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E-invoicing laws in Europe - here is the current situation
Several of Europe's largest economies have made up their minds.
Electronic invoicing is the solution to better communication, simpler administration and greater sustainability.
Mandatory e-invoicing legislation for business-to-business (B2B) transactions is underway in several countries. Here we report on the current state of play in some of the most advanced countries.
BELGIUM
A law on e-invoicing for B2B transactions between Belgian VAT-registered taxpayers - with some exceptions - looks set to become a reality on 1 January 2026. The draft law has already been approved by the Belgian Council of Ministers. Implementation will take place in three phases, with a six-month gap between each phase.
It has also been decided that Peppol will become the standard for the exchange of structured electronic invoices, unless both parties agree otherwise, but this assumes that the format chosen must still comply with the European standard.
FRANCE
The National Assembly opposed the tax authority's original finance bill, which proposed to enforce a law on e-invoicing for businesses as early as July 1, 2024. A new deadline has now been set. If the new proposal is implemented, there will be a two-phase roll-out for both e-invoicing and e-reporting. From 1 September 2026, all businesses will be required to receive e-invoices and large companies will be required to issue e-invoices. From September 2027, the same requirements will apply to SMEs and micro-businesses.
The French estimate that the legislation will reduce the country's VAT gap by €13 billion. The problem at the moment is that the two chambers of Parliament disagree on the timetable. If the split persists, a new reading before the two assemblies will be required.
ITALY
It is now four years ago (2019) that Italy became the first European country to implement mandatory e-invoicing for the B2B sector. Initially, a distinction was made between domestic and cross-border invoices. Domestic invoices would go to the tax authority's invoicing platform SdI (Sistema di Interscambio) while cross-border invoices were referred to the periodic tax reporting system, Esterometro.
But last July, changes were made to the SdI invoicing system. These changes included the inclusion of smaller companies, with a turnover of more than €25,000 per year, in the system and making real-time reporting mandatory for cross-border transactions. Esterometro was thus abolished.
For small businesses, inclusion in the SoI has taken place in stages. The last category, companies with an annual turnover of less than €25,000, will be subject to the SdI's e-invoicing requirements from January 1, 2024.
"A law on mandatory e-invoicing from July 1, 2024 was announced in August this year."
Poland is an early adopter of B2B electronic invoicing
Croatia
Application submitted for an EU approval for mandatory B2B invoicing starting in 2026.
POLAND
A law to implement mandatory e-invoicing from July 1, 2024 was announced in the Polish Journal of Laws in August. The law includes the following key elements:
- The new national invoicing system KSeF, which from July 1, 2024 will be the central platform for issuing and receiving e-invoices, will apply only to domestic B2B invoices.
- The law will only apply to taxpayers, with a Polish VAT number, established in Poland.
- Invoices can be issued separately, but should be submitted to the KSeF the following day.
- Invoices paid in cash, and simplified invoices, may be issued in their current form until January 1, 2025.
- OSS and IOSS (One Stop Shop) invoices are excluded.
- Transactions exempt from VAT are also out of scope until January 2025.
"A mediation committee has been set up to break the deadlock between the Bundestag and the Federal Council."
Disagreement in Germany on the timing of the upcoming e-invoicing law
RUMANIA
The Romanian e-invoicing regulation is approved by the Parliament and the President. More precisely, it means that Romania will introduce a law on B2B electronic invoicing for domestic and foreign companies in 2024. The introduction will take place in two stages. On January 1, 2024, the requirement to digitally report invoices in XML format within five days of issuance will begin. Initially, however, it will only apply to domestic transactions. The conditions will then become more stringent from 1 July 2024. From that date, full electronic invoice submission will be required in advance via the Romanian government's transaction reporting platform, generally referred to as a Continuous Transaction Controls (CTC) system. Paper invoices will not be accepted for tax compliance. In terms of the difference between expected and actual VAT revenue, Romania has the highest VAT gap in the EU at 34%.
SPAN
In September 2022, the Spanish Congress ratified a bill, with technical specification, that allows for mandatory B2B e-invoicing requirements within the country. At that time, there was a hope to quickly move from words to action and launch the presented digital law from 2025.
But legislation and establishing technology takes time. The Spanish have learned that over the past year.
What Spain has in mind is a two-stage approach, starting with the largest companies - with annual revenues of €8 million or more - and then following them with other taxpayers 12 months later.
The question is when it will happen. Although the Spanish elections were held last summer, the new government did not take office until mid-November. As parliamentary negotiations dragged on, the pace of decision-making has slowed down. The 12-month countdown, which must pass before the law comes into force, has not yet started.
In addition, technical teams in charge of implementation have warned that a launch before mid-2025 could pose difficulties.
GERMANY
This summer, Germany received the required exemption from the European Commission to introduce a law on domestic e-invoicing for B2B. With that approval, the aim was to require businesses to be able to receive e-invoices from January 1, 2025, and for the transition to e-invoices only for most businesses to be completed by January 2026.
But that timetable was rejected by the Bundesdag (lower house of parliament), which instead proposed to postpone implementation by one year. But then further objections arose. This time from the Bundesrat (upper house). The latter of these two federal state bodies wants to see an even longer delay. More precisely, two years. There is now a deadlock between the upper and lower houses and a mediation committee has been called in. However, another part of the compromise has been approved. The use of existing EDI structured e-invoices will continue to be allowed provided both parties agree.
Sources: vatcalc.com, vatupdate.com and ec.europa.eu/
