e-Invoicing in Estonia: Timeline, Guidelines, Process, and Steps for Implementation

Estonia is set to roll out a new phase of e-invoicing rules starting 1 July 2025. Although e-invoicing was enforced for B2G transactions in 2019, the new regulations will make its application more widespread. With the new regulations, any buyer registered with the Estonian Business Register as an e-invoice recipient can request their suppliers to provide invoices in an electronic format.

This applies to both B2B and B2G transactions and is thus a significant move towards digitalisation on Estonia's part. Estonian e-invoices need to be in European format (EN16931) unless otherwise agreed upon by the buyer and seller. In this blog, we’ll explain what Estonia e-invoicing is, the timeline, key requirements, and what businesses need to do for a smooth e-invoicing implementation in Estonia.

What is e-Invoicing in Estonia?

E-invoicing in Estonia is the formal & digital exchange of invoices. Estonia also accommodates both the European e-invoice format (EN16931 – UBL BIS 3.0 or CII) and domestic eXML 1.2 format. Companies need to be registered on the PEPPOL network and use a certified access point provider to issue e-invoices, particularly when working with public sector organizations enrolled on RIK, the national e-invoice system administered by the Ministry of Justice.

e-Invoice Implementation Timeline

Estonia implemented e-invoicing step by step to ensure transparency and efficiency in the public and private sectors. Here's a quick look at the key milestones:

e-Invoicing Process in Estonia

Estonia has a decentralized, flexible, and European standard-based e-invoicing process. Here is a step-by-step procedure of how companies can receive, send, and process e-invoices.

• Step 1: Set up your PEPPOL profile: First, register your company on the PEPPOL network. This allows you to send Estonia e-invoices.
• Step 2: Choose an access point provider: You require a certified provider to send invoices via PEPPOL. Choose a reliable e-invoicing partner to facilitate a smooth transfer. 
• Step 3: Ensure your recipient is registered: If you're invoicing a public sector organization, it needs to be registered with RIK (which is controlled by the Estonian Ministry of Justice). RIK provides the e-invoice platform for government organizations.
• Step 4: Select your recipient from the PEPPOL register: When you're ready, search the PEPPOL register and choose your recipient. The system will automatically fill in the information you require.
• Step 5: Generate the eInvoice: Create the e-invoice using your accounting/ERP system or outsource it to software providers like RIK’s eFinancials or Merit Tarkvara.
• Step 6: Complete and send your invoice: Use European Standard EN 16931 (Peppol BIS Billing 3.0) or Estonia’s national XML-based standard (EVS 923:2014) to create invoices. 
• Step 7: Track it: Use the PEPPOL invoice archive to check whether your invoice was processed and follow its status. Re-check the details if necessary. 

e-Invoicing Compliance Guidelines

Estonian businesses have to adhere to these essential e-invoicing guidelines to maintain government compliance.

1. Invoice Format: E-invoices must follow either the national XML format (EVS 923:2014/AC:2017) or the European standard (UBL 2.1 or UN/CEFACT CII).
2. Mandatory Information on Invoice: Invoices must be issued within 7 days of delivering goods or services and must include details like issue date, invoice number, supplier & buyer information, price, description, etc.
3. Archiving Requirement: E-invoices must be stored for at least 7 years. 
4. Digital Signature: A digital signature is optional, not mandatory.

Who Needs to Comply with e-Invoicing in Estonia?

E-invoicing in Estonia is compulsory for all B2G transactions. From 1 July 2025, Estonia is implementing a buyer-choice scheme; buyers on the e-Business Register can request e-invoices, and sellers must comply with both B2B and B2G transactions. 

Benefits of e-Invoicing in Estonia

E-invoicing offers several practical advantages for businesses in Estonia:

• Lower cost & lower carbon footprint: It saves invoicing expense by more than 50% and mitigates the requirement for paper usage, lowering environmental impact.
• Faster payments: Electronic invoicing allows for quicker response from the customer through automated reminders.
• Less human error: Electronic platforms minimize human errors present in paper-based invoices.
• Simpler tracking of finances: Invoices are simpler to archive, search, and retrieve, helping businesses stay organized and tax compliant.
• Secure and legally binding: Invoices are offered in a standard format, stored securely, and are legally compliant with Estonia's e-invoicing guidelines.

How can ClearTax help a business with e-Invoicing in Estonia?

ClearTax streamlines Estonian e-invoicing compliance with a strong, end-to-end solution:

• Seamless ERP & POS Integration: Automatically generates and sends invoices in EN16931 UBL - BIS 3.0, CII or the local format eXML 1.2 as per Estonian e-invoicing norms.
• Real-Time Validation: Validates invoices against Estonian VAT laws and Accounting Act regulations for hassle-free approval and zero-error submission.
• Cloud-Based Platform: Facilitates secure storage, tracking, and retrieval of e-invoices for the 7-year archiving requirement.
• Automated Alerts & Compliance Monitoring: Eliminates the errors introduced by manual work, prevents deadline failure, and keeps your business audit-compliant at all times.

Conclusion

Estonia's e-invoicing mandate provides safe, standard, and transparent billing for B2G and B2B transactions. From 1st July 2025, any registered buyer can request e-invoices, and sellers have to comply. ClearTax simplifies it with automated compliance, PEPPOL-ready invoice, and smooth ERP integration. Stay compliant and future-ready, partner with ClearTax today for smooth & efficient e-invoicing.