When we talk about the invoice in Italy, we inevitably refer today to the electronic invoice, which has been the only invoicing method for almost all Italian economic entities since at least 2019, when the electronic invoicing obligation was introduced for B2B and B2C. The obligation to issue electronic invoices in Europe to public administrations (B2G) has been in force since 2015.
As we know, Italy is currently the only country in Europe where electronic invoicing is mandatory in all B2G, B2B and B2C areas (with a few exceptions, which anyway are destined to disappear in the short term). Non-European countries, on the contrary, have long adopted an approach similar to that of Italy, presenting themselves in many cases as precursors in this field. But the situation in Europe and worldwide is changing rapidly, with several states introducing measures to extend the use of e-invoicing to all sectors. In this article, we will dig deeper into the current situation and future obligations that European and non-European countries will introduce from 2023.
Why haven’t other European countries introduced e-invoicing yet?
The question “why adopt the electronic invoice?” has been answered several times. The benefits are diverse and cover many aspects. Countries that have adopted e-invoicing have recognized the following benefits:
- Recovery of VAT receipts and more extensive control of transactions;
- Automation of business processes and improvement of the level of digitization of companies;
- Effective relations between businesses and public administrations;
- Reduced payment times by public administrations, for the benefit of businesses.
The positive results observed in companies and countries that have already generalized the use of e-invoicing are precisely what encourages more and more States to introduce mandatory e-invoicing at different levels.
But what has held them back so far?
A first aspect is the European directive n° 2006/112/EC, known as the VAT directive, and in particular its articles 218 and 232. These articles provide that within the European Union, invoices can be issued in paper or electronic format. and that the invoice recipient must first consent to an invoice being issued electronically. This is why the introduction of compulsory electronic invoices requires the green light of the European Union, by means of a special derogation. Italy obtained it, first in 2018, then again in 2021 and until 2024. The extension of the derogation, to which the extension of the obligation also to lump sum payers as of July 1, 2022 was added, was motivated by the positive effects we mentioned above. From now on, the last resistances and doubts fade, and the recent actions undertaken by our European neighbors prove it. So let’s look at the current state of the art and see what developments await us in the short term.
The status of electronic invoicing in Europe in 2022
Currently, several European countries have extended the obligation of electronic invoicing for public administrations, that is to say B2G, partially or totally. Countries with a complete B2G obligation include Spain, France, Portugal, Croatia, Czech Republic, Poland and Finland, Norway, Denmark, Sweden, Estonia, Lithuania and the Netherlands. Some states have introduced this requirement until 2022, including Serbia and Luxembourg, the latter through a phased plan.
There are also situations where the B2G obligation is still only partial. This is the case in Belgium, Austria and Germany. In the case of Austria, certain types of contracts and transactions remain excluded from the obligation, for example insurance contracts and transactions with immediate payment.
In the case of Belgium and Germany, however, the bias is directly related to the federal model of the two countries. In Belgium, the B2G obligation only concerns the administrations of the Flemish region and Brussels. In Germany, on the other hand, the electronic invoice is required by all central administrations, while the administrations of the various federal states have to refer to the measures of the various regions, which leads to a very heterogeneous and fragmented situation. However, most federal states have either introduced the B2G requirement or plan to introduce it by 2023-2024, albeit through decidedly varied modes and technological solutions. But we will return to this point more fully later.
The roadmap for European countries: next e-invoicing obligations in Europe, from 2023
As we have seen, while the B2G obligation is almost fully in place, no country has yet introduced constraints regarding invoicing in the private sector, i.e. B2B and B2C. But things are about to change, and from 2023, those who need to invoice abroad will have to be able to comply with the regulatory and technological requirements of each country.
Through this short list, let’s look the countries and next dates to watch:
- France: from 2024, the B2B obligation will be phased through a 3-phase plan which should be completed by 2026, initially involving large companies and gradually all companies;
- Spain: legislation is in the process of being adopted which will introduce the obligation of B2B electronic invoicing, still in two phases. In the next 3 yearshowever, the use of electronic invoicing will be unavoidable;
- Slovakia: compared to an initial roadmap, Slovakia postponed the introduction of B2G and B2B electronic invoicing by a few months. The B2G obligation is scheduled for 2023, while for B2B, it will be necessary to wait until 2024;
- Poland: the local KSEF platform has already been used since January 2022, allowing the electronic processing of B2B invoices. Currently optional, its use should become mandatory from April 2023;
- Bulgaria: consultations are currently underway, which should lead to the definition of relevant legislation and a plan for implementing electronic invoicing from 2023;
- Finland: the objective is to introduce B2B and B2C electronic invoicing by 2025;
- Romania: from July 2022, a partial B2B obligation comes into force, linked to the sale of a range of goods considered to be most at risk of tax evasion. From 2023, the electronic invoicing mandate should be extended to the entire sector;
- Serbia: after introducing B2G and G2B electronic invoicing in 2022, it is planned to introduce electronic invoicing in the internal B2B sector in 2023;
- Denmark: According to its date of approval in May 2022, the implementation of electronic invoice for B2B companies will start from January 2024. Full implementation is expected to be completed by January 2026;
- Belgium: the Belgian roadmap also foresees the introduction of a B2B obligation, but with some changes compared to the initial plans. New rollout dates are being finalized, but implementation will likely begin between 2023 and 2024.
Solutions and technological platforms for electronic invoicing in Europe
Another point to consider is the technological and the infrastructural aspect that different countries have decided to adopt. While there are more or less shared standards, such as the PEPPOL network and the associated UBL format, the approaches adopted are extremely varied.
Most countries have decided to set up a national electronic invoice management platform, more or less similar to the Italian SDI. France, for example, through its national platform Chorus PRO, centrally manages the transmission of invoices, using specially created national formats.
In Germany, where we have already seen how fragmented the situation is, there is a dedicated platform for central government invoice processing, ZRE, and several other platforms for federal state administration invoice processing. Billing a local government will therefore need to adapt to the current platform and format used from time to time.
Other countries, on the other hand, have chosen to rely on the UBL format, which is managed by OpenPEPPOL and therefore widely shared, while adopting a national platform. Finally, Belgium, Norway and the Netherlands have decided to rely entirely on the PEPPOL network, with a view to greater interoperability also at cross-border level.
Not just e-invoicing: other tax compliance mandates and the SAF-T protocol
In many cases, the adoption of the electronic invoice is accompanied by the introduction of other constraints and solutions such as CTC (Continuous transaction monitoring), related to the digital management of tax compliance, always with the aim of achieving greater traceability.
One of the most used protocols in different countries to manage the communication of tax data to the competent authorities is SAF-T. Through a structured process of different profiles according to the country of reference, this protocol makes it possible to communicate the data required punctually by the authority and according to the legislation of each state. This is why, although it is the same declaration protocol, there may be differences in the presentation, the period (annual, half-yearly, monthly, or even only at the request of the referent), and the type of data. transmitting.
European countries adopting this type of protocol include:
- Poland, where it is known as JPK.
Other States have however decided to adopt similar solutions, but relying on national technologies and platforms:
- Spain, through a solution called SII;
- Germany, with the reporting of budgetary data via the E-Bilanz protocol;
- Greece, via the myDATA platform
The approach of non-European countries: what are the next steps?
We will end this article by also recalling the situation outside Europe, because more and more countries in the world have seen in the electronic invoice a tool to be exploited to achieve their objectives of control of public finances and to make processes more efficient.
Here are some of the countries that are introducing relevant measures in this regard:
- In Saudi Arabia, B2B electronic invoicing has become mandatory since the end of 2021, when the first phase of implementation began. The second phase will begin in 2023 and will include integration with the centralized ZATCA system. Currently, non-resident companies and those without territorial subsidiaries are exempt;
- In the United Arab Emirates, a measure is being published (by 2022) which will make electronic invoicing mandatory in the B2B sphere, via modalities similar to those adopted by Saudi Arabia;
- Egypt has made B2B electronic invoicing mandatory since 2021, finalizing the implementation in early 2022. As of July 2022, electronic invoicing will be extended to the B2C sphere;
- Australia has approved a plan to phase in B2B e-invoicing in three phases that will run from 2023 to 2025. The Australian plan is based on using the PEPPOL infrastructure as the sole mode of exchanging e-invoices.