EUROPEAN COMMISSION

Brussels, 19.2.2024

SWD(2024) 39 final

COMMISSION STAFF WORKING DOCUMENT

EVALUATION

Accompanying the document

Report from the Commission to the European Parliament and the Council

on the effects of Directive 2014/55/EU on the Internal Market and on the uptake of electronic invoicing in public procurement

{COM(2024) 72 final} - {SWD(2024) 40 final}

COMMISSION STAFF WORKING DOCUMENT

EVALUATION

Accompanying the document

Report from the Commission to the European Parliament and the Council

on the effects of Directive 2014/55/EU on the Internal Market and on the uptake of electronic invoicing in public procurement

Table of Contents

1.Introduction

Purpose and scope of the evaluation    

2.What was the expected outcome of the intervention?

2.1. Description of the intervention and its objectives    

2.2. Points of comparison    

3.How has the situation evolved over the evaluation period?

3.1.    Legislative Actions    

3.1.1. Establishment of the new legal framework    

3.1.2. Transposition of the Directive in Member States    

3.1.3. Mandate for suppliers to issue B2G eInvoices in 17 Member States    

3.1.4. Development of the European eInvoicing Standard    

3.2. Non-Legislative Actions    

3.2.1. Peppol    

3.2.2. The e-SENS project    

3.2.3. The Connecting Europe Facility (CEF) Programme (2014-2020)    

3.2.4. The EU Digital Building Blocks    

3.2.5. The eProcurement Ontology    

3.3. Current State of Play    

4.Evaluation findings

4.1.To what extent was the intervention successful and why?

4.1.1.    Effectiveness    

4.1.1.1. General Objective    

4.1.1.2. Specific objectives    

4.1.1.3. Operational Objective    

4.1.2.    Efficiency    

4.1.2.1. Costs and benefits for public authorities    

4.1.2.2. Costs and benefits for economic operators    

4.1.3.    Coherence    

4.1.3.1. Internal coherence    

4.1.3.2. External coherence    

4.2.How did the EU intervention make a difference and to whom?

4.3.Is the intervention still relevant?

4.3.1.    Interoperability challenge at the transmission level    

4.3.2.    Uptake challenge    

4.3.3.    B2B use of the European eInvoicing standard    

4.3.4.    Common approach in B2G, B2B and B2C    

5.What are the conclusions and lessons learned?

5.1.Conclusions

5.2.Lessons Learnt

Annex I: Procedural Information

Annex II. Methodology and Analytical models used

Annex III. Evaluation matrix

Annex IV. Overview of benefits and costs

Annex V. Stakeholders consultation - Synopsis report

Annex VI. Case studies and Country profiles

Glossary

Table 1 Glossary

Purpose and scope of the evaluation

The purpose of this evaluation is to review the implementation and performance of Directive 2014/55/EU of the European Parliament and of the Council of 16 April 2014 on electronic invoicing in public procurement (hereinafter, ‘the Directive’) 1 , and to provide conclusions that can be used as a basis for future policy development.

The evaluation allowed the gathering of valuable insights regarding the Directive's implementation in the Member States. It aimed, in particular, to evaluate whether the Directive has effectively achieved its intended objectives and expected outcomes.

The evaluation of the Directive has followed the European Commission’s Better Regulation Guidelines 2 . A study supporting this ex-post evaluation of the Directive has been carried out by independent consultants 3 . The general public, industry stakeholders and representatives of national administrations have participated in this process. The evaluation has addressed the five mandatory evaluation criteria of relevance, effectiveness, efficiency, consistency, and EU added value.

The evaluation period considered in this evaluation report extends from 2014 to 2022. The impact assessment 4 accompanying the Directive proposal served as the baseline for this evaluation.

The geographical scope of this study encompasses all 27 EU Member States (UK is not included). Additionally, responses to the questionnaire from national authorities in Iceland and Norway were collected and used for comparison alongside the EU Member States.

2.1. Description of the intervention and its objectives

In the 2010 Digital Agenda for Europe 5 , the European Commission recognised the potential of electronic invoicing (eInvoicing) as a key enabler for the digital economy and a means to promote the single market. In 2010, the EU's policy on eInvoicing was promoted with the Communication "Reaping the benefits of e-invoicing for Europe" 6 , advocating eInvoicing adoption and the development of a standard. However, two years after, the EU landscape of еInvoicing in public procurement had not significantly changed. Therefore, the Member States called for measures to promote еInvoicing in the European Council Conclusions of June 2012. In parallel, the European Parliament called for making еInvoicing compulsory in public procurement by 2016 in a resolution adopted in April 2012. This led to a proposal for a Directive, accompanied by an impact assessment that analysed the expected impacts of promoting eInvoicing adoption and interoperability in public procurement. In 2013, eInvoicing constituted 4-15% of all invoicing procedures in the EU public and private sector, with challenges hindering both Small and Medium Enterprises (SMEs) and large enterprises. At the time of the adoption of the Directive, the eInvoicing landscape in Europe was marked by diverse national formats, leading to non-interoperable systems. Several countries, including Denmark, Austria, and Italy, had mandated eInvoicing in public procurement. Other countries, such as Czechia, Finland, France, Germany, and Spain, were also taking steps towards broader use of eInvoicing in public procurement. However, EU Member States were adopting different national formats. This lack of a common standard created market barriers and complexity for firms conducting cross-border public procurement and led to a fragmented eInvoicing landscape in the EU 7 .

In regard to eInvoicing procedures in the private sector, Eurostat data from 2011 showed that only 8.2% of EU enterprises exchanged eInvoices. Legal and technical complexities of eInvoicing hindered its adoption, especially for SMEs, with approximately 40% of them not considering eInvoicing due to the multitude of standards. Large enterprises also faced challenges with unclear laws and regulations related to eInvoicing adoption.

Figure 1 eInvoicing problem tree

(Source: Impact assessment accompanying the proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement.)

In this context, the main objective of the EU intervention, as identified in the impact assessment accompanying the proposal for the Directive, was to enhance the functioning of the Internal Market by reducing market access barriers in cross-border public procurement caused by the lack of interoperability in eInvoicing technical requirements and standards. The preferred option chosen in the assessment was obligatory acceptance, consisting of proposing a European eInvoicing standard to the market and making it mandatory for all contracting authorities. While parties could still agree to exchange eInvoices in other standards, the common standard aimed to achieve eInvoicing interoperability and simplify cross-border business.

The Directive aimed not only to address eInvoicing challenges in cross-border public procurement - Business-to-government (B2G) - but also to facilitate Business-to-business (B2B) cross-border trade. Specific objectives included reducing complexity and enhancing legal certainty for economic operators by allowing them to use the European eInvoicing standard with several business partners, public and private, in their own Member State or in the other Member States. Additionally, lowering operating costs for economic operators, such as the cost of supporting multiple eInvoicing standards and systems, was an important goal. The Directive also sought to create conditions for the emergence of technical solutions (operational objective) to ensure cross-border interoperability, making communication between eInvoicing systems less resource-intensive for buyers and sellers.

In pursuit of the eInvoicing policy objectives, the European Commission introduced legislative actions, establishing a new legal framework for mandatory acceptance of eInvoices compliant with the new common European eInvoicing standard. The European Committee for Standardisation (CEN) was assigned the task of necessary standardisation work to implement the eInvoicing Directive. Non-legislative actions, such as financing projects to promote interoperable eInvoicing solutions in the EU (e-SENS) and supporting the development of end-to-end eProcurement, including eInvoicing through the Connecting Europe Facility (CEF), were also undertaken. Additionally, the European Commission continued to support the work of the European Multi-Stakeholder Forum on eInvoicing (EMSFEI). This European expert group gathered experts from each Member State government as well as market actors which contributed to the EU policy with key recommendations to the Commission.

Overall, the Directive's aims included facilitating the use of eInvoicing by economic operators supplying goods, works, and services to public administration, harmonising technical implementations based on the European eInvoicing standard, and simplifying business processes. It mandated all public administrations in Europe to receive and process electronic invoices (eInvoices) compliant with the EU eInvoicing standard when related to contracts governed by the EU Public Procurement Directives 8 . The primary expected impact of the Directive was improved interoperability, as eInvoices would have to be accepted by all public buyers. This, in turn, was foreseen to lead to an increased uptake of eInvoicing and lower costs and complexity of procedures 9 .

Figure 2 Intervention logic

2.2. Points of comparison

The impact assessment accompanying the proposal for the Directive described the expected impacts of the proposal's measures compared to the situation at the time. Therefore, the assessment of the Directive's actual impact must be based on the analysis of the compliance with the objectives and targets established by the Directive. The first point of comparison is the adoption of the Directive, which represents the key milestone for evaluating the evolution of eInvoicing in Member States and how the intervention has influenced it. The following key point of comparison is represented by the mandatory deadlines for the transposition of the Directive by central and sub-central contracting authorities and entities, 2019 and 2020, respectively. They are relevant because they serve to verify the timely transposition of the Directive in the Member States and to assess the impact on eInvoicing uptake and how it evolved in the years before the mandatory transposition (2019) and after the final optional deadline for sub-central authorities (2020).

Beyond the Directive, the EU eInvoicing policy included cooperation with Member States and market actors to foster eInvoicing within the EU. The Commission worked to implement its policy through legislative and non-legislative initiatives. The legislative actions considered are the establishment of the new legal framework, the transposition of the Directive in Member States, which was accompanied in certain cases by a complementary obligation for suppliers to issue B2G eInvoices in 17 Member States.

The non-legislative actions considered are Peppol, the e-Sens Project, the EU Digital Building Blocks, the Connecting Europe Facility (CEF) Programme (2014-2020), and the e-Procurement Ontology. While the scope of the evaluation concerns the implementation of the Directive, the non-legislative actions are described below as they had an important role in the evolution of EU policy for eInvoicing.

3.1.Legislative Actions

3.1.1. Establishment of the new legal framework

Directive 2014/55/EU 10  aimed to remove obstacles to cross-border trade caused by different national eInvoicing requirements and lack of interoperability. It applies to eInvoices issued for contracts under EU Public Procurement Directives (Directive 2009/81/EC, Directive 2014/23/EU, Directive 2014/24/EU, and Directive 2014/25/EU) and is part of 2014 Public procurement legislative package, pursuing the same objective: the modernisation of public procurement.

The Directive emphasises the importance of promoting interoperability. Interoperability, as defined by the European Interoperability Framework, consists of four layers: legal, organisational, semantic, and technical interoperability 11  (for details, see Figure 10 on page 36). The Directive covers two layers: the semantic (defining the content of the invoice) and syntax (specifying the format or language used) levels, which are part of the technical interoperability. To achieve this goal, as defined in Article 3 of the Directive, the European Commission was called to give a mandate for the development of a European standard for the semantic data model of eInvoices and the identification of syntaxes that comply with this standard. The responsibility for creating this European eInvoicing standard was entrusted to CEN, the European Committee for Standardisation.

The Directive, in its Article 7, required Member States to ensure that contracting authorities receive and process eInvoices compliant with the European eInvoicing standard and the list of syntaxes published in the Official Journal of the European Union (OJEU). Only machine-readable invoices that can be processed automatically are considered eInvoices. In Article 2, the Directive introduced the following definition of eInvoice: ‘an eInvoice is an invoice that has been issued, transmitted and received in a structured data format which allows for its automatic and electronic processing; electronic invoicing is the exchange of an eInvoice document between a supplier and a buyer’.

Central authorities had until April 2019 to comply with the obligation stemming from Article 7 of the Directive, and sub-central authorities had until April 2020, for the Member States that chose this option in their transposition law. Existing national standards could be used alongside the European standard in all Member States, but eInvoices should not be refused solely for non-compliance with other requirements. Member States were free to extend the scope of the mandate and require suppliers to send eInvoices to contracting authorities and contracting entities, and 17 of them chose to do so.

3.1.2. Transposition of the Directive in Member States

All Member States have transposed the Directive into national laws; 17 required the derogation for one year for sub-central contracting authorities, until April 2020.

The following table includes the reference to the national legislation in Member States that implemented Directive 2014/55/EU and whether they used the extra year until April 2020 as the optional extension for the implementation of the Directive by sub-central authorities and entities. As indicated in the table, 12 Member States were late in transposing and subsequently submitted non-transposition letters. However, in the meantime, all of them have completed the transposition process.

Table 2 National legislation implementing the Directive in Member States

(Source: EC eInvoicing Country Factsheets)

3.1.3. Mandate for suppliers to issue B2G eInvoices in 17 Member States

The Directive required contracting authorities and entities to be able to receive and process eInvoices compliant with the European eInvoicing standard.

The following figure shows the number of Member States that have introduced obligations for suppliers to send eInvoices to the public sector (Yes), the number of Member States that introduced partial obligations (Partially), and the number of Member States that have not introduced obligations to suppliers (No).

Figure 3 Member States that introduced obligations to suppliers for issuing B2G eInvoices.

(Source: Member State survey)

Of the 27 EU Member States:

·13 Member States mandated suppliers to issue eInvoices for B2G (Croatia, Denmark, Estonia, Finland, France, Italy, Lithuania, Luxembourg, Portugal, Romania, Slovenija, Spain, and Sweden).

·4 Member States have partial mandates on national suppliers to issue eInvoices for B2G (Austria, Belgium, Germany, The Netherlands). For example, in Austria, the mandate refers to suppliers at the central level (this means they can only send electronic invoices to the federal level), and the mandate does not cover the sub-central level.

·10 Member States have no mandates on national suppliers to issue eInvoices for B2G (Bulgaria, Cyprus, Czechia, Greece, Hungary, Ireland, Latvia, Malta, Poland, and Slovakia).

The following table shows the Member States that had already introduced the obligation to suppliers to issue eInvoices to the public sector from 2014 to 2018. Member States such as France gradually introduced the obligation to suppliers based on their size.

Table 3 Member States requiring suppliers to issue B2G eInvoices from 2014 to 2018

* Only suppliers to the Austrian federal government.

** The law of 2015 introduced mandatory eInvoicing, but not the European standard.

*** Only suppliers to the Dutch central government.

(Sources: Member State survey and EC eInvoicing Country Factsheet)

The following table shows Member States that had introduced the obligation to suppliers for B2G eInvoicing in 2019 and 2020 at the time of the transposition of the Directive.

Table 4 Member States requiring suppliers to issue B2G eInvoices in 2019 and 2020

* Only suppliers to the German Federal authorities.

(Sources: Member State survey and EC eInvoicing Country Factsheet)

The following table shows Member States that had introduced the obligation to suppliers for B2G eInvoicing from 2021.

Table 5 Member States requiring suppliers to issue B2G eInvoices from 2021

* Only suppliers of the regional government of Flanders and the regional government of Brussels.

(Sources: Member State survey and EC eInvoicing Country Factsheet)

10 EU Member States have not yet imposed obligations on suppliers to issue eInvoices for B2G, of which 6 Member States have plans to mandate national suppliers in the future to issue eInvoices for B2G (Bulgaria, Cyprus, Greece, Latvia, Poland, and Slovakia) and 4 Member States have no plans to mandate national suppliers to issue eInvoices for B2G (Czechia, Hungary, Ireland, and Malta).

3.1.4. Development of the European eInvoicing Standard

The CEN Technical Committee 434 12  (CEN/TC 434) is the working body in CEN, the European Standardisation Organisation, which is responsible for developing and maintaining the European eInvoicing standard. CEN is funded by the European Commission. The Table below presents the deliverables published by CEN Technical Committee 434 as part of the European eInvoicing standard (EN 16931).

Table 6 CEN Technical Committee 434 deliverables

In October 2017, the reference of EN 16931-1:2017 - Electronic invoicing — Part 1: Semantic data model of the core elements of an eInvoice and the list of syntaxes CEN/TS 16931-2:2017, Electronic invoicing — Part 2:2017 was published in the Official Journal of the European Union.

EN 16931-1 defines the information elements necessary for legal and fiscal compliance and enables cross-border, cross-sector, and domestic eInvoicing interoperability.

It supports various invoice-related functionalities, including issuance, validation, accounting, VAT reporting, payment, and auditing. The semantic model may be used by public and private sector organisations for public procurement invoicing (B2G eInvoicing). It may also be used for invoicing between private sector enterprises (B2B eInvoicing).

The European standard allows optional elements to be included in the core semantic model through Core Invoice Usage Specifications (CIUS), which provide detailed guidance and rules for specific trading situations. A Core Invoice Usage Specification (CIUS) is a specification that provides a seller with detailed guidance, explanations, and examples, as well as rules (business rules) related to the actual implementation and use of structured information elements present in the core invoice model in a specific trading situation 13 . According to the EN 16931, a compliant specification uses some features of the core invoice model, but all features used are in accordance with the rules of the core invoice model. Therefore, the CIUS is a compliant specification.

When additional information elements that are not part of the core invoice model are included in a technical specification for an eInvoice, this would become an extension. EU or Common Extensions could ensure harmonisation across multiple sectors, while Domain Extensions cater to specific industry sectors or supply chains. According to the EN 16931, a conformant instance or specification uses all features of the core invoice model in accordance with its rules and is extended with additional features. Therefore, an Extension is a conformant specification.

The difference between the core invoice data model and extensions are explained below:

·The Core Section contains the basic information elements (i.e. the core elements referred to in the Directive) required to exchange eInvoices between all types of trading entities (covering the basic needs of cross-border and cross-sector eInvoicing).

·The Sector extension contains those information elements that are only a concern of a specific industry sector, community, supply chain or buyers and sellers of a particular product type. Such information elements may be incorporated in an invoice as an ’Extension’ to the Core Section information elements.

·The Country extension contains information elements or further information about such information elements, which represent the specific requirements of a particular Member State.

The list of syntaxes that comply with the European eInvoicing standard are:

·UBL 2.1 invoice and credit note message as defined in ISO /IEC 19845:2015

·UN/CEFACT Cross Industry Invoice (CII) XML 16B

The CEN/TC 434 also provided a syntax binding for UN/EDIFACT INVOIC D16B 14 .

3.2. Non-Legislative Actions

3.2.1. Peppol

The EC-funded Peppol project 15 (2008-2012), developed before the publication of the Directive, played a strategic role in addressing interoperability challenges in the eProcurement domain (including eInvoicing, eOrdering, eCatalogues, etc.) in Europe and globally. The basis of the European eInvoicing Standard was developed during this project as technical specifications.

The Pan-European Public Procurement On-Line (Peppol) project was initiated to facilitate eProcurement across borders. Peppol provides a set of technical specifications that can be implemented in existing eProcurement solutions to make them interoperable. The sustainability of the Peppol project has been ensured by the OpenPeppol Association set up in 2012, which has seen a significant expansion of its community of members. In 2012, the Peppol specifications had been implemented in production by private and public entities, and real transactions had begun, demonstrating how differently eProcurement and eInvoicing systems could interoperate across borders by using common standards, definitions and rules for transmission of eProcurement messages, such as eInvoices, eOrders, eCatalogues, to name a few, under an agreed governance and legal framework.

Since then, public and private entities in Europe have used Peppol as a solution to comply with the technical requirements of the Directive. Moreover, countries outside of Europe have recognised the value of Peppol in addressing common issues in terms of format fragmentation and the lack of interoperability between separate systems. The Peppol Interoperability Framework, with its legal agreements, policies, technical specifications, and governance model, has been recognised as a global reference point for the exchange of electronic business documents (such as eInvoices, eOrders, eDespatch advice, etc.). Its use is also expanding in specific industries, such as logistics.

In the EU, 23 Member States have implemented Peppol to ensure interoperability of eInvoicing across borders (see section 4 below for more information).

3.2.2. The e-SENS project

The European Commission funded the e-SENS project from 2013 to 2017 to develop interoperable eInvoicing solutions across the EU. It involved over 100 public and private actors from 22 countries and aimed to consolidate the work of previous projects like Peppol 16 , providing generic IT solutions for cross-border communication.

The e-SENS project focused on supporting the standardisation of public procurement processes and eInvoicing 17 . It successfully tested the sending and processing of eInvoices between suppliers and contracting authorities in different Member States, reducing administrative burdens, and improving efficiency in business processes.

e-SENS offered a common standard-based eDelivery technical solution for cross-border eInvoicing, enabling seamless and secure document transfer between contractors in post-award procurement. Austria, Norway, Greece, and Slovenia launched online eInvoicing services based on e-SENS 18 .

3.2.3. The Connecting Europe Facility (CEF) Programme (2014-2020)

CEF was an EU funding programme to support the development of high-performing, sustainable and efficiently interconnected trans-European networks in the fields of transport, energy, and digital services.

From 2015-2022, the CEF Telecom eInvoicing project 19 funded and supported the uptake of the eInvoicing and the implementation of the EN 16931, by supporting the deployment of eInvoicing solutions for B2G purposes. In total, 49 projects in 27 countries (24 Member States, Norway, Iceland, and the United Kingdom) were implemented under the CEF Telecom eInvoicing calls.

3.2.4. The EU Digital Building Blocks

CEF Telecom Programme supported the implementation of EU Digital Building Blocks, including eInvoicing, eDelivery, eSignature, and eID, providing open and reusable digital solutions for cross-border digital public services 20 . Currently, the Building Blocks continue to be supported under the Digital Europe Programme (DIGITAL) (2021-2027) to accelerate the digital transformation of public administrations and promote interoperability across Europe.

eInvoicing Building Block

The eInvoicing Building Block plays a crucial role in supporting public administrations to comply with the Directive and promote the adoption of eInvoicing solutions. The Building Block offers a set of tools of different kinds to ease the work of its stakeholders:

·The validation artefacts and a conformance tool are tools, to facilitate and test the implementation of the European eInvoicing standard in IT systems and services.

·The European Commission maintains two essential code lists related to the standard, the Electronic Address Scheme code list and the VAT Exemption Reasons code list.

·The eInvoicing DIGITAL website is available as a place to compile all relevant information, and a user community is available to serve as a hub for stakeholders to be engaged.

eDelivery Building Block

The eDelivery Building Block facilitates secure and reliable exchange of electronic data and documents among users. Its four corner model employs Access Points to ensure interoperability between diverse IT systems, allowing seamless communication. These Access Points, managed by public or private entities in Member States, enable safe data exchange even among independently developed systems.

Figure 4 The four corner model

eDelivery's domain-neutral use cases and technical specifications empower organisations to create a unified network for secure digital data exchange. This fosters collaboration and efficiency in document transfer across different sectors. The standard transmission protocol, eDelivery AS4, ensures secure and payload-agnostic data exchange, supporting a variety of document types and network topologies.

By widely adopting eDelivery for transmitting electronic documents, including eInvoices, efficiency is maximised, and cross-border data exchange becomes smoother. The reusability and seamless integration of eDelivery make it a powerful tool for streamlining data exchange processes across Europe.

3.2.5. The eProcurement Ontology

The eProcurement Ontology enables the creation and dissemination of linked open data in the public procurement data space. Covering all phases of public procurement procedures, it permits not only the publication of public procurement data but most importantly the consumption and interpretation of this data to derive reports, analyses, and insights for decision-making.

The ultimate objective of the eProcurement Ontology is to conceptualise and formally encode eProcurement data and make it available in an open, structured, and machine-readable format. This data would cover the process from end-to-end, i.e., from notification, through tendering, awarding, ordering, invoicing, and finally to payment.

3.3. Current State of Play

The European Commission has placed significant emphasis on promoting an open and seamless exchange of eInvoices based on a common European standard to support the Internal Market and strengthen European leadership in standardisation worldwide. In line with this vision and the Directive’s requirement that the European standard for eInvoicing has to be kept up to date, the CEN was given a mandate in 2022 via a Grant Agreement to ensure that the 2017 European eInvoicing standard's evolution aligns with the EU's new policy priorities.

To enhance cross-border interoperability and cooperation among EU Member States, the European Commission adopted the Interoperable Europe Act proposal 21 in November 2022. This proposal imposes obligations on Member States to share their interoperability solutions for digital services with public sector bodies in other Member States, aiming to streamline processes and promote efficiency. Therefore, the proposal for the Interoperable Europe Act establishes the broader EU framework to which the Directive shall align. On 8 December 2022, in the framework of its Action Plan for fair and simple taxation, the Commission unveiled the legislative proposals on VAT in the Digital Age 22 (ViDA). These proposals seek to modernise the EU VAT system and address VAT fraud issues that have resulted in substantial revenue losses. The ViDA package's key objectives include modernising VAT reporting obligations, addressing challenges posed by the platform economy, and introducing a single VAT registration to eliminate the need for multiple registrations within the EU.

As part of the plan, starting from January 2028, eInvoicing would become the default method for issuing invoices, and its definition would be aligned with Directive 2014/55/EU (this means eInvoices must be issued, transmitted, and received in a structured electronic format, enabling automatic and electronic processing). ViDA extends and promotes the European eInvoicing standard by imposing its use for VAT reporting of intra-community transactions at a minimum. It will stimulate the adoption of eInvoicing in general. Member States would have the option to mandate eInvoicing without requesting derogations. Furthermore, the European eInvoicing standard would be widely accepted across all Member States, enabling seamless transmission of eInvoices for Business-to-business transactions (B2B).

The European Commission has also been actively engaged in various international initiatives, such as free trade agreements (FTAs) and Digital Partnerships, to expand digital trade opportunities and promote eInvoicing globally. Notably, FTAs have been concluded with New Zealand, and there are ongoing negotiations with Australia and India. Digital Partnerships have been established with South Korea, Singapore, and Japan to foster collaboration on digital issues, including eInvoicing and digital payments. Complementing these efforts, regulatory dialogues have proven instrumental in addressing digital trade challenges. The EU's intensified cooperation with the U.S., through the Trade and Technology Council Working Group 10 on Global Trade Challenges, which facilitates discussions on interoperable eInvoicing. The eInvoicing exchange frameworks in the EU and the U.S. have a considerable degree of compatibility. The U.S. profiles of the eInvoice were modelled after the European standard purposefully to ensure a high degree of alignment to support interoperability while meeting U.S. business market requirements. Similarly, Taiwan and the EU started a regulatory dialogue on eInvoicing in July 2023. 

In conclusion, the European Commission's efforts to promote eInvoicing and digitalisation are aimed at simplifying processes, enhancing cross-border cooperation, reducing administrative burdens, and fostering economic growth within the EU and on the international stage. These initiatives hold the promise of facilitating smoother and more efficient transactions for businesses and individuals alike.

4.1. To what extent was the intervention successful and why? 

The success of the intervention has been assessed by evaluating its effectiveness, its efficiency, and its coherence.

4.1.1.Effectiveness

Directive 2014/55/EU has set up a series of objectives, both direct objectives, which translated in the provisions of the Directive, and underlying objectives, which are listed in its recitals and in the Impact Assessment that accompanied the creation of the Directive.

The Directive and the introduction of the European eInvoicing standard fostered the Internal Market for electronic invoicing in Europe by fulfilling its direct objectives:

·By setting up a standard: the Directive created a common European instrument to be used both in B2B and B2G, both in the EU and beyond EU borders, by our international partners. Beyond B2G, the European eInvoicing standard has been implemented and used in the market as the common European reference standard for eInvoicing.

·By driving the implementation of the pan-European eInvoicing capability, the public sector in the EU was required to create IT systems able to receive and process eInvoices compliant with the European eInvoicing standard (or update their existing system). To support in practice the EU eInvoicing uptake and the implementation of the Directive, in the framework of the Digital Infrastructures policies financed by the Commission, CEF Telecom eInvoicing calls funded the implementation of eInvoicing solutions compliant with the European standard in 24 Member States on projects deployed between 2015 to 2022.

The underlying objectives are the following:

A general objective: to improve the functioning of the Internal Market by introducing mechanisms that would diminish market access barriers in cross-border public procurement generated by insufficient interoperability of eInvoicing technical requirements and standards.

Specific objectives:

·Reduce technical complexity and improve legal clarity for economic operators.

·Lowering operating costs for economic operators.

Operational objective:

·Creating the conditions for the emergence of technical solutions for eInvoicing in public procurement, which would ensure cross-border interoperability.

To assess the effectiveness of the Directive, the analysis looked into how successful the EU intervention has been in achieving the above-mentioned objectives, encompassed in the intervention logic.

4.1.1.1. General Objective

The main objective of the EU intervention identified in the impact assessment was to improve the functioning of the Internal Market by addressing the issue of insufficient interoperability of eInvoicing technical requirements and standards. To do so, the Directive addressed interoperability at the semantic and syntax levels. At the semantic level, it established a European standard, which is a core semantic data model. At the syntax level, it led to the identification of two syntaxes and required EU public authorities to accept any eInvoice sent to them in the European Standard and one of the two selected syntaxes. Furthermore, in order to help interoperability in the implementation, the European eInvoicing standard is also accompanied by supporting technical specifications and reports published by CEN at the same time as the standard, as foreseen by the Directive.

For the transmission level, for example, which was a challenge already identified at the time of the adoption of the Directive and mentioned in its recital 27, but not as a main challenge, only guidelines 23 have been issued by CEN together with the European eInvoicing Standard: “Part 4: Guidelines on interoperability of electronic invoices at the transmission level”. These guidelines are not mandatory.

Fostering an Internal Market for eInvoicing

While the Directive, in what was considered a minimal approach, required contracting authorities and entities to be able to receive and process eInvoices compliant with EN 16931, it did not impose an obligation on suppliers to send eInvoices to the public sector.

In addition, the Directive and its provisions, as per their scope, only apply to public procurement contracts above the EU thresholds 24 , leaving the freedom to Member States to require it also for contracts below the EU thresholds.

As regards the objective of fostering an Internal Market for eInvoicing, this can be assessed either based on the subjective evaluation by the Member States surveyed, as described below, and also on the following elements:

·Analysing the developments in terms of interoperability in the EU.

·Measuring the uptake of eInvoicing in general.

·Measuring the uptake of eInvoicing in B2G.

·Measuring the uptake of the European Standard for eInvoicing.

As regards the subjective evaluation by the Member States, when Member States replied to the question “To what extent has the Directive and the introduction of the EN 16931 contributed to foster the functioning of the Internal Market”, 15 out of 23 surveyed assessed the impact as positive, from medium to very high. The seven Member States that have said the impact was low or very low are either Member States with a low eInvoicing uptake or Member States which made eInvoicing mandatory before the European eInvoicing standard was introduced, as explained below:

·No or very low eInvoicing uptake and no supplier mandates, as Romania, Cyprus, Czechia, and Greece.

·High eInvoicing uptake and supplier mandates to issue B2G eInvoices and use of a mandatory national standard, as in Estonia and Italy. As the uptake was high before the Directive, these Member States did not experience a significant impact of it. The mandatory use of the respective national eInvoicing standard was introduced before EN 16931 became available. In Estonia, however, the strategy for the future is to replace the national standard with European eInvoicing standard and use Peppol for cross-border trade.

There were two indirect major developments in the Member States which were triggered either by the existence of the Directive itself, before even the transposition into the national law or by the transposition process:

·First, making eInvoicing mandatory for suppliers in B2G. This happened in 17 Member States either with a full mandate in 13 Member States or a partial mandate in four Member States.

·Second, extending the obligation for contracting authorities even below the EU thresholds. It should be noted that nine Member States have done it.

Interoperability

Achieving interoperability at the semantic and syntax level was a key objective of the Directive, through the adoption of the European eInvoicing standard. Moreover, improved interoperability was considered as the primary expected impact of the EU intervention in the Impact Assessment accompanying the proposal for the Directive (see Section 2).

The Directive positively addressed interoperability challenges by tackling the semantic and syntax levels with the development of the EU eInvoicing standard (EN 16931). However, in order to achieve full interoperability as defined in the European Framework for Interoperability, other levels should have been addressed, such as the transmission level and the governance level, which were not identified as big challenges at the time of the adoption of the Directive and, therefore, not covered by the EU initiative. Ultimately, the Directive improved interoperability but not to the extent predicted due to the emergence of transmission as a main challenge.

While the Directive only mandates interoperability at the semantic and syntax level, in practice, the market has seen the emergence of the Peppol network for exchange of electronic invoices, which has achieved interoperability in all the layers that are part of the European Interoperability Framework, including the legal, organisational, governance, and technical (format of business documents and secure transmission using eDelivery). Peppol has implemented the European standard in its technical specifications for electronic invoicing (Peppol BIS Billing 3.0). This means that, if the Peppol specifications are implemented, compliance with the European standard is ensured by default. In addition, as Peppol also mandates the use of a common exchange method across the network, interoperability at the transmission level is also ensured.

The European Commission continued to support the development of Peppol through the maintenance of the Service Metadata Locator (SML) 25 , which is the only centralised component of the Peppol Network. Public entities in Europe have used Peppol 26 as a solution to comply with the technical requirements of the Directive. The Peppol Interoperability Framework, with its legal agreements, policies, technical specifications, and governance model, has been recognised as a global reference point for the exchange of electronic business documents (such as eInvoices, eOrders, eDespatch advice, etc.). Its use is also expanding in specific industries, such as logistics.

The following 12 Member States have established a Peppol Authority within the national government: Belgium (BOSA), Denmark (ERST), Finland (VK), Germany (KoSIT), Greece (GSIS), Ireland (OGP), Italy (AGID), Luxembourg (Ministry of Digitalisation), Poland (MriT), Portugal (eSPap), Sweden (Digg), The Netherlands (NPA). There are Peppol Authorities in Norway and Iceland (EEA), the UK (England NHS), Singapore, Australia, Malaysia, New Zealand and Japan.

OpenPeppol developed a specification (Peppol BIS Billing 3.0) to provide Peppol participants (buyers and sellers) with a common and documented approach to becoming compliant with the European standard. This specification is a Core Invoice Usage Specification (CIUS) of EN 16931 and is supported by several Member States in their national central eInvoicing infrastructure. Any eInvoice compliant with this specification is compliant with the European Standard (EN 16931). The purpose of the CIUS is to clarify aspects that are undefined in the standard and to give usage guidance to business partners in order to begin exchanging eInvoices without prior bilateral agreements on how to use the standard. Currently, all Peppol members, as soon as they become part of the network, need to support the Peppol CIUS for all transactions in the Peppol Network.

Another parallel development in interoperability is the Global Interoperability Framework (GIF) - a set of recommended practices, policies, and standards to be used by any interoperability network, under a collaborative environment 27 . The GIF’s approach is based on the European standard (four corner model of exchanging eInvoices) and builds upon an eDelivery network 28 . GIF was an initiative of four main stakeholders: GENA (the European Association of eInvoicing Service Providers), BCP (The Business Payments Coalition), Connect ONCE and OpenPeppol.

Since its formation, GENA established the Interoperability Working Group, where volunteer member representatives of the community actively participate. The working group advises and guides GENA Members on the adoption and implementation of the Multilateral Interoperability Agreement (MIFA) and the bilateral Model Interoperability Agreement (MIA), as well as addressing specific technical, compliance, and operational issues.

On 2 February 2022, OpenPeppol and GENA announced the move to a common interoperability framework, as both organisations support the European standard on electronic invoicing and eDelivery. An incubation project was approved by both Associations in May 2023 and is currently running, with the objective of GENA bringing its interoperability activities onto the Peppol Network. In parallel, the two Associations have been running since September 2022 a proof-of-concept project to support the eInvoicing mandate in France.

eInvoicing adoption in general

The increase in eInvoicing uptake in Europe was the expected secondary impact of the Directive. The availability of a European standard and obligation to accept compliant eInvoices was expected to significantly increase the uptake of eInvoicing, depending on business decisions. A “boule de neige” effect was expected to happen by inducing the EU suppliers in public procurement adopt the harmonised eInvoicing based on the European eInvoicing standard, even in the absence of an obligation, and, for them in turn, to induce their own suppliers to adopt the same standard. However, the findings from the evaluation showed that, even in B2G, 100% eInvoicing adoption is (or is to be) achieved only in the Member States that mandated B2G eInvoicing to their suppliers.

The first graph below illustrates the overall adoption trends of eInvoicing at the EU level. National trends are then compared, based on the entry into force of an obligation for suppliers to issue B2G eInvoices, and a correlation is determined between the mandates and the adoption patterns.

Eurostat gathers data from Member States on the percentage of enterprises (with more than 10 employees) that send eInvoices, suitable for automated processing. The data does not distinguish between B2G, B2B, nor B2C transactions.

Figure 5 Percentage of EU enterprises sending eInvoices (2011-2020)

(Source: Eurostat)

The above figure shows that the percentage of EU enterprises that were sending eInvoices suitable for automated processing from 2011 to 2020 has increased considerably, moving from 8.2% in 2011 to 10.3% in 2013 (prior to the publication of the Directive), and 32.2% in 2020, a fourfold increase. In 2015, B2G eInvoicing was mandated in certain countries and B2B eInvoicing was mandated in Italy. In 2016, the effect of the obligations showed up in the general uptake of eInvoicing.

This figure includes XML-based formats such as UBL, UN/CEFACT, also national formats and non-XML formats such as UN/EDIFACT-based eInvoices. It does not include PDFs as the Eurostat query was for eInvoices that could be processed automatically.

The following figure shows the use of eInvoicing among EU enterprises in Member States that introduced an obligation to suppliers to send eInvoices to the public sector before the mandatory deadline for the transposition of the Directive in April 2019.

Figure 6 Percentage of enterprises sending eInvoices, in a standard structure suitable for automatic processing in Member States that mandated eInvoicing before April 2019

(Source: Eurostat)

In the above figure, the number of enterprises in Italy, Slovenia, and Spain using eInvoicing significantly increased after a short period from the time the national obligations to send only eInvoices to the public sector entered into force.

Beyond its immediate impact within the public procurement sphere, the Directive has played a role in promoting further harmonisation in the B2B context. By establishing a common foundation for eInvoicing practices within the EU and introducing a European standard, the Directive has encouraged developments in B2B, where the EU standard is already used and its usage will be further extended by the ViDA legislation.

Adoption of eInvoicing in B2G

The annual invoice volume was estimated to reach 36 billion invoices in 2016; 50% of the total volume were B2G and B2B invoices (the other 50% relates to Business-to-Consumer). Each year, 18 billion B2B and B2G invoices were sent within the EU 29 . The public sector is responsible for 14% of the GDP in all purchases in the EU 30 . Therefore, B2G volumes are estimated between 3.24 – 5.4 billion in Europe.It represents typically 9-15% of a country’s inbound and outbound invoices. 

The following table represents the total number of B2G eInvoices received by central and sub-central contracting authorities, from national and foreign suppliers, in Member States. The percentage in parenthesis, in certain cases, shows the percentage of B2G eInvoices over the total number of B2G invoices (not electronic), if available. The adoption percentage is high in Member States that have mandated suppliers to send B2G eInvoices. Conversely, it is typically lower in countries where suppliers are not mandated to send B2G eInvoices.

Table 7 B2G eInvoicing uptake in Member States

Uptake of the European eInvoicing Standard

Since the publication of EN 16931 in October 2017, new national standards have not been imposed for eInvoicing in the B2G context. This represents an important achievement of the intervention as it has prevented the proliferation of national standards for B2G eInvoicing reducing technical complexity by establishing the use of a common semantic data model and only two syntaxes. This is also fully in line with the rules of the EU standardisation system according to which there cannot be competing national standards when a harmonised European standard is adopted. Nevertheless, there is a risk of potential fragmentation in B2B eInvoicing if Member States mandate national technical specifications in this context.

Member States that had already introduced national standards prior to the publication of the European eInvoicing standard have continued using them, as it emerges from the eInvoicing Country Factsheets. However, Estonia, Finland and Sweden have been gradually replacing their national standard with the European one.

Finland, in particular, recognised the benefit of using the European eInvoicing Standard (EN), its structured data and code lists as the key factor for higher data accuracy in public procurement. Previously, that was done through RPA (Robotic Process Automation), which proved to be unnecessary with the advent of EN compliant eInvoicing (see corresponding Case Study in Annex VI).

The following table indicates the percentage of B2G eInvoices received by contracting authorities that are compliant with the EN 16931, based on the information received from the Member States that responded to the survey comducted for the evaluation. Therefore, not all Member States are included in the analysis. The use of Peppol is a general indicator of compliance with the European eInvoicing standard.

Table 8 Percentage of B2G eInvoices compliant with EN 16931

*Belgium reported 1 420 000 eInvoices compliant with the European eInvoicing standard in 2022.

According to the EC eInvoicing country factsheets 31 , all Member States declare to support the use of the European standard at the national level for B2G eInvoicing. Some Member States developed a national CIUS to ensure compliance with EN 16931. Others developed extensions, i.e. technical specifications that include information that is not part of the European standard. For instance, the Netherlands developed three extensions to EN 16931.

23 Member States have implemented the Peppol BIS Billing 3.0 to ensure compliance with the European standard, making it, by default, the most common specification used in the European Union for ensuring cross-border interoperability (at the semantic and syntax level).

4.1.1.2. Specific objectives

Reduce technical complexity and improve legal clarity for economic operators

The Directive and the introduction of the European standard aimed at reducing the proliferation of national formats for B2G eInvoicing (see General Objective: Uptake of the European Standard for eInvoicing section) that was creating cross-border market barriers, unnecessary complexity and costs. At the same time, it provided a coherent legal framework to foster interoperability at the technical level, which signalled a clear policy direction towards the need of harmonising legal and technical frameworks.

Article 2 of the Directive established the definition of an electronic invoice which ensured legal clarity: “electronic invoice means an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing”. Only structured invoices fit for automation are covered. The Directive also sets the requirements for the European eInvoicing standard, including technological neutrality, compatibility with international standards, suitability for commercial transactions between enterprises and support for the needs of SMEs, and consistency with the relevant provisions of Directive 2006/112/EC 32 .

The Directive increased legal certainty and reduced technical complexity for eInvoicing by establishing a clear legal basis and setting the European eInvoicing standard as the common standard to be supported by the EU public sector. Evidence of this is that 14 out of the 23 Member States surveyed, reported that the intervention had a positive impact on increasing legal certainty and reducing technical complexity. In Finland, technical complexity is offset by improved automation and higher data quality provided by the use of the European eInvoicing standard, which replaced the national eInvoicing format.

Two-thirds of the private sector, particularly SMEs, view the European eInvoicing standard as a means of significantly simplifying intra-EU trade. This has been reported by 66% of surveyed SMEs and by all large enterprises surveyed (7 out of 7).

However, 41% of surveyed SMEs still experience technical challenges when using eInvoicing, including support for multiple eInvoicing formats, archiving for audit purposes, integration with service providers, data security and privacy concerns, interoperability with trading partners, infrastructure, and connectivity. The Directive focused on addressing interoperability issues and providing the conditions for widespread use of eInvoicing compliant with the European eInvoicing standard but did not mandate its use by suppliers. As a result, enterprises must support multiple eInvoicing formats in Member States where a national standard is mandated for B2G transactions while using other formats for B2B transactions. The public sector essentially acts as a large buyer imposing also its requirements on suppliers.

European bussinesses, especially large enterprises implement legal requirements regarding eInvoicing in several countries. The clarity of these requirements, as well as consideration of practical issues, differed strongly between the countries based on the findings of the survey targeting national authorities. Because of national and individual requirements regarding eInvoicing in the different EU Member States, it is necessary to have local specialists and service providers. This is costly compared to the implementation of an EU common standard.

The seven large enterprises surveyed also believe that a common EU standard used for B2G and B2B transactions would be beneficial only if every Member State uses the same standard without exceptions. For cross-border B2B eInvoicing, the same data set must be defined without exceptions.

According to the Global Exchange Network Association (GENA), the Directive is the first important step towards eInvoicing standardisation. The minimal standard approach enables Member States to continue accepting other formats while setting a baseline that removes the costs for suppliers that wish to adopt a single standard. According to GENA, notwithstanding the value of a minimum standard that the suppliers can adopt across Member States for B2G eInvoicing, the Directive could not lead to a significant increase of eInvoicing volumes, in either of the European eInvoicing standard syntaxes, in practice due to the lack of mandate. This result is also related to the lack of adoption of incentives for suppliers where a B2G eInvoicing method was implemented prior to the availability of the European eInvoicing standard in October 2017.

Lower operating costs for economic operators

For the specific objective of lowering operating costs for economic operators, the EU intervention has not been particularly successful. Operating costs are closely dependent on the number of eInvoices exchanged by businesses and the availability of cost-effective solutions and services. The lack of data does not allow to estimate whether operating costs have increased or decreased after the Directive’s implementation.

Operating costs for economic operators are influenced by the number of eInvoicing transactions, formats supported, transmission protocols, and number of countries in which the businesses operate as specialised support is required in each Member State that has mandated specific formats and requirements. This will be further detailed with quantitative elements in the Efficiency section below.

For SMEs, the availability of eInvoicing functionalities within ERP systems and accounting software is considered the most crucial factor in facilitating adoption. It would result in a new capability of IT systems that they already use, thus significantly lowering costs, as mapping and other integration costs will be eliminated. However, ERP vendors would support a standard only when there is sufficient demand for it and when mandated by the government.

The business case for eInvoicing is closely dependent on the number of eInvoices exchanged by businesses. According to the Swedish Companies Registration Office 33 , a minimum number of five eInvoices per month makes eInvoicing financially viable.

4.1.1.3. Operational Objective

Create the conditions for the emergence of technical solutions ensuring cross-border interoperability for eInvoicing in public procurement

Following the Directive, this objective was achieved to a significant extent in two manners. First of all, the Directive created the conditions directly by imposing an obligation on public authorities who either created systems or adapted their systems in order to be able to accept the European standard, therefore, equipping themselves with the capabilities for interoperability.

Despite the positive impact, challenges remain. The different implementation of the European standard in national eInvoicing platforms has led to compatibility issues, which are exacerbated by a lack of interoperability at the transmission level. An important challenge related to having more than one national eInvoicing platform mandated by the government (a platform for B2G and another one for B2B) has to be considered. This is the case in Spain and Poland (although, according to current information, Poland will gradually phase out the B2G platform that is ensuring compliance with the European standard). Monitoring technical developments and adoption at the EU level also poses challenges due to varying common procedures and requirements and the absence of an obligation on Member States to monitor and report.

Secondly, with the creation of the European eInvoicing standard, the conditions for the emergence of technical solutions have been created as the Directive facilitated the expansion of the Peppol network as a solution for ensuring compliance with EN 16931 through the use of common specifications, a common transmission method, legal agreements, and a governance model. From the result of the Member States survey, it emerged that the number of Peppol-based eInvoices is increasing in Belgium, Finland, France, the Netherlands, Slovenia, and Sweden. This result was achieved through several contributing factors, including the original EU funding for the Peppol large-scale pilot project. The willingness of governments to sustain its results since 2012 and implement its interoperability framework at the national level also played a role, as it emerged from consultations with OpenPeppol. Service providers have developed access points for the public sector and private companies.

The Peppol Interoperability Framework has been adopted in several countries outside of the EU, including Australia, Japan, Malaysia, New Zealand, and Singapore. In the U.S., the reuse of Peppol with minor variants has been successfully piloted in the private sector.

Some Member States have imposed the use of eSignatures to guarantee the authenticity and integrity of eInvoices, and this constitutes a barrier to cross-border eInvoicing. As proven by systems that do not use this method of authentication, in practice this is not at all necessary.

4.1.2.Efficiency

This section analyses the costs and benefits for public authorities and the different identified categories of economic operators. There are important variations of costs and benefits among stakeholders.

4.1.2.1. Costs and benefits for public authorities            

This section discusses the costs and benefits borne by public authorities to implement the national mandate to receive and process eInvoices compliant with the European eInvoicing standard.

For public authorities, the costs of implementing eInvoicing are largely dependent on the level of IT maturity of the public sector. The following categories of transposition costs were identified:

·one-off investment costs to set up or update a central platform for B2G;

·implementation costs related to the standard (included in Table 9 below);

·adaptation cost of the existing national B2G eInvoicing format.

The implementation of eInvoicing for the Member States that decided to use a central platform for B2G, implied an initial investment cost for either setting up a new platform or updating an existing one. This is confirmed by the results of the survey targetting Member States.

The costs specifically linked to the implementation of the European eInvoicing standard vary depending on the existence of a national standard and the requirement to ensure interoperability with the European eInvoicing standard. However, the highest costs are related to the establishment and maintenance of the national eInvoicing infrastructure, as explained below and detailed in Table 9.

National authorities in 15 out of the 23 surveyed Member States incurred costs related to the transposition of the Directive. These costs include the expenses due to the compliance with the European eInvoicing standard. Seven Member States declared they did not incur costs (Cyprus, Check Republic, Denmark, France, Finland, Greece and Romania).

The following Member States provided estimates of direct compliance costs:

·Poland is the Member State that incurred the highest costs, with a total of EUR 6.1 million, of which EUR 5 million have been funded through the Operational Program Digital Poland that was used for the establishment of the national B2G eInvoicing platform.

·Ireland has incurred total costs of EUR 1 144 863.

·Lithuania has incurred total costs of EUR 260 520.

·Luxembourg has incurred total costs of EUR 145 000.

·Malta has incurred costs of EUR 34 750.

Table 9 provides detailed information on the compliance and implementation costs borne by national authorities, which answered the Member States survey.

Compliance costs include the costs Member States incurred for the transposition of the Directive and the implementation of the European standard in national eInvoicing systems, which can be one-off costs, as for the setting up of the platform or its initial adaption, or maintenance costs to ensure it remains functional, efficient, and safe.

The costs of implementation for the public authorities are of different nature and consist of:

·Adjustment costs, which include the following: software, hardware, training, change management, test environment, and service providers’ fees.

·Administrative costs, which include legal and solution analysis, publicity, user guides, support, security audit, and Peppol membership fee.

* Change management costs due to the usage/implementation of new methods or processes with software/hardware

Table 9 Costs incurred for the transposition of the Directive and the implementation of the EN 16931

(Source: Member State survey)

Was there a cost associated with ensuring the national format complied with EN 16931?

Member States with an existing national B2G eInvoicing format had to adapt it or replace it with the EN 16931. The following figure shows which Member States experienced the related adjustment costs (Yes) and those who did not (No).

Figure 7 Cost burden to ensure compliance with EN 16931 in Member States

(Source: Member State survey)

Out of 16 Member States that provided an answer to the survey, nine Member States reported that they experience a cost burden related to ensuring their national format was European eInvoicing standard compliant; and seven Member States answered that they did not experience a cost burden.

The following nine Member States sustained costs for ensuring alignment with the EN 16931, as detailed below:

·In Finland, the conversion of the national eInvoicing standard costed EUR 250 000 to the national authorities. They consider that the benefits outweigh the costs.

·In Italy, two CEF eInvoicing funded projects were implemented for the alignment of the national standard to the EN 16931: eIGOR with funding of EUR 1 152 500 and EeISI with funding of EUR 1 136 942.

·In Poland, approximately EUR 1.5 million were spent to ensure that the national format was compliant with the EN 16931. It was necessary to implement an extension to the EU norm, which enabled the inclusion of representatives of specific sectors of mass services (such as energy or gas) in the eInvoicing process. Benefits are expected to be achieved in the coming years, as the extension was implemented in mid-2022 (see Country Profiles in Annex for more information).

·Slovenia incurred costs that were funded via the EU projects ROSE and ROSE 2 (see Country Profile for more information), for a total of EUR 88 407 for the Public Payment Administration (PPA).

·In Sweden, the upgrade of the national format to the EN 16931 resulted in conversion costs, but the Swedish authorities perceive that the benefits still outweigh the costs. There have been conversion costs for parties unable to handle the EN16931 from the start, but these costs are expected to vanish over time, and the benefits still outweigh the costs (see Country Profiles).

For the seven Member States, which declared that they bore no costs for the alignment to the European eInvoicing standard, the two following cases are relevant because they represent two typical scenarios:

·France, which went beyond the minimal obligation of the Directive relying on public authorities (in their national eInvoicing policy) and mandated eInvoicing for all suppliers in public procurement, declared it incurred no cost to ensure that the national format complied with the EN. Similarly, it did not incur costs for the transposition of the Directive. Indeed, France did not seek funds to ensure compliance. France stated that, as a measure to increase the efficiency of the initiative, the EN 16931 should be updated to consider some data required in B2B transactions or by the tax authorities.

·Greece declared they did not incur costs related to ensuring compliance with the EN 16931 (neither related to the transposition of the Directive), because the main costs are related to the establishment of the national eInvoicing infrastructure.

Overall, according to the findings of the consultation activities, the benefits outweighed the costs for public authorities. Five Member States provided estimates of the costs to ensure compliance of the national formats to the EN. With the exception of Poland, where the eInvoicing uptake is still very low, the benefits outweighed the costs. The benefits include operational efficiencies, improved transparency, and environmental benefits. Process automation is perceived as the main driver, followed by the use of a common standard, faster processing, and less complexity.

A high level of legal certainty was introduced by the Directive and significant technical simplification was provided through the use of a common European eInvoicing standard, leading to a considerable cost reduction.

CEF funding

The Connecting Europe Facility (CEF) Telecom eInvoicing calls, between 2015-2019, funded and supported the uptake of eInvoicing and the implementation of EN 16931. CEF Telecom eInvoicing funding supported consortia of private and public stakeholders to implement the final version of the EU eInvoicing standard, or to update existing solutions.

Most of the EU Member States received funding under the CEF eInvoicing calls from 2015 to 2019, which greatly facilitated and enabled the implementation of the EN 16931. In total, 24 Member States received EU funds under the CEF Telecom programme to develop eInvoicing solutions.

49 projects in 27 countries (24 Member States, Norway, Iceland, and the United Kingdom) were implemented under the CEF Telecom eInvoicing calls. A total of approximately EUR 28.6 million of CEF Telecom funding was allocated.

The following table shows the CEF funding received by Member States. Spain, Italy, and Ireland received the highest amounts of funding, while Bulgaria, Czechia, and Luxembourg did not receive any.

Figure 8 CEF Telecom eInvoicing funds received in Member States

(Source: European Commission, INEA)

The CEF eInvoicing Building Block includes services such as conformance testing for implementers to ensure the correct implementation of syntaxes, maintenance of code lists, interaction with the stakeholder community, as well as onsite and online training courses to build the capacity of public administrations in adopting the European eInvoicing standard and facilitate interoperability among contracting parties in Europe.

4.1.2.2. Costs and benefits for economic operators

The EU intervention has not been particularly successful in lowering operating costs for economic operators. However, market dynamics depend on different factors, such as the cost of labour per hour, the IT maturity of the society and the level of eInvoicing adoption. In addition, pricing models vary significantly depending on specific eInvoicing features and are not always transparent, creating confusion for businesses, in particular SMEs, when selecting eInvoicing services and solutions (see Annex IV on Cost-Benefit Analysis).

One of the main impacts of the Directive is the automation of eInvoicing. From the findings of the Study on the Evolution of eInvoicing conducted for the European Commission in 2023 34 (see Annex IV), across all categories of stakeholders, the general quantitative benefits from automating the invoicing process are estimated at around EUR 5.28 to EUR 8.4 per eInvoice received (and processed), considering the cost of labour per hour at EUR 46. The same study indicates that eInvoicing can result in cost savings of 61–72%, compared to conventional paper invoice processing. Moreover, greater savings are achieved when automating the entire order-to-pay cycle, including orders, transport documents, invoices, and payment notices. Automating these processes allows for consistent electronic document exchange and enables automated reconciliation, resulting in benefits estimated between EUR 25 and EUR 65 per purchase-to-pay cycle.

As aforementioned, costs vary among and within each stakeholder category based on several external and internal factors. The results of the SME survey show that costs mainly vary depending on the eInvoice service package they select and the volumes of eInvoices handled. In general, enterprises with higher eInvoicing volumes yield more benefits, proportionally to the number of eInvoices they exchange. Furthermore, costs for SMEs may vary depending on whether the SME uses a service provider or an accountant It is important to consider that free-of-charge eInvoicing services are made available to SMEs by some governments, but this did not constitute a major factor for adoption due to lack of user-friendly features and services. Overall, there are considerable differences in costs borne per SME. Pricing per eInvoice transaction ranges from EUR 0.05 (when a EUR 2 500 set-up fee was part of the package) to EUR 0.30 (when an annual fee of EUR 550 was part of the package) 35 .

In regards to the benefits perceived by SMEs, in addition to savings per eInvoice, the main eInvoicing benefits are easier B2G invoicing, followed by improved efficiency, and easier invoicing to large enterprises. Enhanced security and sustainability are ranked as second-tier benefits, followed by improved accuracy and data quality. Increased interoperability and reduction in operating costs are considered as moderately important benefits.

The results of the survey for large corporates show that for one of them (out of seven), the set-up costs for establishing eInvoicing in different EU Member States are significant (EUR 180 000 per country) and require the use of different service providers to cover specific national requirements. Recurring costs vary significantly across the large corporates surveyed, depending, for instance, on the use of internal or external resources for eInvoicing. In regards to the benefits for large corporates, in addition to savings per eInvoice, improved interoperability in supply chains, easier invoicing public bodies, increased accuracy, improved data quality, and enhanced security are considered the most relevant benefits associated with eInvoicing.

On one hand, in general, companies (of all sizes) have to acquire eInvoicing services or software, and the prices for the eInvoicing services are still relatively high. Operating costs for economic operators depend on the availability of cost-effective solutions and services. These are influenced by the number of eInvoicing transactions, formats supported, transmission protocols, and the number of countries in which the businesses operate, as specialised support is required in each Member State that has defined specific formats and requirements. For SMEs, the availability of eInvoicing functionalities within ERP systems and accounting software is considered the most crucial factor in facilitating adoption.

On the other hand, according to the SMEs survey, even when they acquire the respective software/service, a company will fully reap the benefits of its investment when it is able to use electronic invoicing with all its business partners, which is far from being the case. On top of this, all companies would maximise their benefits when they are able to use eInvoicing for further applications, as the VAT reporting introduced by the current ViDA legislative proposals or fulfilling their administrative obligations such as customs declaration, sustainability reporting, and when integrating other processes like electronic orders and despatch advice (see Annex IV).

Mass adoption of eInvoicing would both allow the lowering of fees for eInvoicing services and maximise the benefits from using eInvoicing by default and for further applications.

Lastly, for service providers, while no precise data was provided, the evidence gathered shows that the establishment of a European eInvoicing standard helped simplify decisions in relation to selecting and investing in a single eInvoicing format for both domestic and cross-border public procurement. In addition, based on the findings of the Country Profiles, service providers are perceived as the stakeholders who benefited the most from eInvoicing.

4.1.3.Coherence

4.1.3.1. Internal coherence

The internal coherence of the eInvoicing Directive refers to how the various components of the intervention worked together effectively. These components include: (i) the development and mandatory support of the European eInvoicing standard by EU contracting authorities, and (ii) the establishment of the European Multi-Stakeholder Forum on eInvoicing (EMSFEI).

At the legislative level, the EU's provisions for the mandatory use of the European eInvoicing standard, published in October 2017 in the Official Journal of the EU (OJEU), align seamlessly with the requirements specified in the Directive. The Directive called for the creation of a European standard for the semantic data model of core elements in an eInvoice and identified a limited number of syntaxes complying with this standard for interoperability. Additionally, non-binding guidelines for eInvoicing transmission were stipulated to ensure further interoperability. These requirements have been successfully reflected in the deliverables of the CEN Technical Committee, confirming the coherence between legislative objectives and the development of the European eInvoicing standard.

Furthermore, the development of the European eInvoicing standard is aligned with the recommendations of the European Multi-Stakeholder Forum on Electronic Invoicing (EMSFEI). The EMSFEI's deliverables, including the endorsement of the 'Core Invoice Usage Specifications’, complement and support the implementation of the European standard, addressing potential interoperability challenges effectively.

In conclusion, the internal coherence of the eInvoicing Directive is evident in how its components complement each other. The alignment between the provisions of the Directive, the European eInvoicing standard, and the EMSFEI recommendations has contributed to the successful implementation and advancement of eInvoicing adoption within the EU.

4.1.3.2. External coherence

External coherence refers to how well the eInvoicing Directive aligns with other EU and national interventions that share similar objectives, including the promotion of the digitisation of public procurement and related 2014 Public Procurement Directives 36 , the VAT in the Digital Age (ViDA) proposal 37 , and the new proposal for a regulation 38 repealing the current Late Payment Directive 39 .

This evaluation of the external coherence of the Directive focuses on several key areas of alignment with other policies, as shown in the Figure below. Each intervention category is scored from 1-5, with 1 indicating coherence at a very low extent and 5 indicating coherence at a very high extent.

As Figure 9 shows, Member States assess that the eInvoicing Directive aligns coherently with initiatives aimed at fostering the Internal Market, reducing technical complexity, improving legal certainty, and lowering operating costs for Economic Operators (EOs).

Figure 9 Member States’ perception of the extent the initiative is consistent with other EU and national interventions

(Source: Member State survey)

Digitisation of Public Procurement

The eInvoicing Directive is perceived to be coherent with EU and national interventions related to the digitisation of public procurement. For instance, the 2014 Public Procurement Directives mandate the use of electronic tools and devices for communication in procurement procedures, which complements the eInvoicing Directive's objective of establishing electronic invoicing as a standard practice in public procurement. Member States generally acknowledge this alignment, with some variations in their perceptions, according to the findings of the survey targeting national authorities.

Promoting European Standards

There is a high level of coherence between the eInvoicing Directive and initiatives promoting European standards. Most Member States see strong alignment in this regard. For example, the EU's provision of funds through the CEF programme from 2015 to 2019 has played a crucial role in advancing eInvoicing adoption and the implementation of the European standard. The CEF Telecom eInvoicing calls funded and facilitated the uptake of eInvoicing, supporting the implementation of compliant solutions for B2G transactions in 24 Member States.

The Digital Building Block funded under CEF – eInvoicing Building Block and eDelivery Building Block – supported the implementation of the Directive. While the eInvoicing Building Block provided essential tools to facilitate and validate compliant implementations of the European eInvoicing standard in IT systems and services, the eDelivery Building Block provided technical specifications and standards, installable software, and ancillary services to create a network of nodes for the exchange of eInvoices, as well as other secure digital data exchanges. Some eInvoicing solutions used eDelivery as a transmission method.

In addition, EU structural funds were utilised for similar purposes to the one provided under CEF, with countries like Poland leveraging these funds for eInvoicing initiatives.

Improving Interoperability

The eInvoicing Directive effectively addresses interoperability at both the semantic and legal layers. The European eInvoicing standard, consisting of EN 16931-1 and TS 16931-2, specifies the semantic data model and mandatory syntaxes, ensuring seamless exchange of eInvoices across different systems. This aligns well with the European Interoperability Framework (EIF), as shown by the conceptual model below.

Figure 10 EIF Conceptual Model

However, as mentioned multiple times, it has not addressed all EIF four layers of interoperability, including transmission (technical interoperability) and governance (organisational interoperability), which would have further facilitated interoperability.

VAT in the Digital Age (ViDA) Proposals

The ViDA legislative proposals complement the eInvoicing Directive, especially in ensuring harmonisation and interoperability in cross-border eInvoicing for B2G and B2B transactions. While the Directive limited the mandate to the public sector, ViDA extends the use of eInvoicing to both senders and receivers of eInvoices in intra-Community B2B transactions. This alignment streamlines VAT reporting, reduces administrative burden, and fosters convergence towards the European eInvoicing standard. Several articles in the ViDA proposals directly align with the provisions of the Directive:

·Article 217 defines 'electronic invoice' consistently with the definition of the Directive, clarifying that invoices containing unstructured data cannot be considered as electronic invoices.

·Article 218 establishes electronic invoicing as the default system for issuing invoices, while the deletion of Article 232 removes the need for acceptance of the eInvoice recipient. Taxable persons can issue eInvoices compliant with the European standard and its syntaxes, as set out in the Directive. The mandatory authorisation or verification by tax authorities, known as the 'clearance model’, is also eliminated, ensuring a smoother process for eInvoicing.

·Articles 262 to 264 provide for the submission of information for each transaction and the adoption of implementing rules to define a common electronic message, which establishes a common subset of the European eInvoicing standard referred to as a digital VAT report.

·The deletion of Article 266 enables full harmonisation of data requirements across the EU by eliminating Member States' ability to request additional data on intra-Community transactions. This standardisation ensures that taxpayers submit the same information, regardless of the Member State where the transaction takes place, which is crucial for developing the subset of the EU standard.

·Articles 271a to 273 aim to reduce the administrative burden on taxable persons operating in different Member States by aligning the reporting systems for domestic transactions with the digital reporting system designed for intra-Community transactions. This alignment should be completed by 2028 at the latest.

Additionally, ViDA requires the transmission of data in compliance with the EU eInvoicing standard, while Member States have the flexibility to allow other formats as long as they ensure interoperability with the European standard for intra-Community transactions. This provision aims to promote interoperability at the semantic and syntax levels, making it easier for taxable persons to submit data according to the European standard for digital VAT reporting.

However, the coherence between the two EU initiatives might evolve due to changes in the text of ViDA in the frame of the ongoing Council negotiations.

The implementation of the Directive is coherent with the provisions of the current Late Payment Directive 40 and with the 2023 proposal for a Regulation repealing the current Late Payment Directive 41 , as it automates the approval process for eInvoices, streamlining payment procedures and ensuring timely payments. The 2023 proposal for a Regulation on combating late payment in commercial transactions stresses that it is important to promote systems that give legal certainty as regards the exact date of receipt of invoices by the debtors, including in the field of eInvoicing where the receipt of invoices could generate electronic evidence.

In addition, the current activities carried out by the European Commission with its international partners are coherent with the Directive, both in the formal negotiations and during bilateral dialogues. Currently, non-EU countries, such as Australia, Japan, Malaysia, New Zealand, and Singapore 42 , have based their national eInvoicing specifications on the European standard as extensions and are actively interested in Peppol International (PINT) Invoice Model, operational since July 2023, which generalises the European standard in a systematic way, facilitating interoperable exchange of invoices across the Peppol Network internationally. Other countries and regions have used the European model as a reference, adapting it to their specific needs. The eInvoicing cooperation with EU partner countries offers the opportunity to maximise the investments and implementations already carried out by EU companies to comply with the European standard and minimise trade costs by fostering eInvoicing interoperability across regions.

Overall, the eInvoicing Directive demonstrates a high level of coherence with other relevant interventions.

4.2.How did the EU intervention make a difference and to whom?

The EU's intervention in eInvoicing for public procurement was justified based on the need for interoperability and to prevent fragmentation within the Internal Market. The 2013 Impact Assessment highlighted that actions taken by individual Member States had exacerbated interoperability challenges, resulting in the emergence of various national eInvoicing standards. To address this issue and promote a cohesive approach, the EU's involvement was deemed beneficial.

The survey targetting Member States indicates  varied assessment on the importance of EU-wide interoperability at the semantic and syntax levels. Out of 21 replies, 12 Member States believe that achieving these objectives individually would have been impractical, and they acknowledge the necessity of the EU's intervention as it can be seen in Figure 11. 43

Figure 11 No. of Member States that believe the objectives of the Directive could not be achieved by Member States acting alone

(Source: Member State survey)

The Directive's implementation has yielded positive outcomes in several Member States, in the public and private sector. The EU's intervention has improved the functioning of the Internal Market through the adoption of interoperable eInvoicing solutions in Member States. It has done so by enabling the entire European public sector to process European standard-compliant eInvoices and facilitating the adoption of Peppol to ensure compliance with the European eInvoicing standard. Additionally, it has paved the way for further harmonisation in the B2B context, where the EU standard is set to be reused under the ViDA proposal.

The establishment of a European standard has significantly simplified decisions for contracting authorities and service providers in selecting and investing in a single eInvoicing format for both domestic and cross-border public procurement and because they could use only one standard with many of their business partners who choose to use the European standard. This intervention has proven to be a strong enabler.

Moreover, the Directive has promoted cooperation among Member States and with the European Commission, encouraging the establishment of national eInvoicing fora and fostering cooperation in achieving common objectives.

The European eInvoicing standard is considered to have become a standard with a broader impact by fostering interoperability globally, as demonstrated by the adoption of the Peppol Interoperability Framework outside of Europe in countries like Australia, Malaysia, New Zealand, Japan, and Singapore. The European Commission is involved in several initiatives to foster the European Interoperability Framework at the international level, such as free trade agreements (FTA), Digital Partnerships and Regulatory Dialogues.

In conclusion, the EU's intervention in eInvoicing for public procurement has brought significant added value by addressing interoperability challenges and fostering a cohesive approach within the Internal Market and beyond.

4.3.Is the intervention still relevant?

National authorities from 18 out of 27 Member States, consulted through a stakeholder survey targeting national authorities, consider that the needs and problems addressed by the Directive remain relevant today.

The challenges present at the time of the adoption of the Directive are still relevant today, while other challenges have emerged. The landscape of eInvoicing in Europe has evolved significantly over the past decade, largely due to the impact of the Directive, resulting in a broader adoption of eInvoicing. However, there is a general consensus among stakeholders that the needs and problems addressed by the Directive remain relevant today. An important objective underlying the EU eInvoicing policy and the Directive’s adoption was the increased uptake of eInvoicing in Europe, both in B2G and in B2B.

At the time of the introduction of the Directive, several challenges were identified, as described in the 2013 Impact Assessment. The existence of multiple non-interoperable eInvoicing systems in the EU led to excessive technical complexity and legal uncertainty for economic operators trading across intra-EU borders. Additionally, it imposed high operating costs on economic operators who had to acquire and maintain interoperability between eInvoicing systems and standards across borders within the EU.

These challenges have also evolved from the entry into force of the Directive and during its implementation.

While the EU intervention effectively tackled the primary challenges identified at the time of its introduction, the central challenge - ensuring the interoperability of eInvoicing systems and solutions - persists in both the B2G and B2B contexts. Although the integration of the European eInvoicing standard into national eInvoicing public procurement systems has created the foundation for the harmonisation of the Internal Market, divergent national requirements result in variations of the standard that may not always be compatible.

On the other hand, the implementation of eInvoicing in the B2G context, as well as the expansion of eInvoicing use in B2B, have resulted in the amplification of problems that had not been identified before as issues for policy decisions. In particular, the need to ensure seamless transmission of eInvoices across the EU has emerged as a key new challenge.

One major development consists in the emergence of new applications of eInvoicing, meaning that the eInvoicing software and data can be used for a large spectrum of innovative uses which can simplify life of companies, by reducing their administrative burden or allowing them to use eInvoicing for getting innovative financing. Examples of these new applications include VAT reporting based on eInvoicing as introduced by ViDA; the use of eInvoicing for the fulfilling of administrative obligations, such as customs declaration, sustainability reporting, or crowfactoring, eInvoice finance and other processes such as electronic orders and despatch advice. This is illustrated by the study commissioned by the European Commission “Report on the evolution of eInvoicing in the Digital Age” 44 .

The EU policy on eInvoicing has evolved to encompass new applications of eInvocing, with an initial focus on VAT reporting, introducing a set of novel challenges in the process. In December 2022, the European Commission introduced the ViDA legislative proposals, aiming to mandate the use of eInvoicing by companies for B2B transactions to facilitate cross-border VAT reporting. Simultaneously, the Commission proposals envision electronic invoicing becoming the default invoicing method across the EU by 2028. Consequently, a new need emerged to further adapt the European eInvoicing standard to accommodate diverse business needs, an ongoing process currently underway in CEN.

Monitoring the adoption of eInvoicing in all Member States is another challenge, as procedures and tools may not always be in place in Member States and no monitoring or reporting obligation is included in the Directive.

Moreover, the uptake and interoperability challenges have evolved over time as described below, and the general evolution of eInvoicing brought up new challenges, including those related to B2B use and the need for a common approach in B2B, B2G, and B2C.

4.3.1.Interoperability challenge at the transmission level

Currently, Member States have implemented eInvoicing systems at the national level, and they ensure receiving capabilities for EN-compliant eInvoices. However, challenges exist for the transmission of eInvoices between non-interoperable networks and systems (see Section on Effectiveness). This is to the disadvantage of companies, including SMEs, which have to register to multiple platforms at the request of their customers. Key challenges for eInvoicing are the lack of a mandate for interoperability between public and private eInvoicing platforms and agreement on common transmission methods across the EU.

4.3.2.Uptake challenge

One of the initial challenges that the Directive addressed was the level of adoption of electronic invoicing in the EU. eInvoicing uptake has increased mainly in the Member States that introduced supplier mandates for B2G eInvoicing. 17 Member States, which introduced the obligation on suppliers, report either 100% uptake of eInvoicing in public procurement or this target is expected to be achieved in 2023/2024.

Based on the SME survey conducted in 2022 as part of the stakeholder consultation, this evaluation reaffirms the same need that SMEs expressed when the Directive was implemented (in the Impact Assessment done in 2013). From the SMEs consultation, one of the main challenges for SMEs for the eInvoicing adoption is the lack of integration of eInvoicing with ERP accounting software, which would allow them to access eInvoicing features immediately. Currently, SMEs have to use different solutions with their business partners.

In addition, some Member States with mature eInvoicing infrastructures have and will take measures to promote the use of compliant eInvoicing modules amongst the ERP and accounting software vendors in their countries (e.g. Denmark, Sweden 45 ).

4.3.3.B2B use of the European eInvoicing standard

In view of its use in B2B for VAT reporting in cross-border transactions, and also in domestic transactions if a Member State decides to adopt such a system, the European eInvoicing standard will be adapted by CEN to cover all B2B use cases, including sectoral specifications. In light of the ViDA requirements, this need has been recognised by national authorities across EU Member States and it also emerged from the findings of the consultation activities (surveys and call for evidence). Without the adaptation of the European standard, there is a risk of fragmentation of the Internal Market if different non-interoperable national technical specifications for B2B eInvoicing are being developed. According to the EU standardisation policy reinforced by CEN rules, if there is a European standard for a specific domain, such as eInvoicing, Member States are not allowed to adopt competing national standards.

Member States pointed out that the appropriate legal framework to support B2B eInvoicing requires a deep understanding of business flows. Focusing excessively on the tax collection aspects may cause a bias in the legal framework, undermining other legitimate requirements.

4.3.4.Common approach in B2G, B2B and B2C

Additionally, it has been emphasised that a significant challenge for economic operators stems from varying approaches in national policies concerning B2G, B2B, and even B2C in Member States that choose to regulate the latter. Economic operators, who offer services across all eInvoicing domains, require a unified process where consistent tools can be applied. Presently, the distinction between B2G and B2B approaches poses difficulties for end-users in Member States. This is evident in the development of separate platforms by governments for B2G and B2B eInvoicing, creating unnecessary complexity for enterprises compelled to use both.

5.1.Conclusions

The Directive on electronic invoicing in public procurement has been successful to a certain extent, as shown by the assessment of its effectiveness, efficiency and EU added-value.

Effectiveness

The implementation of the Directive, with the creation and the adoption of the European eInvoicing standard by public authorities and business in Europe has significantly contributed to the harmonisation of electronic invoicing in Europe and its uptake.

The Directive has been partially effective in fulfilling its objectives. With regard to its two direct objectives, translated in the provisions of the Directive, the first one - to set up the European eInvoicing standard - was fully achieved by endorsing the CEN standard (EN 16931) in October 2017. For the second objective, which has been partially achieved, the Directive imposed an obligation on Member States and their public authorities to require the public sector in the EU to accept and process eInvoices issued for contracts under EU Public Procurement Directives if they are compliant with the European eInvoicing standard. The absence of a monitoring mechanism does not allow to assess full achievement of this objective. This intervention has facilitated the establishment of pan-European eInvoicing capabilities.

Concerning the Directive’s underlying objectives, these were partially fulfilled. The Directive aimed at fostering the Internal Market by addressing interoperability, increasing legal certainty, reducing legal complexity, and lowering the cost for economic operators (specific objectives), as well as creating the conditions for the emergence of technical solutions for eInvoicing in public procurement, to ensure interoperability (operational objective).

The Directive primarily focused on addressing interoperability challenges related to semantic and syntax levels. The development of the European eInvoicing standard effectively tackled these two layers of interoperability, amongst four levels, the other two being transmission and governance. Since the publication of the European standard in October 2017, the Directive has fostered the Internal Market by preventing the introduction of new national eInvoicing formats for the public sector (B2G), thus avoiding further fragmentation. This is fully in line with the EU policy on standardisation which prevents Member States from creating competing national standards. While transmission and governance have not been addressed by the Directive, in practice, full interoperability across borders based on the European eInvoicing standard completed by other technical specifications has been ensured by the implementation of Peppol-based solutions in 23 Member States.

The Directive increased legal certainty and reduced technical complexity for eInvoicing by establishing a clear legal basis and setting the European eInvoicing standard as the common standard to be supported by the EU public sector. Article 2 of the Directive establishes the definition of an electronic invoice, which ensures legal clarity: only structured invoices fit for automation are covered. The Directive also sets the requirements for the European eInvoicing standard, including technological neutrality, compatibility with international standards, suitability for commercial transactions between enterprises and support for the needs of SMEs, and consistency with the relevant provisions of Directive 2006/112/EC 46 .

For the specific objective of lowering operating costs for economic operators, the EU intervention has not been particularly successful. Operating costs for economic operators depend on the availability of cost-effective solutions and services, as well as on the uptake of eInvoicing. These are influenced by the number of eInvoicing transactions, formats supported, transmission protocols, and number of countries in which the businesses operate as specialised support is required in each Member State that has mandated specific formats and requirements. Mass adoption of eInvoicing has the potential to contribute to lowering fees for eInvoicing services and maximising the benefits from using eInvoicing by default with all business partners, including governments, and making use of eInvoicing for further applications like VAT or Environmental, Social and Governance (ESG) reporting, crowdfactoring and others.

As regards the operational objective of creating the conditions for the emergence of technical solutions for eInvoicing in public procurement, ensuring interoperability was achieved in two manners: first of all, directly by imposing an obligation on public authorities who either created systems or adapted their systems in order to be able to accept the European standard, therefore, equipping themselves with the capabilities for interoperability and secondly, since its adoption, the Directive facilitated and gave an impetus to the use of Peppol as a technical interoperable network for the exchange of European standard-compliant electronic invoices among Member States.

Efficiency

With regard to the efficiency of the Directive for public authorities, the analysis of the costs and benefits shows a very varied situation from Member State to Member State. However, a significant number of Member States confirmed that the benefits of eInvoicing outweighed their associated costs at the national level. The benefits include operational efficiencies, improved transparency, and environmental benefits. Process automation is perceived as the main driver, followed by the use of the common standard, faster processing, and less complexity.

The costs associated with implementing the Directive's obligation for contracting authorities largely depend on the IT maturity level of the public sector: the higher the digital maturity, the lower the costs. The costs specifically linked to the implementation of the European eInvoicing standard vary depending on the existence of a national standard or technical specifications. However, the highest costs are related to the establishment and maintenance of the national eInvoicing infrastructure.

As regards the efficiency analysis for economic operators, the evaluation has shown that this depends mainly on the uptake of eInvoicing and its mass adoption in two dimensions. On the one hand, in general, companies have to acquire eInvoicing services or software, and the prices for eInvoicing services are still relatively high. On the other hand, even when they acquire the respective software/service, a company will fully reap the benefits of its investment when it is able to use electronic invoicing with all its business partners, which is far from being the case. Mass adoption of eInvoicing has the potential to contribute to lowering the fees for eInvoicing services and maximise the benefits from using eInvoicing by default and for further applications. The results of the consultation activities targeting SMEs show that costs vary depending on the eInvoice service package they selected and the volumes of eInvoices handled. Large companies (multinationals) surveyed reported significantly high set-up costs for establishing eInvoicing in different EU Member States. Recurring costs vary considerably. These costs correlated to the need to use different service providers to cover specific national requirements.

Quantitative benefits from automating the invoicing process are estimated at around EUR 5.28 to EUR 8.4 per eInvoice, considering the cost of labour per hour at EUR 46. Greater savings are achieved when automating the entire order-to-pay cycle, including orders, transport documents, invoices, and payment notices, resulting in benefits estimated between EUR 25 and EUR 65 per cycle.

Coherence

The coherence of the Directive has been evaluated on two main levels: internal and external.

For the internal coherence, the Directive is coherent with the subsequent work on the European eInvoicing standard. First of all, the Directive called for the creation of a European standard for the semantic data model of core elements in an electronic invoice. Secondly, it listed several requirements for the European standard, which have been successfully reflected in the deliverables of CEN TC 434, confirming the coherence between legislative objectives and standard development. As to the establishment and the work of the European Multi-Stakeholder Forum on eInvoicing (EMSFEI) to support EU policy work on eInvoicing, between 2014 and 2020, all EMSFEI's deliverables complemented and supported the implementation of European standard, addressing potential interoperability challenges.

In terms of external coherence, the Directive is well-aligned with various EU digital policies, including the digitisation of public procurement.

·The Directive is aligned with the 2014 Public Procurement Directives, being an integrated part of the legislative package in pursuing the same objective of digitisation of public administration in a harmonised way, and it is also aligned with public procurement standardisation objectives.

·There is a strong link between the Directive and the 2022 European Commission VAT in the Digital Age (ViDA) legislative proposals 47 as regards the role of eInvoicing in VAT reporting and the establishment of electronic invoicing as a default method, starting in 2028.

·The implementation of eInvoicing and the Directive has been coherent with the provisions of the Late Payment Directive. The EU intervention is also aligned with the 2023 proposal for a Regulation repealing the current Late Payment Directive, as it automates the approval process for eInvoices, streamlining payment procedures and ensuring timely payments.

·As regards the EIF, the eInvoicing Directive effectively addresses interoperability at both the semantic and syntax layers, but not at all the interoperability layers, such as transmission and governance.

·In regard to the Digital Building Blocks, the eInvoicing Building Block provided essential tools to facilitate and validate compliant implementations of the European eInvoicing standard in IT systems and services. At the same time, the eDelivery Building Block provided technical specifications and standards, installable software, and ancillary services to create a network of nodes for the exchange of eInvoices, as well as other secure digital data exchanges.

·In addition, the current activities carried out by the European Commission with its international partners are coherent with the Directive, both in the formal negotiations and during bilateral dialogues. The EU-model model (Peppol-based) has been adopted in several countries outside of the EU, including Australia, Japan, Malaysia, New Zealand, and Singapore.

·The Directive aligns with the overall European standardisation policy by supporting the development and maintenance of the European eInvoicing standard, funded by the European Commission.

EU Added Value

There is a broad consensus among EU Member States that the Directive has produced significant value at the EU level since its adoption in 2014.

From the perspective of national authorities, the main EU contribution consists of limiting the emergence of various national eInvoicing standards.

Relevance

The Directive is still relevant today as the challenges that prompted its adoption in 2014 persist. In addition, new challenges and developments have emerged since its adoption.

Concerning the challenges identified in 2014 that continue to be relevant today, one of the main ones is the uptake of eInvoicing in public procurement. It is noteworthy that while the capabilities for receiving electronic invoices in B2G are present to a certain extent, significant adoption in public procurement is primarily observed only in Member States that have required by law their suppliers to send electronic invoices to public authorities or in digitally mature Member States.

It is important to highlight that the uptake of eInvoicing does not necessarily align with the uptake of the European eInvoicing standard. Some Member States have ensured the uptake of eInvoicing in public procurement by imposing obligations on suppliers, but they have not simultaneously required the use of the European standard. Consequently, the adoption of the European Standard remains lower, as it relies on suppliers' voluntary choice.

Secondly, the challenge of interoperability persists, as all four levels of interoperability defined by the European Interoperability Framework, including transmission and governance, were not fully addressed by the Directive. While interoperability at the semantic and syntax level was identified as a challenge in 2014 and addressed by the EU intervention, transmission has emerged as a main challenge during the implementation of the eInvoicing Directive. This challenge is particularly burdensome for SMEs, which are required to register with multiple platforms to accommodate their customers' preferences. The lack of a mandate for interoperability between public and private eInvoicing platforms and agreement on common transmission methods across the EU stand out as key technical challenges for eInvoicing adoption. Beyond its immediate impact within the public procurement sphere, the Directive has played a role in promoting further harmonisation in the B2B context.

5.2.Lessons Learnt

New developments have taken place since the Directive's adoption. In particular, in line with the ViDA (VAT in the Digital Age) legislative proposals, EU action to ensure that the current European standard evolves to cover all B2B cases would avoid unnecessary burden on companies as they will use the same system to fulfil several obligations. According to the EU standardisation policy reinforced by CEN rules, if there is a European standard for a specific domain, such as eInvoicing, Member States are not allowed to adopt competing national standards. If the European eInvoicing standard is not enforced in B2B, there is a risk of fragmentation within the Internal Market stemming from the use of national non-interoperable technical specifications for B2B eInvoicing. The coherence between the Directive and ViDA is ensured with the current draft legislative proposals, which are, however, subject to evolution during the ongoing political negotiations. In light of the above, coherence between the two legislative instruments appears particularly important.

Monitoring the technical developments and adoption at the EU level also poses challenges due to varying procedures and requirements in the Member States and the absence of an obligation for monitoring and reporting.

As regards technical complexity, businesses, especially SMEs, experienced technical challenges when using eInvoicing, including support for multiple eInvoicing formats, archiving for audit purposes, integration with service providers, data security and privacy concerns, interoperability with trading partners, infrastructure, and connectivity.

Overall, the Directive is a significant achievement in the harmonisation of eInvoicing across Europe and beyond. It has successfully accomplished its goal of interoperability at the semantic and syntax levels, but it did not fully solve all interoperability related issues. Especially, the implementation of the Directive by the Member States showed that addressing interoperability at the transmission level is a critical element for full interoperability.

Lead DG and internal references

DG GROW is the lead Directorate General for the evaluation of the eInvoicing Directive.

The Decide Planning entry is: PLAN/2022/2793

Organisation and timing

The evaluation was launched in December 2022. The evaluation was coordinated by an InterService Steering Group (ISG), which was established early in the evaluation process and which was consulted on all key deliverables:

·Stakeholder consultation strategy, which set a number or consultation activities comprising a Call for Evidence and targeted consultation activities, in the form of interviews and surveys.

·Call for Evidence, which was open for feedback from 17 March 2023 until 14 April 2023.

·External Evaluation Study, which was conducted by an external contractor between November 2022 and July 2023.

·Report from the Commission to the European Parliament and Council and Commission Staff Working document.

The ISG is composed of DG GROW (unit G4), TAXUD, CNECT, DIGIT, Legal Service and Secretariat General.

Exceptions to the better regulation guidelines

The Better Regulation Guidelines were followed. No exceptions applicable.

Consultation of the RSB (if applicable)

This evaluation was not selected for assessment by the Regulatory Scrutiny Board.

Evidence, sources and quality

The evaluation relies to a large extent on the external support study. During the evaluation the consultant used a mix of approaches including desk research, field research and case studies.

Literature evidence was identified to develop several of the indicators that support the analysis for the evaluation questions and subsequently to identify key information for the development of the answers to the evaluation questions.

The evaluation findings rely on different sources and data collection methods, including desk research, stakeholder consultations, a Call for Evidence and interviews.

The Commission published a Call for Evidence in December 2022 48 .

A study was commissioned to an external contractor to provide information to support the preparation of the Staff Working Document evaluation and the report to the European Parliament and the Council.

The aim of the desk research was to collect, organise and analyse relevant information from relevant secondary sources. This included statistical data, legislative documents, and relevant reports and studies, such as the KMPG eInvoicing and Digital Reporting global updates 49 , as well as data collected by the European Commission in the context of the eProcurement monitoring activities in the Member States and the EC eInvoicing country factsheets 50 .

Different stakeholder groups were consulted in the context of the study by developing specific targeted surveys.

·A questionnaire for national authorities was launched on 30 November 2022 and was open until 28 April 2023. Twenty-three Member States responded to the survey. National authorities from Iceland and Norway also provided feedback. Four Member States did not respond (Hungary, Bulgaria, Slovakia, and Spain).

·A survey was published for SMEs, and 100 companies responded. These enterprises were based in Spain, Germany, Italy, Belgium, Sweden, France, and Estonia. There were 63 micro, 16 medium, 18 small, and three did not state their size.

·A survey was also published for large enterprises, and seven of them responded. These were multinationals, which included sectors such as Energy, Chemical, Retail, and International Shipping.

Professional associations have also been consulted to gather more quantitative data on the uptake of eInvoicing and to use it to triangulate data received by national authorities in Member States. The OpenPeppol Association 51 and GENA, the European Association of the eInvoicing Service Providers, were consulted and contributed to the findings of this study.

The OpenPeppol Association provided feedback based on data from seven of its members. They operate in Denmark, Germany, Italy, Sweden, The Netherlands, and Poland.

GENA responded to the survey based on data from eight members with operations in Belgium, Croatia, Estonia, Hungary, Norway, Portugal, Romania, Slovenia, and Sweden. The largest service provider handled 80 million eInvoices per year.

Interviews with three service providers and Enterprise Resource Planning (ERP) vendors have been conducted to collect more details on why stakeholders hold certain opinions.

Four case studies were carried out based on the desk research and interviews covering the following countries: Croatia, Finland, France, and Italy. These four countries represent different eInvoicing scenarios.

All the analytical findings provide the basis for the evaluation of how the Directive has scored on the evaluation criteria. Each criterion was addressed through evaluation questions.

Assumptions and Limitations

Limitations and robustness of findings

While the study was designed to ensure the robustness of the evidence supporting the findings, limitations were identified during the analysis of the gathered information.

Limitations concerning the stakeholder consultation

The information gaps in the three Member States that did not reply at all to the questionnaire were addressed through desk research and insights from the authors. Although the Hungarian Prime Minister's Office provided some feedback on eInvoicing, it contained very limited information. The European Commission's desk officers were contacted to liaise with the non-responsive Member States to improve the response rate. Additionally, additional survey were conducted from 5 May to 30 June 2023 to gather further feedback. Interviews were conducted with two additional service providers, and insights from two webinars with Greek and Swedish stakeholders were integrated into the study's results.

Reaching accounting associations proved challenging, and no data were directly received from them through the surveys. However, this limitation was compensated for through comprehensive desk research.

Limitations concerning data availability

As there is no obligation for Member States to report on eInvoicing transactions, only a few national authorities provided detailed information, and even fewer at the cross-border level. While data availability has improved in recent years, estimates for pre-2019 had to be used, and triangulation with other data sources was performed. The evaluation relies primarily on stakeholder-reported data and data published on national authorities' portals.

This annex encompasses three distinct Evaluation Matrices — for National Authorities, Economic Operators, and Service Providers. These matrices serve as structured tools, each designed to assess specific entities' effectiveness, efficiency, EU added value, coherence, and relevance within their domains. With tailored evaluation criteria and mapped questions.

Annex III.1 Evaluation Matrix National Authorities

This matrix evaluates National Authorities' performance through criteria such as effectiveness, efficiency, EU added value, relevance, and coherence. With 48 mapped questions, it assesses key aspects such as the implementation of eInvoicing mandates and alignment with VAT digital reporting, ensuring compliance with EU standards and directives.

* Questionnaire refers to the questionnaire of national authorities

Annex III.2 Evaluation Matrix Economic Operators

This matrix puts a focus on Economic Operators, this matrix evaluates criteria of effectiveness, efficiency, and uptake related to eInvoicing. With 21 mapped questions, it examines elements such as the clarity of legal requirements and seeks measures to enhance eInvoicing adoption among EU businesses, aiming to streamline operations and improve compliance with both national and European standards.