Estonia Prepares for B2B E-Invoicing by 2027

Estonia is advancing its national e-invoice project as part of broader efforts to modernize and streamline its tax system. The Estonian Ministry of Finance has announced plans to develop legislation that will amend the current VAT Act. This initiative aims to improve the reporting and monitoring of commercial transactions nationwide.

The Ministry’s key considerations include:

• Eliminating the €1,000 threshold for declaring transactions: Currently, transactions under €1,000 are not required to be reported to the tax system. By removing this threshold, all transactions, regardless of value, will need to be declared.
• Introducing mandatory electronic invoicing for B2B transactions subject to VAT: The proposal seeks to make electronic invoicing compulsory for all B2B transactions. This measure is expected to automate tax processes, reduce fraud risk, and simplify administrative obligations for taxpayers.

The draft bill is scheduled for completion in 2025. If approved, it will take effect in 2027, allowing businesses and tax authorities sufficient time to adapt to these new technological and operational requirements.
These reforms are part of Estonia's broader vision for a fully digitized tax administration, aimed at achieving greater efficiency, transparency, and tax compliance.

Additionally, the government has approved amendments to the Accounting Act to expand the use of electronic invoicing among companies. Starting July 1, 2025, companies can register as recipients of e-invoices in the commercial registry, enabling them to require suppliers to send machine-readable electronic invoices.

The two electronic formats permitted are:

• European format  EN16931 UBL - BIS 3.0, CII
• Local format  eXML 1.2

As of now, no additional information or specifications have been released.