July 2025 Accounting Act e-invoicing legislation approved Parliament
Estonia’s Parliament has approved on 18 September 2024 e-invoicing rule changes to the Accounting Act Amendment Act. This seeks to introduce optional mandatory e-invoicing from 1 July 2025 (delayed from the original Jan 2025). This is available to taxpayers registered as e-invoicing recipients in the Estonian e-business register.
Adapting the Estonian Accounting Act for e-invoicing to EN 16931
The bill standardises and simplifies the requirements of the Accounting Act for the circulation and formalization of e-invoices. In the public sector, the submission of e-invoices has been mandatory in Estonia since 2019, but the wider spread of e-invoices in the private sector has rather stalled. The purpose of the bill is to encourage the implementation of a single European standard for e-invoices and to support the full adoption of digital invoicing in the public sector as well as in the private sector.
The current law stipulates the use of two technical standards in parallel: the e-invoice must comply with either the Estonian standard or the European standard. The draft stipulates that in the future only the European standard will be valid.
This would give resident B2B customers the option to insist on e-invoices from their suppliers. This would include revising the definition of ‘machine-processable invoice’ or e-invoice to the EU’s EN 16931 structured e-invoice format. At present, businesses may use an Estonian standard or the EU’s. The Estonian Information Technology and Telecommunication Union has proposed moving to the EN 16931 single format for B2B transactions, too.
In Estonia, the Accounting Act regulates basic accounting functions for all registered business entities.
B2G e-invoicing since 2017
Estonia imposed e-invoicing for B2G transactions in March 2017. It applies either the Estonian UBL, UN/CEFACT CII or the European standard on e-invoicing. There is no central government platform for e-invoice exchange; instead, parties can exchange directly or via commercial intermediaries. Many parties use a Peppol network.
Economic operators must have an accounting software or ERP in place to generate e-invoices or can alternatively outsource the generation of e-invoices to different software providers.
Estonia’s plans may be revised in light of the EU’s own VAT in the Digital Age reforms. This includes a Digital Reporting Requirement pillar with intra-community e-invoicing reforms likely for 2030 or later.
