E-invoices and freedom of agreement
December 2024
Effective from July next year, a regulation on e-invoicing will be implemented in Estonia, impacting all accounting entities to varying degrees.
Currently, e-invoicing is mandatory for transactions with public sector buyers, while private sector parties have the discretion to choose their invoicing method. With the upcoming change in July 2025, entrepreneurs registered as recipients of e-invoices in the commercial register can automatically expect to receive e-invoices. The legislative goal is to increase the use of e-invoices in private sector transactions.
The freedom of agreement will remain intact even after the new regulation takes effect, allowing different invoicing methods to be agreed upon with those who have registered as e-invoice recipients. It is important to note that in the absence of a different agreement, registered recipients can expect e-invoices and may decline to fulfill their obligations if an invoice is submitted in a different format. This could result in additional costs for sellers to submit correct invoices promptly, although late fees and compensation for unpaid invoices are not anticipated.
The new regulation offers more flexibility compared to the current one, as it will be possible to agree on different e-invoice submission methods even if the buyer is a public sector entity. However, such agreements are likely to remain rare in practice.
Whether the amendment will successfully promote broader adoption of e-invoices in the private sector remains to be seen. To avoid potential disputes, it is advisable for both invoice senders and recipients to consider invoice format when negotiating contract terms in the future.
Author: Karen Root
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