Redefining Business: The Global Surge of Mandatory E-Invoicing

Electronic invoicing, commonly known as e-invoicing, is rapidly gaining global traction. Many countries are progressively enacting legislation to enforce e-invoicing. However, regulations concerning invoice receipt, transmission, archival, and tax policies differ significantly across countries, becoming complex and continuously evolving. Amidst this scenario, how can companies guarantee compliance across all their operational countries? 

e-Invoicing regulations worldwide 

In most cases, B2G transactions (invoices from suppliers to public organizations) have been the first to be affected, followed by B2B transactions (between companies). Below is a brief, non-exhaustive list of examples of regional and national regulations: 

• European Union: Starting from 2019, electronic invoicing became obligatory for suppliers dealing with public entities across several EU member states. In terms of business-to-business transactions, electronic invoicing is gaining momentum with the encouragement of governments. For instance, Italy implemented it in 2019, followed by Luxembourg in 2023. Notably, Germany and Poland are slated to enforce electronic invoicing mandates in 2026 and 2024 respectively. In France, at the end of July 2023, the government announced the decision to postpone its implementation date, initially scheduled for July 1, 2024. The revised timetable will be determined in conjunction with the adoption of the Finance Act for 2024. 
• Latin America: Most Latin American countries now require electronic invoicing. 
• Asia/Pacific: In Japan, electronic invoicing is not mandatory, but is encouraged by the implementation of a system to facilitate it. In China, a pilot program was launched in 2020 on a voluntary basis. This program should be extended over the next few years. In Australia, electronic invoicing is not mandatory, but is encouraged. 
• Africa: South Africa was the first country to adopt e-invoicing regulations, yet in general, other African countries are not as advanced in this area. 
• North America: In the USA and Canada, electronic invoicing is encouraged but not yet obligatory, except in specific instances. 

For more on global regulations, consult our Global e-Invoicing Compliance Map. 

Electronic invoicing: advancing toward universal adoption of the clearance model 

Tax authorities around the world use two different audit methods: 

• The post-audit model: This audit takes place after the invoice has been issued and the companies must ensure the authenticity and integrity of invoices. This model is mainly used in Europe and Commonwealth countries.  
• The clearance model: Here, the local tax authority plays an intermediary role between the parties involved. The supplier must declare each invoice, generally via a specific platform, and obtain the administration's approval before transmitting it to the customer. Unlike the post-audit model, invoice verification is carried out in real time, not after the fact. Many countries (Brazil, Italy, Poland, UK, Romania, Spain, etc.) have adopted this model, or are moving in this direction as e-invoicing becomes more widespread. In practice, this model requires invoices to be sent or received in a specific format. 

Additional information on invoicing audit methods: Post-audit vs. clearance invoice mandate models: what’s the difference? 

Navigating compliance with regulations on invoice receipt, transmission, archiving, and tax rules, especially for companies spanning multiple countries, is a complex undertaking. Basware provides an answer to this challenge, by integrating into its solutions the different rules required in each country in terms of electronic invoice formats, electronic signatures and archiving. 

Peppol network: a common framework to simplify exchanges 

Created to enable the secure transmission in structured format (XML) of electronic documents to be exchanged within the framework of public procurement contracts, Peppol is an open, interoperable network that also facilitates the issue, transmission and reception of electronic invoices in compliance with the rules in force in many countries.  

The Peppol network is secure, notably via encryption of communications between two access points, and guarantees non-repudiation of exchanges by default. It is currently used in some forty countries in Europe, North America, Asia, Australia and Africa, and the number of network members and countries using it continues to grow. Its success predominantly stems from its progressively systematic use for electronic invoicing. 

The ability to connect to the Peppol network is a necessity for many organizations and will become increasingly crucial as the adoption of this platform continues to grow worldwide. The Basware Network is an official access point to Peppol, enabling our customers to issue, transmit and receive invoices in compliance with the regulations in force in all the countries in which they operate. 

More on mandatory e-invoicing 

Would you like to find out more about our solutions and how Basware can help you prepare for mandatory e-invoicing? Contact us now!