Finland Expands Adoption of E-Invoicing

Gabriel Pezzato
April 28, 2020

Finland’s government already receives over 90% of invoices electronically. Aiming to expand the use of e-invoices in B2B transactions, the country has granted B2B buyers the right to receive a structured electronic invoice from their suppliers if requested. The scheme applies to all Finnish companies with a turnover above €10,000 and came into force on 1 April 2020.

A smart move

By making e-invoicing optional for B2B companies, the Finnish government has bypassed the need for a caveat from the EU Commission based on the VAT Directive. This would have been needed if e-invoicing for B2B transactions were to have been made mandatory. While the European Union’s strategy around the freedom of format requires the recipient’s acceptance to receive an e-invoice, Finland has tackled this from a different angle. Its aim is to increase B2B e-invoicing by turning this around and instead giving buyers the right to require that their suppliers provide e-invoices.

Freedom of format

The Finnish law still allows companies trading in Finland to leverage the freedom of format and ensure integrity and authenticity through any of the accepted methods. This would for example include the application of an electronic signature. On the other hand, the buyer’s right to ask for an e-invoice is limited to invoices issued following the European norm (EN 16931). There are currently two Finnish formats which correspond to the European standard: TEAPPSXML 3.0 and Finvoice 3.0.
The change in the Finnish e-invoicing regulation was introduced during the transposition of the EU Directive on e-invoicing in public procurement. Finland took advantage of the context and expanded the use of the European norm in B2B transactions, where the format is slowly gaining traction pushed by the mandatory use of the EU standard in B2G supplies.

Wider adoption of e-invoicing

This clever initiative by the Finnish government has the potential to increase the use and acceptance of e-invoices whilst also spreading the European standard. It creates opportunities for procure-to-pay solution strategies and for greater efficiencies for companies who operate with a high volume of unstructured invoices. As has been seen across the globe, e-invoicing presents opportunities for governments and companies alike as governments seek to close VAT gaps and companies look for operating efficiencies.

Take Action

Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Gabriel Pezzato

Gabriel Pezzato is a Regulatory Counsel at Sovos. Based in Stockholm and originally from Brazil, Gabriel’s background is in tax, corporate and administrative law. Gabriel earned a Law degree and a specialization degree in Tax Law in his home country and has a master’s degree in International and European Tax Law from Uppsala University (Sweden).
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

ShipCompliant
August 10, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (August 2020)

Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and get […]

Tax Compliance
August 7, 2020
GAO Urges IRS to Overhaul 1099 Reporting for the Gig

A couple of weeks ago, the Government Accountability Office (GAO) released a report to the Senate Finance Committee describing the issues the IRS faces in enforcing income tax compliance for gig economy workers. The report highlighted long-standing issues the government has been grappling with in receiving tax information necessary to enforce compliance along with specific […]

EMEA VAT & Fiscal Reporting
August 4, 2020
New VAT Rules for Online Marketplaces and Imports of Goods into the UK

The United Kingdom’s HMRC has issued new guidance on the VAT treatment of cross-border sales of goods and online marketplaces beginning 1 January 2021, following the end of the transition period. Cross-Border Sales under £135 New rules will apply when a business sells goods for £135 or less to a UK customer and the goods […]

EMEA VAT & Fiscal Reporting
August 3, 2020
New EU Tax Package: VAT Priorities

On 15 July 2020, the European Commission (EC) adopted a new Tax Package, intended to increase tax compliance while reducing administrative burden on businesses. The Tax Package contains a number of proposals related to VAT, of which three in particular stand out: A single EU VAT registration for taxpayers; Modernized VAT reporting obligations; and Facilitated […]

IPT
August 3, 2020
Should Insurers Receive an IPT Holiday From Their Governments?

It’s been a tough year for businesses. Whilst many have accepted that 2020 is likely to be a year to forget, unfortunately tax still needs filing and paying. Tax authorities have been understanding – nobody could have foreseen this – and there has been a concerted effort to provide SMEs with tax relief and postponements […]