
E-invoicing to Enter a Phase with New Regulations
Digital invoicing is nothing new. E-invoices are already subject to several legal regulations that have existed for some time.
By
CIO Applications Europe | Monday, June 19, 2023

The digital age and the rapid expansion of e-commerce have brought about changes in taxation and invoicing as well. Changes include significant amendments to invoicing rules, some of which could enter into force in 2024.
Digital invoicing is nothing new. E-invoices are already subject to several legal regulations that have existed for some time. In that regard, businesses currently have to produce electronic invoices when providing a service to the State, a local authority, or any other public entity. All businesses, even micro-enterprises, are subject to this mandate.
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All businesses will be required to produce electronic invoices for all commercial transactions under the law's expanded scope.
There are three goals for this mandate:
- Increase fraud detection,
- Reduce the administrative burden on businesses, and
- Make accounting and VAT reporting simpler.
In response to the challenges presented by the digital era, the European Commission plans to alter the current VAT legislation and employ technology to combat tax fraud and assist businesses.
E-invoicing is likely to become common practice starting in 2024 and is less likely to be used for business-to-government transactions. Professional-to-professional transactions will all be required to use electronic invoicing. This implies that, theoretically, all businesses will be impacted, regardless of their size or industry of operation. The new regulation only applies to business-to-business (B2B), or dealings with other companies. Currently, B2C transactions are not impacted by the regulation. Additionally, VAT must apply to the business.
The obligation of customer acceptance, which is currently in place, would be eliminated in addition to the requirement of issuing electronic invoices based on structured data. As a result, invoice issuers would be free to adopt e-invoicing in the relevant country, even if there isn't a requirement in place for it in the specific Member State. Consequently, people who accept bills must also be ready to process electronic invoices.
The EU hopes that the new legislation will make electronic invoicing commonplace and eliminate the need for taxpayers to request that the customer accept their invoice. The proposal states that electronic invoicing will be required starting in 2028, giving firms plenty of time to get ready. The aforementioned concept of an electronic invoice and the corresponding standards, however, might take effect as early as 2024.
Modifications to electronic invoicing may have a significant effect on business in the EU. For firms, the new regulations may bring both opportunities and difficulties. It's critical to compile the relevant data and create the procedures that provide a smooth transition to the new regulations to get ready for these changes.
To fully benefit from e-invoicing, possibly even through an online invoicing service provider, it is necessary to prepare for the adoption of the new regulations. Electronic invoicing offers the potential to increase the efficiency and cost-effectiveness of corporate processes.
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