To understand where e-invoicing is heading, we need to understand where it came from. Below are some key events in the history of e-invoicing.
1965 — The first e-invoice
Believe it or not, the first electronic invoices were sent over 50 years ago, in 1965, using electronic data interchange (EDI).
1975 — Introduction of File Transfer Protocol (FTP)
FTP was introduced in 1975 and enabled easy file transfer via the internet. Heading into the 1980s, large retail and car manufacturing companies began encouraging their suppliers to use EDI.
2001 — Chile introduced voluntary e-invoicing
Chile was the first country to introduce voluntary e-invoicing. This served to develop other e-invoicing schemes across Latin America. Today, Chile, Argentina, Brazil, Ecuador, Mexico, Peru and Uruguay have mature e-invoicing systems.
After e-invoicing took off in LATAM, countries in Europe followed suit.
2008 — Portugal adopted SAF-T
SAF-T is an international standard developed for the efficient exchange of information between tax authorities and businesses. Portugal became the first country to require companies to export a standard audit file for tax purposes.
Today, seven countries have introduced legislation enforcing SAF-T requirements: Portugal, Luxembourg, France, Austria, Poland, Lithuania and Norway.
2008 — Introduction of PEPPOL
The Pan-European Public Procurement Online (peppol) model was initiated in 2008 to simplify electronic procurement across borders. The model developed technology standards and certified providers that could be accessed across all governments within Europe.
The overall objective was to enable businesses to communicate electronically with any European government institution in the procurement process, increasing efficiency and reducing costs. Now, there are OpenPeppol members in 40 countries in total — 32 countries in Europe plus Australia, Canada, China, Japan, Mexico, New Zealand, Singapore and USA.
2014 — Italy became the first European country to mandate e-invoicing
This was a pivotal event in the history of e-invoicing. Italy made e-invoicing mandatory for B2G transactions in an effort to reduce the VAT gap. The move sparked an e-invoicing mandate wave across Europe — not only in B2G transactions, but B2B too.
As it stands, 83 countries have e-invoicing legislation in place. Within five years, we expect the majority of countries in Europe will have followed suit.
2017-2022 — The global proliferation of e-invoicing and new technologies
The e-invoice has transformed dramatically since the 2000s. Authorities have developed novel ways of tax digitalisation, making payment simpler for taxpayers and transactions more transparent for tax authorities. For instance:
The U.S. is the only major economy in the world without a federal VAT or GST system. Because sales tax is levied, reported, and administered at a state and local level with no input tax credits or recovery, formal invoicing content requirements haven’t developed. However, the Business Payments Coalition (BPC), organised and led by the Federal Reserve Bank of Minneapolis, is a group set up to promote the greater adoption of electronic B2B payments, remittance data, and invoicing. The BPC is developing standards and requirements to enable the broad exchange of e-invoices in the U.S. It has created and developed a proof-of-concept for an e-invoice exchange framework and has launched an E-invoice Exchange Market Pilot to further prove the feasibility and viability for a federal network model for e-invoicing.
