Businesses: Are you up to speed on e-invoicing?

On 18 March 2023, electronic invoicing became mandatory for all companies issuing invoices to public-sector bodies in Luxembourg. What is an electronic invoice? What are its advantages, and how do you make sure your business is complying with the law?

What is an e-invoice, and who is it for?

An electronic invoice is an invoice issued, sent and received in structured electronic format. That means it can be read and understood automatically by a computer, without the need for human involvement. Although they contain similar information (details of services provided, amount invoiced, etc.), traditional and electronic invoices differ in terms of the formats and transmission methods used.

Since the Law of 13 December 2021 came into effect, e-invoicing has gradually become mandatory for all Luxembourg as well as international firms in the context of public procurement or concession contracts. The new legislation covers all companies issuing invoices to public-sector bodies, including government, municipalities, public authorities and public institutions.

A baker supplying pastries to a public authority for a conference, for example, or an electrician maintaining electrical installations for a municipality, will need to use electronic invoicing from now on.

In other words, it covers all B2G (business to government) contracts for works, supplies and services – regardless of the amount invoiced or size of the firm.

N.B.: An electronic invoice should not be confused with an invoice in PDF or Word format that would be scanned or sent by email. The latter types of invoice are unsecured and are not processed on an automated basis.

All companies – including start-ups – are required to use electronic invoicing for their transactions with public-sector bodies.

How do you set up e-invoicing at your company?

The introduction of mandatory electronic invoicing has been gradual. It initially applied to large enterprises (18 May 2022), before being extended to medium-sized firms (18 October 2022) and finally small businesses too (18 March 2023). From now on, all companies – including start-ups – are required to use e-invoicing for their transactions with public-sector bodies.

If you land a contract with one of these bodies, various solutions are available to help make sure you are compliant with the law. The choice you make will depend on the quantity of invoices you need to send as well as the equipment you have.

You can:

• • use accounting (ERP) or invoicing software to generate compliant electronic invoices and send them directly via the Peppol network, thanks to an integrated file transfer module.
  • rent a Peppol access point from a specialist service provider (list of providers available at peppol.eu). Fees vary depending on the volume of invoices exchanged.
  • Set up your own Peppol access point. This solution is geared more towards large companies that have their own IT department and substantial resources.

If your firm rarely sends invoices to public-sector bodies (one to five per month at most), an alternative, non-automated solution is available from MyGuichet.lu.

If your firm rarely sends invoices to public-sector bodies (one to five per month at most), an alternative, non-automated solution is available from MyGuichet.lu. This secure portal offers two options for capturing and/or sending compliant electronic invoices.

• • If you don’t have a software program that can generate electronic invoices, go to MyGuichet.lu and manually complete a form with the items required in the invoice. This enables you to generate a compliant bill that can be sent via the portal.
  • If you do have a software program that allows you to create legally compliant invoices but don’t have a Peppol access point, you can upload your invoice and send it via MyGuichet.lu.

The legal requirements relating to electronic invoicing cover both the form of electronic invoice (structured and standardised XML format) and channel used for sending it (Peppol or via MyGuichet.lu). So, you won’t be able to send a compliant e-invoice by email, for example.

To help you identify the most appropriate solution for your firm, use the e-invoice diagnostic tool available on the Chamber of Trades website.

N.B.: If you don’t use electronic invoicing when legally required to do so, you will be in breach of the law and run the risk of not having your invoice paid.

E-invoicing enables companies to improve productivity by simplifying management of their invoices and payments.

What are the advantages of e-invoicing?

E-invoicing enables companies to improve productivity by simplifying management of their invoices and payments.

This process is automated, thanks to the Peppol delivery network, and ensures more rapid processing and a reduction in payment times. The cost of setting up electronic invoicing is offset by the elimination of administrative expenses (paper, printing, postage, etc.) as well as a reduction in the processing time spent by employees. In addition, there is less risk of errors or omissions. Accessing the documents becomes easier, as does archiving. Finally, the security of accounting data is improved and the system offers greater traceability of transactions.

Is there any support available for the move to e-invoicing?

The transition to electronic invoicing is a major step in the digitalisation of your firm. To make things easier, take a look at the dedicated website set up by the Ministry for Digitalisation, Chamber of Commerce and Chamber of Trades. There you will find a whole host of useful information, features on various themes, practical guides, as well as an FAQ.

Small and medium-sized enterprises can also consult the Fit 4 Digital programme as well as the SME Packages – Digital, which provide support and grants of up to EUR 5,000 for investing in software that includes an e-invoicing solution. Provided they meet certain conditions, firms can also obtain government investment assistance.

If you have any questions about electronic invoicing, contact the help desks provided by the Ministry for Digitalisation, House of Entrepreneurship or the eHandwierk service.

Good luck!