Estonia continues to lead the charge in digital transformation with a new mandate on e-Invoicing set to take effect in July 2025. Following amendments to the Accounting Act, the Estonian Parliament has approved mandatory B2B e-Invoicing upon the buyer’s request. Although this new regulation has been delayed by six months from its initial proposal, it represents a significant step towards greater transparency and efficiency in business transactions.
What Does the New Mandate Entail?
The new amendments specify that starting from July 1, 2025, any entity listed in the Estonian Commercial Register as an e-Invoice recipient – whether from the private or public sector – can request that their suppliers issue invoices in an electronic format. The mandate will apply across various sectors, making it essential for businesses to ensure their invoicing systems are ready to meet these requirements.
Role of the Commercial Register
The Estonian Commercial Register will be a central component of this system, serving as a repository for data on e-Invoice handlers and reception channels. This ensures that relevant information is accessible and allows buyers to seamlessly request e-Invoices for their transactions.
Entities in the register can specify their preferred e-Invoice format, making it easier for sellers to comply with the buyer’s request. The inclusion of both private and public sector entities in the Register means that a wide range of businesses and organizations will be affected by this new regulation.
E-Invoice Standards: A Move Towards Uniformity
By default, the e-Invoice standard to be used will be the European e-Invoice standard (EU EN16931). However, the legislation allows flexibility, enabling businesses to agree on a different e-Invoice standard if both parties prefer. This flexibility is crucial for accommodating the diverse needs of businesses while promoting a move towards standardized electronic invoicing practices.
The adoption of the EU e-Invoice standard will streamline processes, reduce errors, and enhance data security, making it easier for businesses to handle and process invoices electronically.
How Should Businesses Prepare?
- Review E-Invoicing Systems: Ensure that your current invoicing systems are compatible with the EU EN16931 standard or any other agreed format.
- Check Registration in the Commercial Register: Make sure your entity is properly listed with updated e-Invoice handler data and reception channel information.
- Communicate with Partners: Engage in discussions with buyers and sellers to understand their e-Invoicing preferences and prepare for a smooth transition.
With the July 2025 deadline approaching, businesses should start preparing now to align their systems and processes with the new requirements. Early compliance will not only avoid potential disruptions but also position companies to benefit from the enhanced efficiency and transparency that e-Invoicing offers.
Estonia’s move towards mandatory B2B e-Invoicing is part of a broader trend across Europe, highlighting the growing importance of digital transformation in business processes. By staying ahead of these changes, companies can ensure compliance while embracing a more streamlined and modern approach to managing transactions.
