The Past, Present, and Future of E-invoicing Mandates Around the World: A 2024 Overview

Currently, over 100 countries find themselves in the process of implementing e-invoicing mandates. While some nations are initiating consultations, others are in the phase of drafting legislation, and still others are exploring various model options. The momentum behind electronic invoicing is growing as countries increasingly view it as a crucial component of their digitization initiatives and a strategic measure to combat the VAT gap and tax fraud.

Past and present e-invoicing mandates

Latin American countries pioneered digital invoicing over 20 years ago, with Brazil, Chile, and Mexico leading the charge, subsequently inspiring the rest of the continent. In Europe, the focus initially leaned towards public procurement and business-to-government transactions. Real-time reporting ran parallel to invoicing, with a tendency towards consolidated reporting occurring periodically every few days or months.

Italy emerged as the European frontrunner in e-invoicing adoption in 2019, steadily expanding the scope of its mandate each year thereafter. By 2022, e-invoicing mandates had spread across the EU. While some countries like Portugal may not mandate e-invoicing for B2B transactions, they enforce strict requirements on invoice issuance, including the use of certified software, QR codes, and pre-cleared invoice numbers from tax authorities. This trend has persisted, with 2024 marking a significant milestone year.

In the coming years, we anticipate significant developments in e-invoicing mandates, with Belgium, Poland, and Malaysia ready to establish foundational regulations. These initiatives will likely pave the way for further mandates over the next two to three years.

Countries preparing for e-invoicing

• Ireland: Soon, a summary of the Irish public consultation process, incorporating business contributions, will be compiled, presenting conclusions and implications for the future.
• Croatia: Having submitted a request for derogation last year, Croatia anticipates implementing an invoicing mandate by 2026.
• Philippines: Businesses operating in the Philippines will be required to commence e-invoice reporting via a governmental portal in H2 2024.
• Oman: Oman is initiating a voluntary e-invoicing program commencing in April 2024, with mandatory e-invoicing for large entities scheduled to begin in October 2024.
• UAE: In the fall of 2024, the United Arab Emirates plans to issue a draft of technical requirements for Accredited Service Providers offering e-invoicing solutions. The phase one launch of the e-invoicing mandate in the UAE is scheduled for July 2026.

ViDA – VAT in the Digital Age

VAT in the Digital Age (ViDA), an initiative started by the European Commission, is going to revolutionize and digitize how organizations manage their VAT responsibilities. The primary objective is to establish standardized protocols and foster the adoption of e-invoicing across the EU.

ViDA aims to remove barriers and complexities associated with implementation at the member state level and introduce mandatory e-invoicing for specific supplies. The initiative also seeks to eliminate obstacles for businesses in adopting e-invoicing before mandates are enacted in individual countries.

ViDA rules are structured around three key pillars:

1. VAT regulations concerning the platform economy.
2. Single VAT registration for businesses selling to consumers across the EU.
3. Digital reporting requirements encompassing two obligations:
   • Mandatory invoicing obligation for domestic transactions (already implemented in countries like Romania, with plans in Poland and France).
   • E-reporting obligation applicable to non-domestic or EU transactions.

VAT in the Digital Age timeline and public consultation

Initially, ViDA’s timeline was to introduce mandatory invoicing for domestic transactions starting in 2024 and mandatory digital reporting requirements from 2028. However, introducing the first version of the ViDA initiative in December 2022 brought forth numerous proposals, slowing down implementation.

In October 2023, the European Parliament commenced voting on amendments suggested to the EU Commission proposal under the ViDA initiative. The initial December 2023 vote was postponed.

The objective is to garner consensus on a unified model, although it’s challenging to align 27 Member States, each with varying reporting and invoicing systems, and differing needs. Considering the timeline for the introduction of ViDA, 2030 emerges as the most feasible target date.

As ViDA work on ViDA continues in 2024, involving renegotiations and further discussions, it’s good to stay updated with its status, because the initiative can reshape tax laws across EU member states further.

ViDA changes sparking debates

• Invoice format: The proposal suggests extending the EU standard for B2G transactions to B2B transactions. Stakeholders have proposed a hybrid format to accommodate small businesses, ensuring readability of invoice content, which can be challenging with structured invoices.
• Derogation requirement removal: Currently, EU countries seeking to mandate invoicing must request derogation from the EU, involving a formal process and potential updates. ViDA aims to eliminate this requirement for domestic invoices, as acceptance from the buyer is unnecessary.
• Invoicing data reporting: Under ViDA, companies would be required to report invoicing data within eight days, sparking debates over the feasibility of this timeline and discussions on reporting frequency.
• Preclearance model exclusion: Many countries have already adopted preclearance or centralized models, necessitating validation by tax administrations before transmission to buyers.
• Data requirements: ViDA proposes specific data requirements for e-reporting, such as bank details and invoice content.

Anticipating the ViDA initiative, likely to be fully implemented around 2030, every EU member state will probably adopt e-invoicing mandates. However, ViDA's timeline doesn't mark the beginning but rather the culmination of efforts in the EU.

E-invoicing beyond the EU and Latin America

E-invoicing has transcended geographical boundaries. Oman, at the beginning of its e-invoicing journey, is not the only GCC country to gear up for those changes.

The Kingdom of Saudi Arabia has been progressively expanding its e-invoicing mandates to encompass more businesses monthly, announcing new phases and lowering compliance thresholds. Meanwhile, the United Arab Emirates has signaled its intent to introduce e-invoicing as a strategic initiative to drive digitization and enhance tax compliance.

The global e-invoicing effort

Electronic invoicing is becoming increasingly prevalent worldwide. Even if it's not currently mandated in your country of operation, it's likely to be in the future. Therefore, it's wise to begin preparing for its implementation now, as the process can be time-consuming, involving successful testing and partner onboarding. Rest assured, Comarch specialists will handle all aspects of this transition.

Comarch is a trusted provider of up to date global e-invoicing news. With over 20 years of experience in delivering efficient e-document exchange solutions, Comarch offers a seamless and hands-off implementation process. Furthermore, you can enjoy automatic compliance with evolving regulations through regular updates. Interested in learning more? Visit the Comarch e-Invoicing website or schedule a discovery call with our consultants today.

There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.