Tax compliant e-invoicing

E-invoicing mandates the electronic transmission of invoices to the buyer or tax authority. This transmission typically happens either through a government portal or networks like PEPPOL. E-invoicing involves extracting specific fields from billing system data and generating country-specific structured file formats, often in XML.

E-invoicing mandates vary by country. Some, like Italy, follow the clearance method, where invoices must be submitted to a government portal for validation before being sent to the buyer. Others, such as Portugal, use the post-audit method, allowing invoices to be sent directly to the buyer in a specified electronic format. Typically, local governments will notify you when you are required to comply.

It's crucial to understand that e-invoicing mandates generally apply to resident sellers in countries with these rules. And for the few countries looking to extend e-invoicing to non-resident sellers, your billing system should be able to support compliance with templates and custom fields. So, if you're a US business selling internationally, you likely don't need to lose sleep over this.