Electronic Invoicing in the European Public Sector

Electronic invoicing is a reality in Europe thanks to the efforts of public administrations to establish it as the preferred invoicing system in business-to-government (B2G) transactions. Widespread e-invoicing in Europe has created an accessible, transparent, and more attractive market for business development. Above all, it has opened commercial opportunities within and outside of its community borders.

The European Union set a goal that by 2020 electronic invoicing would become the prevalent means for commercial relations with public suppliers. Where does electronic invoicing stand in the European public sector? Which countries have achieved this goal? Under which invoicing models do they operate?

Important Steps: Directive 2014/55 and the PEPPOL Standard

The widespread use of electronic invoicing in Europe encourages cross-border transactions, but many obstacles were overcome to achieve this. Those roadblocks arose from the existence of as many technical standards and legal requirements as there are countries in the European Union.

The system was standardized with EU Directive 2014/55, published on 16 April 2014, and with the implementation of a European standard that was published in 2017.

With the transposition of the Directive, public administrations as contracting entities were obliged to receive and process electronic invoices that comply with the European standard and any of the syntaxes approved by the Commission.

The EU timetable established that Member States were required to implement electronic invoicing between the public sector and its suppliers by 18 April 2019. It allowed for a one-year extension for non-central government administrations. Electronic invoicing is now mandatory throughout the European B2G sector. Few exceptions have been granted, such as in Portugal. The COVID-19 crisis has delayed the mandatory requirement to 31 December 2020 for large companies and 31 December 2021 for microenterprises.

The PEPPOL standard guarantees interoperability by facilitating public procurement between companies and administrations, regardless of their location or the model used. This common standard is key to cross-border e-Procurement and was developed especially for use in public health. Currently, PEPPOL is operational in countries such as the United Kingdom, France, Norway, the Netherlands, Austria, Italy, and Belgium, among others.

Electronic Invoicing Models by Country

Without a doubt, electronic invoicing has improved commercial transactions, eliminated barriers, and provided better business opportunities for companies in Europe. Businesses can more easily operate in a single market and bid for public contracts.

However, it is essential to know the country-specific electronic invoicing models and requirements to participate in European public procurement.

For example, if a Spanish pharmaceutical company opts to supply a certain vaccine to the German national health system, it will have to send the e-invoice through the central portal, Zentrales Rechnungseingangsportal des Bundes (ZRE). It must use the XRechnung or ZUGFeRD format, an electronic signature is not required, and the invoice must be kept for a minimum of 10 years.

If this same service is offered in the Netherlands, the electronic invoice must follow the PEPPOL model. The central platform for electronic invoicing is called DIGIPOORT, also connected to the PEPPOL network. The format used is SI-UBL2.0 and the invoice must be kept for seven years.

Public suppliers to the Italian administration will issue a FatturaPA, the e-invoice in Italy. They will access the Sistema di Interscambio (SdI) portal to deliver the message, which must include an electronic signature. The archiving process requires additional steps, such as electronic signatures and time stamps, to align with the Conservazione Sostitutiva law.

Mentioned here are specifications such as verification mechanisms; electronic signatures; invoice formats (PEPPOL, national formats adapted to the requirements of the European Directive); mandatory storage periods; prior administrative procedures; and how to access the electronic portal for delivery of the e-invoice to the contracting authority.

EDICOM offers you a complete guide to electronic invoicing with public administrations in the European Union, detailing the invoicing models for each country.

One Solution to Connect to all Public Administrations

The use of EDI solutions makes working in different markets easier. EDICOM's integrated electronic communications platform with e-invoicing and VAT compliance capabilities manages electronic invoices both with public administrations in the EU and between private companies (B2B2G), in line with national specifications.

This platform allows for the delivery of electronic invoices to any public administration from a single solution. It can establish a connection with any public entity in the European Union.

EDICOM's international electronic invoicing platform is aligned with the objectives of public e-Procurement in the European Union: to simplify tax compliance and reduce economic costs.

*The contents of this publication belong solely to EDICOM GROUP and do not necessarily reflect the opinion of the European Union.