatically collect details of all e-invoices — before they are even sent to customers — enabling them to accurately calculate the tax due on payment of each invoice.

Italy’s maverick approach was approved by the EU Commission allowing a derogation from the EU VAT Directive. Other countries wanting to take a similar path must apply for a similar derogation to enshrine mandatory B2B e-invoicing in their laws.

With the potential tax revenue at stake, it’s hard to imagine any country not jumping on board. Here’s what’s happening at the moment:

Greece – B2B e-invoicing requirements

Greece has one of the highest VAT gaps in Europe at 29%; see European Commission VAT Gap report here). Consequently, in August 2018, The Independent Authority for Public Revenue Authority (IAPR) proposed a similar e-invoicing mandate to that used in Italy. However, as this would require exemptions by the EU Commission from certain provisions of the Directive, a change of tack was taken. The IAPR suggested a new model, which requires the sending of electronic invoices to the IAPR, focusing on the buyer’s ability to correctly account for purchase invoices.

Further, in April 2018, Greece’s Ministry of Finance announced its intention to implement mandatory e-invoicing and e-bookkeeping for all Greek entrepreneurs from January 1, 2020. This is now rolling out as the first stage to wider and mandatory B2B e-invoicing in Greece.

Spain – B2B e-invoicing requirements

Spain has not yet received derogation from the EU Commission to implement the B2B mandate, so it is impossible to give any estimates when it could occur.

However, in July 2017, the Spanish Tax Authority required more than 62,000 businesses to declare VAT records electronically via the Immediate Information Sharing system (SII). For eligible businesses, all VAT reports and record books should be sent to the AEAT electronic office in XML format. This format includes a header with the information on the holder of each record book and a block with the invoice details.

Businesses affected by the immediate information sharing requirement are:

  • Large companies (with annual turnover in Euros over €6,010,121.04).
  • Company groups for VAT purposes.
  • Taxpayers registered in the monthly refund regime (REDEME)

Since Spain has already implemented SII, it is only a matter of time before a political decision needs to be taken on which route to proceed with: e-invoicing or e-reporting.

France – B2B e-invoicing requirements

France has declared the intention to impose mandatory e-invoicing for B2B transactions from January 2023. The intended process will follow a similar approach to that deployed in Italy: Invoices will need to be pre-approved via submittal to the government’s Chorus Pro portal before being sent to the customer.

France will apply to the EU Commission for a derogation from the EU VAT Directive which ordinarily requires customers to provide written agreements to the acceptance of e-invoices.

Invoices may be uploaded to Chorus Pro in one of the following ways:

  • Manual entry
  • PDF or XML invoice uploading
  • EDI or API connection

The collected data would then be used to complete draft VAT returns, including sales and purchase invoices, which would be made available to taxpayers for review and application for adjustments. This would, therefore, end the model of completion and submission of VAT returns by taxpayers.

Turkey – B2B e-invoicing requirements

Turkey has rolled out mandatory digitisation of invoicing and associated processes, with the following dates:

  • Middlemen or merchants trading fruits or vegetables → 01.01.2020
  • Companies with 2018 year-end gross sales more than 5 Mio TRY → 01.07.2020 (the rule applies repeatedly for further accounting years practically creating an obligation on July 1st of every consecutive year)
  • Companies licensed by EPDK (Turkish Energy Market Regulatory Authority) (including dealers, i.e., gas stations included) → 01.07.2020
  • Motor vehicle manufacturers, importers, dealers → 01.07.2020
  • Companies acting as middlemen in Internet sales → 01.07.2020
  • Internet banner publishers and web advertisers → 01.07.2020

Portugal – B2B e-invoicing requirements

Portugal has been slower than some countries to require B2G e-invoicing. However, they are soon to mandate e-invoicing for B2B transactions, too. Key deadlines to consider are:

  • Mandatory adaptation by public administrations: By 18/04/2019, Portuguese public administrations and institutions should have had their information systems adapted to the e-Invoicing model. This deadline extends until 18/04/2020 in the case of local public administrations.
  • Requirement for suppliers (large companies): The deadline for e-Invoicing issuance by this group of companies is 04/2020.
  • Requirement for SMEs and micro-businesses: The deadline for adoption by companies not assigned to the previous group is 31/12/2020.

The Public Administration Shared Services Entity (eSPAP) will provide a platform for implementation of the electronic model in Portugal. Connection with this platform will be made through AS2 protocol or via Web Services and invoices will need to be submitted in UBL 2.1, approved European standard.

How Corcentric can Help

If you only take one thing from this blog post, it should be that mandatory is coming. It’s likely to be implemented in a variety of ways, in many cases requiring submittal of invoices in specific formats to systems for recording or processing.

All of these points, from producing invoices in the correct format, to archiving in a compliant manner, are already covered by the Corcentric EIPP platform.

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.