Status of e-Invoicing in Central and Eastern Europe (CEE countries)
Although at varying rates, CEE countries will see significant advancements in e-invoicing and VAT reporting in the upcoming years. While the countries of Estonia, Latvia, and Bulgaria are making progress with the adoption of electronic invoicing, they are still a long way from mass adoption. Countries like Poland, Hungary, Romania, and Lithuania are consolidating the implementation of the e-Invoicing system and the adoption of continuous transaction control models.
Electronic invoicing context in the CEE Countries
According to adoption schedules, notable changes are expected to be introduced gradually starting in 2025, depending on each country's roadmap. The Next Generation funds, for which digitization has a prominent place in the Recovery, Transformation, and Resilience plans presented by the countries of the Union, should also help digitization at the European level advance significantly. Up until December 31, 2026, the investments and reforms will be financed. They will, in general, accelerate the digitization of business, industry, and public administration.
The digitization projects will support not only the adoption of new technology but also a shift in organizational culture and mentality, acting as a catalyst for a true qualitative leap.
Since Italy, France, Portugal, and Spain are pioneers in electronic invoicing systems and VAT registration declarations, it makes sense that Central and Eastern European nations would follow in the footsteps of established models.
Currently, Central and Eastern Europe is operating in a two-speed environment. On one hand, there are nations with sophisticated tax reporting systems like Poland, Romania, and Hungary, which have implemented electronic tax returns with SAF-T i.SAF and i.VAZ, in the case of Lithuania; and countries that are making strides toward making electronic invoicing required in the B2B sector, like Poland, Romania, and Latvia.
On the other hand, there are nations that are still working to adhere to the European directive that requires electronic invoicing in supplier relations with the public sector. This is the situation in Slovakia as a result of the completion of the IS EFA government communication platform.
The development will allow for the foundation of electronic invoicing in a region of Europe that, despite currently feeling the economic effects of the conflict in Ukraine, is an emerging market where the development of electronic invoicing systems facilitates investments and business relations.
How does e-Invoicing work in different countries?
Albania: As of 2021, all taxpayers must report e-invoices in real time. All invoices must be submitted to the government's central invoicing platform (the Central Information System, or CIS) for validation.
Belarus: Since 2016, it has been required to submit Tax Invoices electronically in XML format on the Belarusian government portal, along with an electronic signature.
Bulgaria: Bulgaria is planning to put mandatory e-Invoicing into effect. The public consultation period on electronic invoicing has begun, according to the Bulgarian National Revenue Agency. There are currently no additional process details available.
Croatia: Starting in 2019, suppliers to the public sector are required to use electronic invoicing. It is necessary to create an XML file and send it to the Croatian central platform via the Peppol network, which will then distribute it to government organizations.
Slovakia: Sending electronic invoices to public entities is optional and possible through the national platform, IS EFA. It will soon be put into effect across all levels.
Slovenia: Since 2015, electronic invoicing in the Peppol format or the Slovenian national format has been required for both public entities and their suppliers.
Estonia: As of 2017, only electronic invoices may be received and processed by public entities. Additionally, starting in 2019, suppliers with offices in Estonia are required to send electronic invoices to the government.
Hungary: In accordance with current European regulations, only public administrations are required to be able to receive and process electronic invoices. There is no obligation to send electronic invoices in Hungary. The RTIR system, which requires all businesses in the nation to transmit their tax information in real time to the NAV tax authority, was also implemented in 2018 in Hungary.
Kazakhstan: As of 2019, all taxpayers must submit electronic invoices. Sending them to the central EIIS platform, which oversees validating and distributing the invoices to the recipients, is required.
Poland: The project to widely adopt electronic invoicing by businesses there is slated to begin in January 2024. The National Electronic Invoice System, also known as KSeF, will serve as the central hub for all invoice declarations. On the other hand, both Polish businesses and foreign businesses operating in Poland must submit an electronic declaration through the SAF-T system of VAT registrations.
Romania: For both B2G and B2B e-invoicing, the Romanian government has established the central RO e-Invoice platform. E-invoicing has been mandated for businesses whose operations are connected to product categories with a high tax risk since July 2022. As of July 1, 2022, e-invoicing is also required in the B2B sector. Companies must also submit SAF-T formatted tax and accounting information to the ANAF starting in 2022.
Russia: Except for businesses that buy and/or sell products subject to import product traceability, electronic invoicing in Russia is voluntary and dependent on the agreement between the issuer and the receiver.
Serbia: The e-invoicing transition has been started in stages by the Serbian Ministry of Finance. Beginning July 1, 2022, businesses must be able to receive and process electronic invoices sent by Serbian public entities to them. Beginning January 1, 2023, e-invoicing will be available to all B2B parties.
Ukraine: All businesses are required to report invoices electronically in Ukraine. After issuance, they must be generated in XML format and reported (until the 15th for invoices from the second half of the previous month and from the 16th to the 31st of the month for invoices from the first half of the month).