Countries across the world face similar problems with streamlining processes, eliminating tax avoidance and collecting VAT.

Local governments are introducing eInvoicing regulatory requirements for local and cross-border trade. Already across the EU, government and public sector organisations must use B2G eInvoice processing, and B2B suppliers are being encouraged to do the same.

According to the Billentis market analysis, some 550 billion bills and invoices are exchanged across the world annually, with a roughly equal split between goods and services. And the volume of invoices underpinning electronic transmission and automated processing is expected to quadruple by 2035.

Are you trading across multiple countries?

Does your invoice processing need to stay on top of changing in-country regulatory compliance and RTR? Transalis eInvoice™ gives you the power to trade frictionlessly and seamlessly across global supply chains. If so, check out the Transalis Global Directory.

eInvoice Global Directory

Frictionless Frameworks

Buyers and suppliers in different countries will naturally use a range of eInvoicing service providers and network operators but there is a move to greater interoperability through standardised, frictionless frameworks. Many different organisations are aligning their eInvoicing models so that structured invoices for AR and AP can be exchanged through a common interface.

A key driver worldwide is the common need of most governments to close the so-called VAT gap, the difference between VAT revenue forecasts and what is actually collected ‘on the ground’. In Europe, the annual VAT gap is estimated at a massive €140 billion or 11% of expected revenue.


Cross-border trade

While challenges are often similar throughout the world, countries and regions are approaching solutions in their own ways and at different speeds. Across the European Union, country distinctions are disappearing and making way for an EU-wide standard.

Some countries and regions are further ahead with eInvoicing than others:

Mainland Europe

eInvoicing is a requirement in many European countries, including in Germany and Norway where it is mandated for companies doing business with government.

  • All suppliers to public authorities in Germany have been told to issue invoices electronically since November 2020. Germany also has a jointly developed common eInvoice format with France and, like the UK, operates an information portal with advice on legal requirements.
  • Spain is one of a number of European countries requiring reporting of invoice data not just from suppliers but also from buyers.
    Scandinavia
  • Both Denmark and Sweden operate systems of ensuring ‘integrity and authenticity’, or I&A, from the time when the invoice is issued to the end of a mandated storage period. In Denmark for example, I&A can be established through an audit trail based on business controls linking the invoice processing with the supply of the good or service.
  • In Finland, eInvoicing is mandated for government entities in line with the EU’s technical standard. Since April 2020, buyers in Finland have had a legal right to receive a structured invoice from their suppliers on request. All Finnish companies with turnovers above €10,000 are covered by the rule.

UK

Despite the lead-up to Brexit, the UK government implemented an EU directive on eInvoicing in public procurement. It requires contracting authorities and their suppliers to comply with an EU technical standard.

Even among private business transactions in the UK, the electronic submission of VAT is happening more and more as trading network responds to greater regulation.

South America

Brazil has seen a $58 billion uplift in tax revenue by moving away from conventional paper-based invoicing models. The Brazilian government tax authority requires invoices to be issued before goods are shipped. The authority sends the signed invoice back to the supplier and checks that the goods or services have indeed been shipped or supplied following invoicing.

Chile, Mexico, and Columbia have all reduced their VAT gaps by up to 50% through mandates for eInvoicing.


You can also get in contact with our expert team on 0845 123 3746 or +44 1978 369 343 (for international callers), or contact us via email sales@transalis.com