2024 E-Invoicing Regulations: Europe & UK Overview

Navigating Europe's complex e-invoicing landscape has become more important than ever for Managed Service Providers (MSPs). Over the years, each European country has adopted its own model and requirements for electronic invoicing, resulting in a highly complex business environment. 

In response, the European Union (EU) is actively working to standardise these diverse systems through legislative efforts, with the goal to create a more unified e-invoicing framework with a consistent approach across various issues. 

The European Commission introduced "VAT in the Digital Age" (ViDA), a comprehensive proposal to modernise the EU's VAT system. This proposal includes significant reforms to electronic reporting and e-invoicing obligations. 

Understanding these changes is essential for MSPs operating across multiple countries in these regions. That's why we've created this guide to help you understand the latest e-invoicing regulations in Europe and the UK.

Let’s begin! 

What is E-Invoicing? 

E-invoicing, or electronic invoicing, involves creating and storing invoices in a digital format rather than using the traditional paper invoice. However, it involves more than just digitising the invoices. Many countries require a formal and technical process to ensure that the e-invoices comply with specific standards and regulations, such as structured data formats and electronic signatures. 

Mandatory E-Invoicing 

E-invoicing is mandatory for transactions with the public sector in the EU, the US, and the UK. This requirement aims to save taxpayer money, improve government efficiency, and simplify VAT collection. With the growing adoption of e-invoicing, businesses across various sectors will need to align with these new standards. 

What is the impact of E-Invoicing on businesses? 

Any business involved in sending or receiving invoices from clients or suppliers will be impacted by e-invoicing requirements. Essentially, every business operating within the EU will need to implement e-invoicing to stay compliant. This shift will affect several key aspects of business operations. 

Key Parties in the E-Invoicing Process

There are two primary parties involved in the e-invoicing process: 

Issuer (Supplier): 

• Creates and issues the invoice for payment by the customer. 

Receiver (Customer): 

• Receives the invoice and pays the supplier for services provided. 

• This guide will mainly focus on businesses paying for services. 
  

Additional involved parties 

The e-invoicing process also involves several other key players who influence or dictate how the process operates: 

Authorities (e.g., HMRC): 

• Set regulations governing invoice storage, VAT compliance, and other legal requirements. 

Accountants and Auditors: 

• Need access to invoices to verify their validity and ensure proper financial reporting. 

E-invoicing regulations in Europe  

As mentioned earlier, e-invoicing regulations in Europe vary significantly across different countries, each having its own model and requirements. 

In 2014, the European Parliament passed a directive requiring all public sector bodies in the EU to accept e-invoices. These e-invoices must follow certain standards, including the use of structured data and electronic signatures. 

Each EU country has its own specific rules for e-invoicing. Let’s take a look at country-specific regulations: 

E-invoicing in Germany 

• Public Procurement: Since 2020, e-invoicing has been mandatory for public procurement. This requirement was phased in earlier for some states and levels of government. 

• B2B Transactions: As of May 2023, e-invoicing is not yet mandatory for non-government transactions. A draft law mandates that companies with an annual turnover exceeding €800,000 must issue e-invoices from January 2027. Smaller companies will need to comply by January 2028. 

• Preparedness: By 2025, all companies should be ready to receive e-invoices. Voluntary adoption of e-invoicing is encouraged starting from 2025. 
  

E-invoicing in Spain 

• Large Companies: E-invoicing will be mandatory for large companies (with turnover over €8M) by July 2024. 

• Other Companies: All other companies must comply with e-invoicing regulations by early 2026. 

• System: The Spanish system will be similar to France, utilising a government portal for invoice submission and certified software providers for access. 
  

E-invoicing in Austria 

• Legislation: Since 2018, the IKT-Konsolidierungsgesetz § 5 law requires all federal government partners to submit structured electronic invoices. Paper and email invoices are no longer accepted. 

• Channels: E-invoices can be transmitted via the Unternehmensservice Portal or the Peppol eDelivery Network. 

• Formats: The standard formats are ebInterface (Austrian XML standard) and Peppol-UBL. E-invoices sent via Peppol must be in UBL format. No electronic signature is required. The archiving period is seven years. 

E-invoicing in Italy 

• Public Procurement: E-invoicing has been mandatory since 2015. 

• B2B and B2C: Since 2019, companies with an annual turnover over €65,000 must issue e-invoices for both B2B and B2C transactions. 

• System: The Sistema di Interscambio checks compliance elements, including electronic signatures, before forwarding invoices to the authorities. All automated invoicing tools must integrate with this system. 

E-invoicing in France     

• Public Sector: E-invoicing has been mandatory for public sector suppliers since 2017. 

• B2B Transactions: To enhance VAT tracking and tax office efficiency, all businesses will be required to submit e-invoices for B2B transactions. 

• Timeline: Large and medium businesses must comply by September 2026, and small businesses by September 2027. 

• System: Invoices are submitted through the Portail Public de Facturation (PPF) or accredited Partner Dematerialization Platforms (PDPs). 

E-invoicing in The Netherlands 

• Legislation: The Dutch Public Procurement Act stipulates that electronic invoicing is mandatory for public contracts and concession contracts. This law has been in force since December 2017. Currently, e-invoicing for B2B transactions remains voluntary. 

• E-invoicing channels: The main e-invoicing channel is the Peppol eDelivery network. This network facilitates the exchange of electronic invoices between government agencies and suppliers. 

• Formats: The Netherlands uses several formats for electronic invoicing, including SI-UBL 2.0 and UBL-OHNL 1.9, adapted to comply with the Dutch CIUS standard (NLCIUS) and the European EN 16931 standard. For national and international transactions, Peppol BIS Billing 3.0 is used. 

• Electronic signature and archiving: Electronic signatures are not required for electronic invoices. The archiving period for electronic invoices in the Netherlands is seven years. 
  

E-invoicing regulations in the UK 

E-invoicing in the UK is governed by specific regulations that vary for business-to-business (B2B) transactions and public sector dealings. Understanding these requirements is essential for ensuring compliance and efficiency in your invoicing processes. 

B2B transactions

• Voluntary Adoption: E-invoicing is not mandatory for B2B transactions. Businesses can mutually agree on their preferred invoicing format. 

• Flexibility: Businesses have the flexibility to choose between structured (XML) or unstructured (PDF) formats, provided the invoices are clear and legible. 

Public Sector 

• Mandatory E-Invoicing: HMRC requires e-invoicing for transactions with public entities, such as the NHS, government departments, and local councils. 

• Consistency: Use a single invoicing system to ensure consistency and avoid discrepancies. 

General Requirements for E-Invoicing 

• Customer Agreement: Secure explicit agreement from customers to receive e-invoices. 

• Formats: E-invoices can be in structured formats like XML or unstructured formats like PDF. 

• Authenticity and Integrity: Ensure the authenticity and integrity of e-invoices through certified electronic signatures or electronic data interchange (EDI) systems. 

Implement security best practices

As mentioned earlier, security is a top priority for Azure environment management. Here are some key practices to keep in mind: 

•  Enable Azure Security Center to continuously monitor the security status of your resources and identify potential vulnerabilities.

• Use Azure Firewall or Network Security Groups (NSGs) to effectively manage and secure network traffic.

• Maintain regular updates and patches for virtual machines and other resources to protect against known vulnerabilities.  

• Implement strong security measures. You can mitigate risk, protect sensitive data, and comply with regulatory standards. 

How to E-Invoice in the UK 

To comply with HMRC requirements, each e-invoice must include the following: 

• Document Number: An identifying number for the invoice. 

• Supply Date: The date when the goods or services were provided. 

• Invoice Issue Date: The date when the invoice was created. 

• Supplier Information: The supplier’s name, address, and VAT registration number (if applicable). 

• Customer Information: The customer’s name and address. 

• Goods/Services Details: Description, unit price, and quantity of goods/services supplied. 

• VAT Information: The rate of VAT and the amount (if applicable). 

• Total Amount Payable: The total payable amount, which can be in any currency. 

Compliance Tools 

• Certified Software: Use certified electronic signature software to ensure the document’s integrity and authenticity. 

• EDI Systems: Consider implementing EDI systems for automated and secure invoice processing. 
  

How to choose the best e-invoicing solution or software 

Choosing the right e-invoicing software is crucial for automating and streamlining your finance processes while ensuring compliance with various country-specific mandates. 

As e-invoicing rules and their technical implementations can be complex and sometimes even unclear, it’s important to choose a software provider that can meet your reporting requirements in an effective way.  

For a better understanding here’s a table with the key features and factors to consider when evaluating potential e-invoicing solutions: 

Simplify your E-Invoicing with CloudBilling 

By now, it’s clear that adopting e-invoicing is crucial for meeting global regulatory standards. With CloudBilling, you can automate your invoicing processes, ensuring compliance and seamless integration with your existing financial systems. 

CloudBilling makes e-invoicing straightforward, saving you time and money by eliminating manual data entry and the complexities of invoice management. 

Why CloudBilling matters for MSPs: 

By implementing CloudBilling, MSPs can concentrate on what they do best: providing exceptional service to their customers. Our software eliminates the time-consuming invoicing tasks, allowing MSPs to operate more efficiently. Let’s now take a look at the main benefits when choosing CloudBilling: 

• Simplified Invoicing: Reduce your monthly invoicing efforts by up to 90%. Send multiple invoices in bulk to save time and effort. 

• Unified Invoicing Solution: Offer customers a single, all-in-one invoice for simplified multi-cloud invoicing. 

• Personalized Discounts: Easily set up discounts for specific customers or products after prepayment. 

• Seamless Integration: Integrate effortlessly with your existing software for a smooth transition to automated invoicing. 

With CloudBilling, you can transform your e-invoicing process, streamline operations, and provide the best invoicing experience for your customers.  Curious to find out more about what we can do for you? Book a free demo with us today.