State of e-Invoicing in Estonia

B2G e-Invoicing has been mandatory in Estonia since July 2019. The Accounting Act states that e-Invoices are mandatory upon transfer of goods or services to a public sector accounting entity. The Act also mandated the use of specific formats, either the Estonian standard (national XML-based standard) or the European standard on e-Invoicing.

The Estonian government does not mandate nor recommend any e-invoicing service providers. A statement made by the Ministry of Finance outlines that economic operators are free to choose their e-Invoicing solutions. However, both the Ministry of Finance and the have agreed that businesses can use e-Financials free of charge.

e-Financials, an automated accounting software offered by the RIK (a state agency working under the Estonian Ministry of Justice), offers to help entrepreneurs organize their accounting and generate e-Invoices. Businesses who use e-Financials can do so free from charge. Only in the case that businesses use e-Financials to send e-Invoices to the public sector. All entities invoicing electronically are registered in the RIK, which manages all information to transmit e-Invoices to registered companies and institutions.

Estonia’s Approach: Platform and Management Solutions

Estonia has opted to process e-invoices in a decentralized way, this means contracting authorities within the public sector receive e-Invoices individually and not via a central platform. Consequently, there are several private service providers which offer e-Invoicing exchange services. Within the private sector, there are a few service providers that companies can choose from: Billberry, E-arveldaja, Finbite, Telema, and Unifiedpost.

All of these providers are linked by agreements, which allow for e-Invoices to be sent from an accounting software or ERP solution of one operator to the software of another. At the present time, there is no system in place to monitor B2G e-invoicing. However, it is possible to view from an eBusiness registry provided by the RIK if a private company can receive electronic invoices or not.

In order to improve the communication between the e-Invoice operators, it is necessary to connect to the Peppol network, which will create more opportunities for the cross-border exchange of electronic invoices.

B2B E-Invoicing

B2B e-invoicing is not mandatory, but companies that want to use it must follow certain rules. Companies must have accounting or ERP software to generate e-invoices, or can outsource to various software providers. The previously mentioned service providers can also provide e-invoicing management services, including the creation of e-invoices.

Economic operators are free to contact private or public software providers such as the RIK. In the case that a B2B business wishes to issue electronic invoices, the receiver or the buyer is required to give their consent.

Across both B2B and B2G e-invoicing, there is no electronic signature that is required. Aside from following the XML format, there is also a 7 year archiving period for all electronic invoices.

VAT: Digital Reporting Requirements

All taxable persons registered for VAT in Estonia, including non-residents, are required to complete the annex to the VAT return (form KMD INF) when reporting VAT transaction data, which applies to B2B and B2G sales and purchases, as well as to transactions subject to standard or reduced VAT under certain conditions.

The frequency of the reporting is expected to be on a monthly or quarterly basis. From January 2016, the information must be provided individually for each transaction.

Data can be submitted in three ways:

1. Manually enter data or upload files in XML format to the tax authority portal
2. Using X-Road through a machine-to-machine (M2M) interface
3. In exceptional cases, on paper

What to expect in the future

In May 2024, the Estonian government approved the proposed revisions to the Accounting Act. Pending the approval of the Parliament, this could pose significant changes in the horizon. If approved by Parliament, January 1, 2025, buyers, including all public sector entities, will have the authority to demand e-invoices from suppliers.

The Act would improve the current state of business starting with using only one standard. This could mean moving away from the Estonian standard and adopting the European one to become cohesive in business and remove confusion. Especially since the Estonian standard is not widely used or developed anymore.

Under the proposal, companies that are registered in the business register as recipients of e-invoices will be able to request e-invoices from their suppliers.

The revision aims to simplify and harmonize the e-invoicing system in Estonia, reduce the administrative burden and costs for businesses, improve data quality and interoperability, and support the vision of a real-time economy.

The bill is expected to be submitted to the government in 2024. It is unclear when it will be implemented, but it could be as early as 2025, depending on the legislative process.
For more on the impact of the e-Invoicing Regulation on other EU countries, please see our previous blogs.

Earlier this year, the Irish Department of Finance held a consultation that could signal future changes to e-invoicing rules. They are considering the mandatory use of e-invoicing for B2B and B2G transactions.

A new consultation took place on June 27th, encouraging the modernization of the VAT administration system. Revenue, the Irish Tax and Custom, is well aware of the need to stay close to business and stakeholders during the process and will try to be as clear as possible regarding the timeline, the delay provided as well as the administrative work it will require.

The tax administration also notes the upcoming ViDA Proposal, which will accelerate e-invoicing in the EU market. Now that Revenue has acknowledged the priority of modernizing the Irish VAT system, we will keep a close eye on the future discussions that are are going to occur.

The Introduction of B2G e-invoicing

In April 2019, Ireland introduced B2G e-invoicing, requiring public bodies to accept eInvoices from suppliers who choose this method. While the law does not require suppliers to submit e-invoices to public bodies, it does make it easier for those who choose this method. A number of suppliers have already adopted e-invoicing when doing business with public authorities in Ireland.

Current Guidelines in Place

Ireland’s e-invoicing efforts are aligned with the European Union’s standard for e-invoicing. Ireland has chosen the PEPPOL network as its network for e-invoices and e-procurement documents, following in the footsteps of many other European countries.To further comply with EU standards, the Office of Government Procurement published a guide on how to send compliant eInvoices. The e-invoicing Guidelines are aimed at the four public sector bodies in Ireland that provide financial services to the health and education sectors, to local authorities and to central government departments.

The Public Bodies are the following:

• Central Government Departments and the National Shared Services
• Office (NSSO), as well as Local Government. The Local Government Management Agency (LGMA)
• National Finance Division of the Republic of Ireland’s Health Service Executive (HSE)
• Department of Education’s ETBs, Education Shared Business

The guidelines identify common and different elements between the organizations.

The 2024 Consultation: The Future of Electronic Invoicing

For a better understanding of the current situation in Ireland, it is important to cover the statement issued by the Minister of Finance, Michael McGrath.
In October 2023, Minister McGrath issued a statement on the government’s plan to modernize the VAT invoicing and reporting system in the 2024 budget.

Soon after, the Revenue launched a public consultation to gather views, concerns and opinions on how to digitize Irish VAT reporting and what the system should look like. The Revenue is currently considering the introduction of a VAT reporting requirement for domestic B2B and B2G trade. The consultation period ended in January 2024, so it’s unclear when the Revenue will address the public. There is no set timeframe for the implementation of these potential changes. As a result, we anticipate that there will be a reasonable period of notice prior to the implementation of any new rules.

The Irish Revenue is aware of the difficulties ahead. Most EU authorities have had to delay the implementation of similar rules for various reasons. As a result, it will likely take two to three years before we see any significant changes occur. Contracting authorities and sectors in Ireland have varying levels of e-invoicing capability and approaches to receiving and processing eInvoices. Some still rely on manual and semi-automated processes, while others have advanced standards-based, automated and integrated systems.

The digital evolution represents a shift towards a more connected and efficient business landscape in Ireland. We look forward to seeing what the next steps will be. For more on the impact of the e-invoicing Regulation on other EU countries, please see our other blogs.

Overview

Business-to-government (B2G) electronic invoicing has been mandatory in Spain since 2015. All public authorities are required to have a system in place to receive electronic invoices via FACe, and all their suppliers are required to submit their invoices electronically through there as well (if the total exceeds €5,000.) FACe is the country’s central platform and it is mandatory for central government but optional for regional and local governments.

Invoices must be submitted in FacturaE, an XML-based invoice format, and the standard format used in Spain. Suppliers are free to choose any service provider they’d like, given the provider is able to connect to the FACe platform.

B2B E-Invoicing

Unlike B2G transactions, business-to-business e-invoicing is not mandatory in Spain. Despite this, the country has developed a relatively new platform for B2B e-invoicing that’s open to the public and free of charge. FACeB2B, based off FACeB2G, enables the submission of invoices between subcontractors and contractors of Public Sector contracts. 

To this date, there is still not an active mandate in place for B2B e-invoicing. However, Spain is actively working on implementing a legal standard between 2024 and 2026 that will require all vendors to use e-invoicing in B2B transactions.

Service providers like SPS Commerce can help companies comply with standards and submit all electronic documents correctly.

The SII

The SII, is the direct electronic reporting and managing system for VAT (Value-Added Tax) in Spain. Companies can declare details of their billing records through the SII and send them electronically to the AEAT (Spanish Tax Administration Agency.)

The system allows for an efficient and automated way to provide instant communication between the Administration and the taxpayer.

Who is required to use SII?

•    Large companies with turnover exceeding €6 million
•    VAT Groups
•    Those registered in the REDEME (Monthly VAT Refund Register)

Timeline and Latest Updates

From 2024: Large B2B VAT taxpayers are required to have electronic insurance and receipts of invoices. Rules are in place regarding e-invoices and their production, including automated invoicing. This includes certified invoicing systems, and, the voluntary submission of invoices to the Agencia Tributaria – Sistemas y Programas Informáticos o Electrónicos (SIF).

From 2025: Due to changes within the Spanish government and technical challenges, the launch of B2B e-invoicing will likely happen in Summer of 2025. This is specific to companies that make over € 8 million in annual-turnover.

July 1st “Veri*factu Regulation“: To prevent tax evasion and record alteration, certification requirements for e-invoicing systems and programs will be mandatory for companies and entrepreneurs.

In October 2024 the Spanish National Gazette published Order HAC/1177/2024, rolling out essential technical requirements for the VerifActu requirement. This marked the start of a 9-month period (until July 2025) for the mandatory implementation of Veri*factu systems in all billing software across the country. Note, however, that given the delay in publishing this Ministerial Order, the timeline established in Royal Decree 1007/2023 is expected to be adjusted, pushing the deadline out by a few months.

From 2026: B2B e-invoicing will become mandatory for other corporations and self-employed professionals who make under € 8 million in annual turn-over.

Two-Phase Plan for B2B E-Invoicing

Between 2025 and 2026 there will be a two-phase rollout for B2B e-invoicing. In 2025, 12 months after regulatory framework is approved, large companies who pay taxes in Spain will be required to utilize e-invoicing, and all other taxpayers will be required to start in 2026.

According to the Spanish Parliament and the issuance of this law, the country will need to utilize QR codes to help track invoices digitally. This legal requirement will ensure that software developers and retailers are complying with the latest e-invoicing requirements.

Whether B2B or B2G, all companies operating in Spain are subject to a 6-year archiving period for invoices (electronic or not). Archiving outside of Spain is permitted under certain conditions.

Conclusion

The proposal for mandatory e-invoices for all businesses and non-incorporated businesses for B2B transactions aims to improve business efficiency and fight against VAT fraud.

The mandates integration might be delayed, but it will still become an expected requirement in the upcoming years. With the help of SPS Commerce you can prepare your business for the coming regulations.

Current Landscape

Denmark took a major step toward digitization in 2022 with the introduction of the Digital Bookkeeping Act, which mandates the use of digital accounting systems for business transactions. This demonstrates the government’s commitment to modernizing business practices and improving efficiency. There are also plans to gradually introduce a mandate for B2B e-invoicing, ensuring that the entire business ecosystem in Denmark embraces digitalization.

The Digital Bookkeeping Act

The Digital Accounting Act is a significant legislative development that will come into effect on July 1, 2024. This mandate requires companies to adopt digital accounting systems in order to streamline the recording of transactions and ensure compliance with reporting requirements. The Act aims to simplify accounting procedures, automate annual reporting processes, and increase transparency and accountability in business practices.

NemHandel and Peppol

The Danish e-invoicing infrastructure is built around the NemHandel platform, based off the Peppol model. This nationally developed and operated platform facilitates the secure exchange of electronic invoices between businesses and government agencies. NemHandel is mandatory for B2G public procurement and ensures compliance with the OIOUBL standard, which is in line with European norms. Those who are receiving e-invoices need to be registered with the Nemhandelregister. The Nemhandelregister is a Peppol SMP (Service Metadata Publisher) that is integrated with Peppol eDelivery and works as an address register. The purpose of integration is to improve cross-border connectivity in terms of receiving and processing eInvoices.

How to be compliant in Denmark

Businesses must register with Nemhandelregister (NHR) to receive e-invoices. Through NHR, businesses can obtain an e-invoice recipient number (GLN/EAN) which allows trading partners to look them up, and ensures compliance and a seamless transaction process.

There are several tools available for sending compliant eInvoices, including:

• Integrating with cloud-based ERP/purchasing systems
• Invoicing directly from financial systems
• Using web-based platforms

Each method ensures compliance with Danish e-invoicing standards, paving the way for seamless transactions in the digital age.

Annual Digital Reports

Under the new rules, companies with a turnover of more than DKK 300,000 in the last two calendar years are required to submit an annual digital report to the Danish Business Authority (Erhvervsstyrelsen). This threshold will enable companies of different sizes to contribute to the digital agenda and promote a culture of transparency and compliance.

Embracing the Future

Denmark is moving towards a digital future and businesses need to adapt to new regulations. To stay compliant and innovative, companies should embrace eInvoicing and digital bookkeeping. Companies can seize opportunities for growth, increase operational agility, and foster greater stakeholder trust by going digital ahead of regulatory deadlines.

The CRA (Canada’s Revenue Agency)

While there is no mandate for e-invoicing in Canada, the Canadian government is actively exploring the advantages of electronic invoices and providing guidance on its implementation.

The Canada Revenue Agency (CRA) is responsible for enforcing taxation legislation. The CRA strongly encourages businesses to use electronic invoicing because of its many benefits. To ensure that businesses can confidently comply, the CRA has established comprehensive rules and regulations for all invoicing matters:

Storage: Processes should guarantee invoices’ confidentiality, integrity, and availability. They should also be easy to retrieve when needed.

Archiving: All invoices must be archived for a minimum of six years.

Format: E-invoices should follow the UBL model (XML based).

Billing Information: Information such as date, invoice number and clear description of the goods or services must be included. Additionally, businesses contact information and customer’s contact information.

The CRA and Underground Economy

One main reason that the government is considering e-invoicing is to reduce activity in the underground economy (UE). The UE is an economic activity/transaction that is hidden from the government in order to avoid taxes and other obligations.

In 2021, the CRA launched an initiative to study the viability of a B2B e-invoicing mandate.

The main objective was to evaluate the potential benefits of e-invoicing for businesses. These benefits include increased efficiency, improved sales tax compliance, deterrence of participation in the underground economy, and improved taxpayer experience with e-invoicing. However, the study also provided insight on limitations to adopting electronic invoicing.

E-Invoicing Evaluation

The 2021 CRA study on e-invoicing identified key concerns that businesses have about using e-invoicing. These limitations include:

• It is not being widely used – Participants in the study felt that if most of the companies they work with do not use e-invoicing.
• Why fix something that isn’t broken? Some companies do not see the benefit of moving to electronic invoicing because they are satisfied with their current invoicing processes.
• Efficient Processing vs. Error Concerns – Although e-invoicing can streamline invoice processing, study participants expressed concern that automation could lead to undetected errors.

Those who participated in the CRA studies also shared their views on how Canadian businesses could be encouraged to adopt electronic invoicing.

Ideas ranged from a mandate for its use by the Canadian government, to larger companies leading the way for smaller ones. Additional incentives could include rebates or tax breaks from the Canada Revenue Agency for companies that adopt e-invoicing.

To summarize, this study has helped the government understand what adopting electronic invoicing could mean. It provided insight into how Canadian businesses view e-invoicing, identified pain points, and suggested ways in which the government could encourage its use in the coming years.

Why choose E-invoicing?

Many countries are adopting e-invoicing for its benefits, including faster payments, accessible documents, improved partner relationships, error-free tax filing, and more. The transition to e-invoicing has already begun in many countries, and it is only a matter of time before most businesses adopt this model.

Follow us on LinkedIn to stay informed about e-invoicing developments!

]]> https://www.spscommerce.com/eur/blog/e-invoicing-in-greece-streamlining-digital-tax-compliance/ Fri, 08 Mar 2024 22:47:11 +0000 https://www.spscommerce.com/?p=717581 Updated on January 29, 2025

Following the European Union Directive 2014/55 and the initiatives of the Ministry of Digital Governance, Greece is making significant progress in the adoption of electronic invoicing. This decision aims to modernize financial processes and increase transparency and efficiency in business transactions.

Adoption and Updates

In 2023 e-invoicing became mandatory in Greece for all local, regional and national contracting authorities under Law 4601/2019.

The Ministry of Digital Government appointed the General Secretariat for Information Systems to be the national PEPPOL Authority. They are the point of contact for online purchasing and government activities across Europe. This includes defining national e-invoicing policies, rules for exchanging invoices and technical standards.

As of 2024, recent updates regarding e-invoicing include:

• Plans for mandatory VAT e-invoicing, possibly starting in 2025.
• Incentives for taxpayers to adopt e-invoicing through certified providers.
• Providers use of QR codes to verify authenticity.

On 13 January 2025, the European Commission published a proposal for a Council Implementing Decision authorizing Greece to introduce mandatory B2B e-invoicing, following Greece’s request for a derogation.

E-Invoicing Requirements

Let’s look at the basic requirements for e-invoicing in Greece, which are in line with those set by the European Union.

• Invoices must be in a standard electronic format, XML. They should contain key information, including the invoice number, date of issue, buyer and seller details, the total amount invoiced and a description of the goods and services.
• Electronic invoices should be easily accessible and archived for a minimum of five years. 

How to Send Compliant E-Invoices in Greece

To comply with e-invoicing regulations in Greece, companies need to take certain steps:

• Register for E-Invoicing: To access the e-invoicing platform and start using the system, companies must register with the Greek Tax Authority.
• Digital Signature and Certificate: A digital signature and certificate are required to prove the authenticity of e-invoices and prevent information tampering.
• Preparing E-Invoices: When issuing electronic invoices, it’s important to use accounting or business software that follows the rules set by the Greek Ministry of Finance. As mentioned earlier, invoices should include seller and buyer details, invoice date, tax amount, and product/service description.
• Validation and Transmission: The e-invoice is sent via PEPPOL to the Interoperability Center for validation. The Interoperability Center then sends the e-invoice securely through the Greek tax platform, myDATA. 
• MyDATA Platform Controls: The e-invoice is checked and assigned a “unique entry number.”
• Processing by Contracting Authority: The contracting authority/public entity receives the e-invoice and processes it according to it’s internal procurement using an approved IT system/web application. Processing status updates are then sent back to the sender via the Interoperability Center.

Conclusion

E-invoicing is mandatory for government agencies and offers efficiency, transparency and compliance benefits for businesses in Greece. Businesses can easily navigate the e-invoicing landscape and contribute to the country’s digital transformation journey by following the established regulations and procedures.

In 2018, the RTIR (Real-Time Invoice Reporting) obligation was introduced for domestic invoices. This required all taxpayers registered for VAT purposes in Hungary to report eInvoice data via XLM files to the Hungarian Tax Authority (NAV) in real time, without human intervention.

In 2021, the law was amended to include all B2B and B2C transactions and stated that they must also submit their reports to the tax authorities in real time, regardless of the amount of the transaction.

Hungary’s reporting system model is centralized. Companies can report the XML file exclusively to NAV Online 3.0, a Hungarian online invoice reporting system, which then makes the invoice available to customers electronically.

NAV and the introduction of eVAT

In 2024, the National Tax and Customs Administration (NAV) launched the electronic VAT system (eVAT) to simplify VAT reporting using available tax authority data.

eVAT is based on transactional data that taxpayers have been required to submit in real-time since July 2018 under the RTIR scheme. It also includes data from Hungary’s live cash-register reporting scheme.

Starting on January 1, 2024, VAT returns can be filed according to the needs and preferences of small and large taxpayers:

• Through Machine-to-Machine Connection (M2M) 
• Via the eVAT interface
• Through the ÁNYK program, which is designed to facilitate the submission of information to the NAV

Stay informed about eInvoicing developments across Europe by following SPS Commerce on LinkedIn!