Electronic invoicing, or “e-invoicing,” means sending or receiving invoices in a standardized, machine-readable electronic format (as opposed to unstructured formats such as email-delivered PDFs or paper invoices).
Requirements for the specific e-invoicing format (such as XML, JSON, or UBL) and the transmission network (such as the global PEPPOL network or SDI in Italy) vary from country to country. For certain regions with e-invoicing mandates, there may also be additional requirements to report e-invoice data to the tax administration (“e-reporting” or “real-time reporting”).
Incorporating e-invoicing into billing processes is increasingly common as it allows for more systematic and consistent tracking of invoices across buyers and sellers. E-invoicing is also mandated for certain types of transactions in an effort to increase tax compliance. Countries that require e-invoices include France, Italy, and Germany in Europe, and Mexico and Brazil in Latin America.
The requirement to use e-invoicing is often limited to specific transaction types (B2B), verticals (government buyers), or cross-border status (domestic sales only).
Consult with your tax or legal advisor to determine whether and which e-invoicing and e-reporting requirements apply to your business per the latest rules and regulations.