Navigating E-invoicing Postponements Q&A

The past year has been a rollercoaster for businesses grappling with the e-invoicing and e-reporting regulations. Deadlines have shifted, technical requirements have been revised, and the overall electronic data interchange (EDI) environment has undergone many changes. These disruptions have impacted entrepreneurs across the globe, leaving many wondering how to navigate this new reality and prepare for the future of mandatory e-invoicing.

Let’s review the current state of e-invoicing regulations, drawing insights from a recent webinar hosted by Comarch (feat. PwC) with this Q&A article. We'll explore the latest global updates, unpack the reasons behind the recent changes, and provide guidance on developing a successful implementation strategy for your business.

What are the biggest challenges companies face in implementing e-invoicing requirements, and how can they optimize the process?

Here are some steps companies can take to optimize their approach to e-invoicing with these varying regulations across countries:

1. Gain visibility: Develop a clear understanding of upcoming changes and their impact on your business. Creating an action plan is crucial for staying ahead of the curve.
2. Manage stakeholders effectively: E-invoicing isn't just an IT concern. It affects various departments, including finance, legal, and IT. Implementing a proper stakeholder management model ensures everyone understands their responsibilities in the process. When external service providers are involved, having a robust governance model becomes even more critical.
3. Assess e-invoicing readiness: Evaluate your existing data environment and its suitability for handling e-invoicing obligations. Identify where data is stored and who is responsible for data quality.
4. Choose the right solution provider: Decide whether to buy, build, or outsource your e-invoicing solution. Selecting a provider that can meet your specific requirements is essential for successful project implementation.
5. Ensure future-proof processes: Remember, e-invoicing is an ongoing process, not a one-time implementation. Stay informed about government updates and ensure your solution provider can capture these changes for a smooth operational phase.

Given the recent delays and potential adjustments to e-invoicing regulations, what is the recommended approach for multinational companies (e.g., those operating in France, Belgium, Poland, and Spain)? Should they prioritize immediate implementation or adopt a wait-and-see strategy?

Even in the face of some uncertainty, a proactive approach is recommended for multinational companies. Here are 4 reasons why:

1. Regardless of delays, having a roadmap ensures you're prepared for upcoming deadlines.
2. The number of countries implementing e-invoicing mandates is rapidly increasing. A reactive approach won't be sustainable.
3. Use this time to get ahead of the curve by familiarizing yourself with the known requirements.
4. E-invoicing impacts various departments like finance, legal, and IT. A well-defined stakeholder management plan ensures everyone understands their roles and responsibilities. This minimizes surprises during implementation.

By taking these steps, you can optimize your multi-country operations and achieve compliance without significant disruptions and unpleasant surprises at the go-live date.

What is the current state of e-invoicing implementation in Germany?

Germany has a relatively tight deadline, with legislation passed in late March 2024 and the first mandate coming into effect in January 2025. However, their approach is unique.

Unlike in other countries, e-invoicing in Germany is introduced by simply modifying the definition of "invoice" within the VAT Act. There is currently no plan for a centralized platform, although this may be considered for reporting purposes only in the future. Additionally, there are numerous exceptions throughout the transition period between 2025 and 2028, making it quite unlikely that the German government will push back the changes as there is simply no need to do so.

It's important to note that the first deadline of January 2025 mainly affects the receiving side of things. This means that buyers will no longer be able to refuse a structured electronic invoice that complies with the European norm for invoicing. The mandate for sending e-invoices will be implemented gradually later on.

In Germany, with the e-invoicing mandate coming into effect in January 2025, what specific actions are required for companies on the receiving end? Will they be obligated to process structured e-invoice formats within ERP systems?

Yes, the first phase of the German e-invoicing mandate, effective January 2025, primarily focuses on the receiving party. This means companies will no longer have the right to refuse structured electronic invoices that comply with the European invoicing standard (EN 16931). While there is currently no mandate for sending e-invoices, this will be implemented gradually in later phases.

Will PEPPOL be used for B2B and B2G documents in Belgium? Currently, businesses use PEPPOL for their B2G documentation.

Yes, the upcoming B2B network is indeed planned to leverage the existing PEPPOL infrastructure that's already utilized for B2G communication.

The draft legislation in Poland seems to abandon the gradual rollout approach outlined previously. Why did this change?

Yes, the proposed legislation doesn't include a phased implementation. The primary reason is that the Polish Ministry of Finance needed to act swiftly. The current VAT Act still states that the mandate will go into effect this year. The Ministry of Finance wanted to avoid confusion and legislative changes happening twice: first to push back the deadline and then again to introduce a more specific timeline and additional VAT Act modifications, which were announced after public consultations earlier this year.

What is the estimated approval date for the Spanish B2B e-invoicing decree?

The decree is expected to be finalized and published by the end of summer 2024, potentially allowing the system to be operational by Q4 2025.

What are the implications of ViDA for e-invoicing in Italy, considering Italy has already mandated e-invoices since 2018? Are any amendments to the existing system anticipated?

The precise impact of ViDA on existing e-invoicing models within the EU, including Italy's well-established system, remains unclear. Discussions surrounding ViDA have been ongoing for years, and there's a lack of definitive information regarding its potential influence. Countries with pre-clearance models, like Italy and potentially Poland, are actively lobbying for exemptions from ViDA's provisions, as these might conflict with their existing systems. We expect more details on this matter to emerge as the current round of negotiations concludes in the coming months.

Are e-invoicing trends or requirements emerging just in Europe?

E-invoicing mandates are being implemented in many countries around the globe, not just in Europe. Countries such as Malaysia have tight deadlines and are transitioning to mandatory e-invoicing starting in August 2024. They imposed a very short deadline with technical specifications only recently made available, creating a challenge for many businesses. Similarly, Singapore is shifting to mandatory invoicing, but with a unique approach. They're focusing on requiring e-invoicing in Singapore for new businesses while taking a voluntary approach for existing ones.

These developments in Malaysia and Singapore will likely influence other APAC countries. Changes are also underway in Africa, with several new requirements being implemented, often with tight deadlines. E-invoicing in the United States differs due to the absence of a VAT or GST system. However, there are initiatives in the United States to pursue an interoperability model inspired by PEPPOL in Europe. DBNA is actively working to improve interoperability between service providers, including those in the American market. So, this trend towards e-invoicing is definitely not limited to Europe; it's a global phenomenon.

With the upcoming e-invoicing mandate in Malaysia, what are the specific requirements for companies that receive invoices? Will they be obligated to integrate with the system and process the XML format by July 2025, or can they still receive and process PDF invoices?

The current plans outlined by the LHDNM, the Malaysian authority responsible for e-invoicing, indicate that the mandate will eventually encompass all stakeholders, including the receiving party. The long-term vision involves a decentralized invoice exchange model, potentially utilizing the PEPPOL network or other approved channels. However, specific details and timelines regarding the receiving side's obligations are likely to be clarified closer to the July 2025 deadline.

Can you share any experts’ insights from the Malaysian pilot phase that began in May 2024?

Our experience with the Malaysian authorities, specifically the LHDNM and other relevant bodies, has been very positive. They have been responsive in providing access credentials and instructions upon request. The pilot program is currently ongoing, and further developments are expected.

The current state of e-invoicing mandates

The trend towards mandatory e-invoicing across the globe is clear, with many deadlines approaching for both B2B and B2G transactions. Companies operating in multiple jurisdictions face a complex challenge, needing to adapt to different models and requirements. However, by taking a proactive approach, businesses can leverage this transition as an opportunity.

As regulations continue to develop, staying informed and adapting your approach will be crucial for success. Comarch, a leading authority on all things e-invoicing, can help you navigate this complex landscape. Schedule a call with our experts today to discuss your specific needs and ensure a smooth transition to e-invoicing compliance.