Luxembourg Makes Progress With The Mandatory Electronic Invoice

The government of Luxembourg has begun a gradual adoption of the electronic invoice by government institutions.

On December 13, 2021, the Luxembourgish government published a national regulation detailing the gradual mandatory obligation of companies to send electronic invoices to government institutions through the PEPPOL network. The implementation based on a company’s size will begin in May 2022 and will be completed in March 2023. This regulation modifies the law of May 16, 2019, on B2G electronic invoicing. 

This Project is part of the European Union’s digitalization plan according to Directive 2014/55/EU, which looks to simplify administrative processes and to reinforce internal security and reduce paper use. 

This new electronic invoicing requirement will be introduced as an effort to increase transparency in the tax authority, as well to improve the efficiency of transactions with public administrations. 

The implementation of the electronic invoice for public contracts and concessions looks to:

• Reduce bureaucracy and increase the efficiency of administrative and commercial processes.
• Reduce processing costs and make invoice reception faster. 
• Fight tax fraud with complete control of electronic invoicing flows. 

Implementation phases of the electronic invoice in Luxembourg

The mandatory electronic invoice is being introduced by the Luxembourgish government as part of an effort to reduce fraud and improve transparency. 

However, it is expected that that this change will cause major challenges for small and medium companies. To mitigate the impact the government has created a series of compliance deadlines that give time to companies to comply based on their size detailed below:

Large Companies

It will be mandatory to electronically invoice for large companies as of May 18, 2022.

A large company is defined as one that complies with at least two of the following conditions:

• Has a balance of over 20 million Euros. 
• Annual invoicing of over 40 million Euros.
• Over 250 employees (full time)

Medium Companies

It will be mandatory for medium companies to electronically invoice as of October 18, 2022. 

To qualify as a medium company at least two of the following conditions must be met: 

• Has a balance between 4.4 and 20 million Euros
• Annual invoicing between 8.8 and 20 million Euros. 
• Between 50 and 250 employees (full time).

Small companies

Finally, small companies will be given more time to comply with a compliance deadline of March 18, 2023. 

Small companies are those that do not meet the above characteristics and meet the following conditions:

• Maximum balance of 4.4 million Euros.
• Annual maximum invoicing of 8.8 million Euros.
• Maximum of 50 employees (full time)

This final date will apply to companies for which at least one of the three characteristics apply. 

The electronic invoicing system in Luxembourg: The PEPPOL network

The development of the electronic invoice in Luxembourg is being managed by the Center of Digitalization and Information Technology of the State (Centre des technologies de l'information de l'État).

It is important to highlight that electronic invoicing with the public administration was already optional in line with the European norm. 

In order to increase adoption throughout the country to propel digitalization the government has decided to make all its providers comply with electronic invoicing. 

To make compliance easier it has decided to use the single delivery network PEPPOL (using the standard PEPPOL BIS 3.0 format) which must be used by all contracting public administrations to receive electronic invoices automatically.

• The state administrations use the common PEPPOL-AP designated by the Center of Digitalization and Information Technology of the State.
• Other contract awarding authorities will use the PEPPOL-AP assigned by the   Center of Digitalization and Information Technology of the State as long as they don’t have their own access point. 
• Companies must contract their own Access Points. 

Companies with a low invoicing volume can issue electronic invoices manually through a in a website that uses webforms to create and deliver compliant invoices. 

EDICOM as an electronic invoicing platform

Luxembourg has made electronic invoicing mandatory for suppliers of public administrations beginning in 2022. This means that only companies that can generate electronic invoices and establish connections with the Luxembourgish public administrations will be able to participate in public contracts. 

This makes it imperative for companies to contract a solution that will enable them to invoice the country’s public administrations. 

EDICOM’s international global e-invoicing solution simplifies the adaptation of your system to comply with the requirements of the electronic invoice in Luxembourg and guarantees compatibility with different accounting software. 

EDICOM is a PEPPOL Access Point and provides a secure connection to the PEPPOL network designated as the mandatory communication network by the Luxembourgish government.

EDICOM coordinates GOVEIN2019 project (Action No: 2019-EU-IA-0046)

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