Peppol E-invoicing by Country - The
Up until recently, in most countries, e-invoicing was sporadically used throughout the private sector, with different VAN operators creating custom B2B connections. While this still occurs, there has been a noticeable shift. E-invoicing is moving steadily to the heart of policies coordinated by national governments around the world. There are a few key reasons for this:
- Increased competition, which is driving the need to cut costs through digitization.
- Rising levels of remote working as a result of the Covid pandemic.
- Growing instances of invoice fraud.
- An increasingly global market.
Despite the positive steps taken by national bodies, we will see from our overview of different regions that efforts to coordinate e-invoicing are sporadic and don’t necessarily lead to the interoperable exchange of electronic invoices.
In this report, we will provide an overview of e-invoicing efforts in different regions around the world, and then examine the Peppol network as the preferred solution.
Why Peppol? It is the most evolved electronic document exchange network in the world, uniting different service providers, so that Peppol participants from both public and private sectors can reach any other participant globally with ease. Additionally, the security and reduction in manual handling that the network provides has made the Peppol invoice the national standard for a growing number of countries; starting with Peppol EU and moving into the ASEAN region, with Peppol Singapore, Peppol Australia and New Zealand, and most recently, Peppol Japan.
E-invoicing developments and trends around the world
Initially run as a pilot project by the European Commission, Europe is the home of the Peppol edelivery network, utilized with these specific aims in mind:
- Digitize manual processing of electronic documentation.
- Create one interoperable system that does away with different national e-invoicing standards.
- Make the e-procurement process fairer across the bloc.
Peppol is no longer funded by the EU, and is now maintained by a non-profit consortium called OpenPeppol; however it is the preferred network for e-invoicing due to its compliance with EU directive 2014/55/EU. Coming into full force on April 18, 2020, the directive states that all public entities are required to use e-invoicing in accordance with the EN16931 standard, which the Peppol Business Interoperability Specifications (BIS) are based on.
Early adopters of e-invoicing, or countries with their own established systems, are either adapting their system to comply with the European standard, replacing the national standard with Peppol, or most commonly, having the national network and Peppol network operate side-by-side.
Unlike Europe, Asia has seen national approaches to e-invoicing, rather than any coordinated effort throughout the region. Singapore became the first country outside of Europe to establish a Peppol Authority in 2018, and they were joined by Japan in September 2021.Read more about Singapore and Japan below
Other Asian countries either do not have a national e-invoicing framework, or are pushing ahead with their own model. The Philippine Department of Finance is planning an e-invoicing pilot project for early 2022, which if successful, will extend to B2B and B2C. They are following in the footsteps of South Korea, which has had its e-Tax system since 2011. In the country, issuing VAT e-invoices to both partners and the tax department is mandatory for businesses or individuals whose activities meet a certain value threshold.
In further developments, China is continuing to develop its Fapiao system, which requires e-invoices to be sent through the government’s tax system. Still in development, it is being trialed in just a few provinces for the moment. India is also on the verge of a more wide-scale rollout, with B2G e-invoices being mandatory since October 2020. This is expected to be extended to B2B transactions in the near future.
Latin America is an e-invoicing success story, with widespread penetration throughout the continent. Chile was the first country to introduce e-invoicing in the region all the way back in 2003, and has been joined by Brazil, Argentina, Mexico, Ecuador, and Uruguay with whole country rollouts in order to help with data collection and the prevention of tax fraud, which has been plaguing the region. To this end, these countries operate under clearance models, where the invoice sender needs to clear their invoice with the local tax office before it is delivered to the receiver.
As other Latin American countries such as Colombia, Guatemala, and Peru extend their e-invoicing mandates, Honduras, El Salvador, and Bolivia, among others, are preparing their own national e-invoicing strategies.
As noted in the Billentis 2021 E-invoicing & E-billing Market Overview, unlike many other countries, the public sector has not been a catalyst in the area of electric document transfer. Rather, payment, trade finance, dynamic discounting and procurement in B2B markets have driven the trend. Noting this, as of very recently the American Federal Reserve, in cooperation with the Business Payments Coalition (BPC), have signed up 73 businesses (so far) to a pilot project that will enable any business to exchange e-invoices in America. Very similar to Peppol, the e-document exchange framework will be based on the four-corner model, but instead of being used first in the public sector, it will be tested within the private sector.
Further north, Canada introduced structured data e-invoicing in 2017, using Universal Business Language (UBL) as a national standard; however, it is not mandatory at this point.
Middle East and Africa
Like Asia, the Middle East and Africa have seen sporadic uptake in the B2B sector, with some national drives from individual countries. Saudia Arabia, for example, has recently signed into law that by the end of 2021, all B2B transactions must be conducted through e-invoicing. This is a quick development for a country that only introduced VAT in 2018. Neighbouring UAE is also encouraging e-invoicing, but it is not yet mandatory, while in Israel, officials are proposing a model similar to Chile, whereby B2B invoices over a certain amount must be cleared by the national tax authority.
South Africa is one of the leaders on the continent with an e-invoicing system that’s fully operational. They have been joined by Tunisia in 2016, where e-invoicing is mandatory for taxpayers falling over a threshold set by the government. More recently, Egypt made e-invoicing mandatory for all registered businesses within the country in April 2020.
Uniting national e-invoicing systems
As we have seen, countries around the world are bringing in their own e-invoicing requirements and standards to achieve the aims of cost reduction, tax control, better use of data, and of course, efficiency. While this is indeed a step that benefits both governments and businesses, there is still the problem of making sure that the different e-invoicing systems are able to convert documents to the format required by the country where the transacting entity is based. If working within one country, there will often be “one” national system for uploading and sending e-documents, but when transacting with international partners, this is a different story.
At the moment, many businesses still use VAN operators, who set up custom individual closed networks between your business and another. VANs can be both costly and inefficient, as a new connection needs to be established with each new trading partner.
For bigger businesses that have their own ERP system, they can make the choice to either pay VAN operators, or develop and maintain integrations themselves through an in-house IT team. While this may give the company more freedom and flexibility, it can be even more expensive than using a third-party service provider.
For blocs such as the EU, where procurement across all 27 countries is encouraged, siloed national systems do not work, which is how the Peppol standard came about; a connect once, reach all network that unites national e-invoicing systems and does away with the individual connections shown above.
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Peppol for e-invoicing — network growth
Why is Peppol being used?
As mentioned above, the Peppol standard for invoice generation (as well as other e-documents) came out of a desire to provide public sector suppliers in the EU with a more equal footing when bidding for e-procurement contracts. Smaller private sector suppliers, or suppliers located in countries without national e-invoicing infrastructure, could take advantage of Peppol without having to pay for the aforementioned VAN connections or build a custom ERP system.
Good for the suppliers, Peppol e-procurement is equally as beneficial to public sector organizations. According to the European Commission:
Greater competition in the public sector, combined with the efficiencies of e-invoicing is calculated to save huge sums. While it is hard to find consistent figures, we can look at a smaller scale study done in Belgium projecting savings of €3.5 billion per year in the country alone.
For private companies and public sector organizations of all sizes, Peppol doesn’t just allow for cost savings; it also:
- Reduces manual errors.
- Ensures security where invoice fraud is a constant and mounting concern.
- Removes time consuming review and approval processes.
- Integrates with a business’s current ERP software easily.
Go to our page What is Peppol and How Can Your Organization Benefit? to read more about:
- The technical components of Peppol.
- Peppol benefits in detail.
- How you can operate a Peppol Access Point with ease.
Peppol is expanding
Due to the clear benefits listed above, Peppol has expanded beyond Europe and gone global. According to figures collected by the network’s governing body, OpenPeppol, there are:
39 countries with Peppol members
Peppol Authorities in 17 countries
130 mln transactions between Access Points from mid-2019 to mid-2020
Sources: All figures taken from the 12th & 13th Peppol general assemblies and the OpenPeppol website.
Presently, Peppol expansion is most prominent in ASEAN countries, taken up as part of various national digitization and e-invoicing strategies, as we will see in our next section.
Peppol and e-invoicing by country: an in-depth look
As e-invoicing becomes central to business and governmental efficiency, we have sought to highlight some of the different countries that are implementing e-invoicing with Peppol to great effect.
Peppol Sweden, Norway, and Denmark
By statistics, the Nordic states are the most advanced in terms of e-invoicing, with countries such as Sweden and Denmark establishing national e-invoicing standards in the early 2000’s. Peppol Norway is the biggest success story with 99% of the country’s contracting authorities using Peppol for electronic documentation.
See more in our blog post on Peppol Denmark, Sweden and Norway.
Germany had already enacted a law stipulating that national public authorities must have the capability to receive and process invoices according to the country’s national standard, XRechnung. By 2018, a Peppol authority was established in the country, with the Peppol standard being used along with XRechnung and ZUGFeRD 2.0, which also provides data as a readable PDF document.
See more in our blog post on Peppol in Germany.
Peppol in France
Similar to Germany, France has its own national invoicing template, called Factur-X, and its own platform through which to send e-invoices, ChorusPro. In 2020, ChorusPro handled 54.6 million e-invoices. This number is only set to grow as France prepares for mandatory B2B e-invoicing in 2023.
Some businesses are making the switch to Peppol, as it supports Factur-X standards while allowing a greater degree of automation and complete compliance when sending e-invoices to other countries in the European Union.
See more in our blog post on Peppol in France.
Peppol in Australia and New Zealand
Both countries have brought in Peppol at a national level, signing the Trans-Tasman Electronic Invoicing Agreement in October 2018 in order to signal a common approach and mutual recognition between Peppol AU and Peppol NZ in this digital endeavor. Both countries have their own Peppol Authorities, and by July 2022, Australia has mandated that the government sector use Peppol for e-invoicing (spelt by the authorities in all official communications as eInvoicing). This strong step should encourage SMEs in the region, 90% of which still use paper invoicing, to explore Peppol benefits.
See more in our blog post on Peppol in Australia and New Zealand.
The Peppol network Singapore is used as part of the national Invoice Now initiative, part of the country’s digital drive to remain competitive in the context of global trade. Singapore was the first country outside of Europe to house a Peppol authority, and have had greater than expected uptake over the last three years.
Statistics from the Peppol Directory reveal that Singapore is one of the countries with the most Peppol receivers in the world, with close to 50,000 participants registered.
See more in our blog post on Peppol in Singapore.
Japan is the most recent country to have joined the Peppol network, with the country’s Digital Agency attempting to rapidly modernize a country that is ranked last out of 31 developed countries in terms of online administrative processes.
With the E-invoice Promotion Association (EIPA) making e-invoicing a national priority, Japan joins Australia, New Zealand, and Singapore Peppol adoption in the ASEAN region.
See more in our blog post on Peppol in Japan.
Tickstar’s Galaxy Gateway provides global Peppol infrastructure
No matter which country you are based in, Tickstar can support you. Its Galaxy Gateway software is not just another Peppol Access Point provider, but the largest infrastructure provider in the world, providing Peppol services to major ERP software such as SAP and Xero.
We fast track the Access Point accreditation process, with shared instance and white labeled options, meaning you can choose what best works for your business. Galaxy Gateway helps:
- Public sector organizations and private companies with their own ERP systems to quickly integrate the Peppol network.
- ERP vendors to incorporate Peppol as part of their software package.
- Service providers and VAN operators to offer Peppol as part of their services.
- Consulting companies to provide Peppol services to clients that would benefit from the network.
Working with private European companies of all backgrounds, governments of Singapore and the Netherlands, and public sector organizations in Australia, we extend our dependable and customizable services to everyone that needs them. We offer a very competitive pricing structure, especially for companies transacting large volumes of business documents such as e-invoices.
Using Tickstar’s services gives our customers uncomparable stability, security, and scalability while continuously conforming to each new requirement from OpenPeppol and Peppol authorities around the world.
Galaxy Gateway ensures:
- The ongoing development and maintenance of your Peppol connection according to requirements mandated by OpenPeppol.
- Scalability, so you can work with a growing number of clients quickly and without technical disruptions.
- Current and upcoming certifications for all Peppol Authorities and regions.
We also provide:
- Comprehensive onboarding and documentation so you can get started easily.
- Additional features such as Peppol document validation, Peppol Participant Lookup API, IP whitelisting for your business environment, and encryption at rest.
- New advanced features that the Tickstar Team develops and adds to Galaxy Gateway Services.
- Stunning support and error handling.
Estimate e-invoicing costs
If you would like to explore how Galaxy can best assist your particular business, get a detailed pricing estimate, or see how Peppol works, book a meeting with a member of our knowledgeable team.