Electronic Invoicing obligations in Europe as of 2023

Italy was the first country to in force B2G (Business to Government) electronic invoicing (e-invoicing) in 2014. Italy was also the pioneer to introduce B2B and B2B in 2019, for almost all Italian companies.

Currently, several EU countries have full E-invoicing mandatory only for B2G : Spain, France, Portugal, Croatia, the Czech Republic, Poland, Finland, Norway, Denmark, Sweden, Estonia, Lithuania, the Netherlands, Serbia and Luxembourg (on-going).

Austria, Belgium and Germany have partial B2G obligations, mostly because of languages, differences between central and federal states or immediate payments.

Italy is currently the only country with compulsory e-invoicing for B2G, B2B and B2C areas. But things are about to change, for 2 reasons: 1) Advantages of e-invoicing and 2) New Policies from the EU.

1) Advantages of e-invoicing

• Early adopters of e-invoicing recognize the many benefits:
• Leaner and more efficient business processes thanks to digitization,
• Less time to issue invoices,
• Reduced payment times by public administrations,
• Less time for recording Accounts Payable,
• Faster and easier Indirect Taxes (VAT) reporting and recovery, as well as customs reporting (Intrastat).

2) New Policies from the EU

In 2023, the EU Directive in force the obligation that each invoice issued will have to comply with the regulatory and technological requirement of the Payee’s country.

In other terms, the only possibility to comply is to adopt electronic invoicing.

If there are so many advantages to e-invoicing, why so many companies/countries did not adopt it so far? It’s because of local Policies and because companies are generally lacking expertise in digitalization and underestimate the benefits of e-invoicing.

Finally, there is no common technologic solution or platform and countries have been adopting self-standards.

However, the use of an ERP could highly facilitate the integration of e-invoicing, with minimum efforts and costs (if you have the good one).

To summarize, the adoption of the e-invoicing for B2B transactions will become a must have not only because of Invoicing Policies changes, but also because of increased constraints on digital management of tax compliance adopted by several EU countries, if the organizational benefits did not convince you…

The table below shows the current situation in the EU big 4, and UK and Switzerland in terms of e-invoicing.