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.
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