B2G Invoicing in Luxembourg: Compulsory for Businesses of All Sizes (2023)

From March 18, 2023, B2G invoicing will be compulsory for businesses of all sizes in Luxembourg. Luxembourg passed the law that makes B2G e-invoicing mandatory in the country on December 13, 2021. The implementation is in three phases. It started on May 18, 2022, and will end on March 18, 2023.

Luxembourg has taken a cue from the other two Benelux countries to make e-invoicing compulsory in public procurements and concession contracts.

This electronic invoicing regulation seeks to solve interoperability problems by providing standards that allow seamless cross-border transactions and payment document exchange.

The regulation ensures that whatever your country and country’s e-invoicing standard, you’ll be able to send compliant electronic invoices to public bodies in Luxembourg.

However, the implementation of the e-invoicing regulation affects businesses differently depending on their sizes.

How does the B2G e-invoicing regulation affect large, medium-sized, and small businesses? How can you prepare your business for B2G invoicing in Luxembourg?

This brief “B2G invoicing in Luxembourg” guide will answer these questions and more. If you transact with the public sector in Luxembourg, this article will help you comply with e-invoicing requirements so that you can get paid.

What is B2G e-invoicing?

B2G e-invoicing is the use of electronic invoices in business-to-government transactions.

An invoice is a sales agreement between a business and a client. Businesses need to raise this document to get paid for goods or services rendered.

A business requests payment for goods supplied or services rendered by creating an invoice and sending it to the client. The invoice provides documentation of the goods supplied (or services rendered), the amount owed, and the payment terms.

Traditionally, invoices are paper documents. However, paper invoices are fraught with many problems. They are prone to errors and fraud, increased operating costs, slow invoice processing, and more.

Electronic invoicing (e-invoicing) solves the many problems of traditional paper invoicing. For example, e-invoicing simplifies administrative processes, increases transparency, reduces operating costs, facilitates invoice processing, etc.

Since there are louder calls for transparency in government agencies, there is a greater need for e-invoicing in business-to-government transactions. Many countries have listened to those calls to make e-invoicing compulsory for B2G transactions.

If a country makes B2G e-invoicing mandatory, then you must support electronic services if you’re a business that transacts with entities governed by public law. Without supporting e-invoicing, you’ll be unable to request payment for your services.

In Luxembourg, these entities include:

  • the Luxembourg state and municipalities
  • Bodies created to meet general interest needs (other than industrial or commercial ones)
  • Bodies financed and controlled by the public authorities (as well as associations of these bodies)

The timeline for B2G e-invoicing implementation in Luxembourg

Luxembourg is implementing the law mandating B2G e-invoicing in three phases. The three-phase implementation spans a ten-month period that started on May 18, 2022, and will end on March 18, 2023.

The Luxembourg government passed the law to make B2G electronic invoicing compulsory on December 13, 2021. Knowing that businesses need time to create enabling systems, the government gave extended deadlines for compliance.

The deadline for compliance is based on the size of your business as follows:

  • Large businesses - May 18, 2022.
  • Medium businesses - October 18, 2022.
  • Small businesses - March 18, 2023.

Large business

Medium business

Small business

A business that meets two of the following criteria:

  • Its balance sheet is over €20 million

  • Its invoices are over €40 annually

  • It has over 250 full-time staff

A business that meets two of the following criteria:

  • Its balance sheet is between €4.4 million and €20 million

  • Its invoices are between €8.8 million and €40 annually

  • It has between 50 - 250 full-time staff

A business that meets two of the following criteria:

  • Its balance sheet is €4.4 million or less

  • Its invoices are less than €8.8 million annually

  • It has less than 50 full-time staff

Thus, B2G electronic invoicing is already compulsory for large and medium-sized economic operators in Luxembourg. But small businesses have until March 18, 2023, to comply. Newly established companies also have until March 18, 2023, to comply with B2G e-invoicing.

When will B2G e-invoicing become obligatory in Luxembourg for all businesses?

B2G e-invoicing will become compulsory for all businesses in Luxembourg on March 18, 2023.

The impending deadline should encourage economic operators to consider how to cope so they can continue to invoice their public clients.

The May 18, 2022, deadline for large companies to implement B2G e-invoicing has passed. The October 18, 2022, deadline for medium-sized companies has also passed. However, the March 18, 2023, deadline for small businesses is yet in the future.

Thus, at the moment (end of 2022), only large and medium-sized economic operators that transact with public sector bodies are required to submit e-invoices. Small businesses may still use traditional paper invoices.

However, beginning from March 18, 2023, only electronic invoices will be accepted for B2G transactions in Luxembourg, regardless of company size.

How will B2G e-invoicing work in Luxembourg

The Luxembourgish new law on e-invoicing selects the most common delivery network (Peppol) for the automated receipt of electronic invoices.

Peppol stands for Pan-European Public Procurement Online. It is a network that simplifies cross-border payments by providing a singular standard that can be used in cross-border procurements.

The European Commission started the network in 2008 as a test project. However, because of its huge success, more worldwide countries adopted it upon full deployment.

The Peppol network solves interoperability issues arising from using different electronic invoicing standards. Before Peppol, businesses used to have a hard time sending invoices to clients in another country with a different invoicing format.

Peppol solves this by creating a uniform standard. So, you can send an invoice to a client in another part of the world without worrying about compliance with invoicing format of the destination country.

When using Peppol to send an invoice to a company or government on the network, you are sure of sending a compliant electronic invoice.

So, economic operators concerned use the Peppol system when sending invoices to Luxembourgian public clients.

However, when they are not equipped to do so, they may create and submit electronic invoice using an online form which should be available via Luxembourg’s myGuichet platform.

What is the required format for electronic invoices?

Luxembourg’s e-invoicing format is Peppol Business Interoperability Specifications (BIS) 3.0.

The BIS 3.0 provides specifications for implementing a Peppol business process. It is a CIUS (core invoice usage specification) of EN16931. So, any document that complies with it will comply with the European Standard.

The European Standard on electronic invoicing defines criteria that invoices and the automated transmission system of these invoices must meet.

How to submit compliant B2G e-invoices in Luxembourg

To submit compliant B2G e-invoices, you need your own Peppol access point to access all other parties using the network.

The Peppol network is like a telephone network for invoices. Everyone in the network has an access point provider, akin to a telephone network provider.

The network uses the “connect one, connect all” principle. Once registered, you can reach all users in the network, regardless of their access points.

When you submit an electronic invoice, it follows the four-corner model.

It moves from your device to your access point provider. Then it moves from your access point provider to your recipient’s access point provider. Lastly, it moves from your recipient access point provider to your recipient.

So, to send e-invoices through the Peppol network, finding a certified Peppol access point provider (like Storecove) is crucial. Storecove will furnish you with your own access point, giving you a unique Peppol ID on the network.

When you send an e-invoice, Storecove will get it, convert it to the right format, and send the compliant e-invoice to your recipient via their access points.

How companies can get ready for B2G electronic invoicing in Luxembourg

You can prepare your business to send invoices electronically by understanding the applicable e-invoicing standard, ensuring your ERP system supports the standard and partnering with a reliable access point provider.

Since B2G electronic invoicing will soon become compulsory for all Luxembourgian businesses, the best time to prepare your business to send invoices electronically is now.

The Luxembourgian e-invoicing standard is Peppol. So, the starting point when prepping your company for e-invoicing is understanding the Peppol network. The next step is to create an ERP (Enterprise Resource Planning) system that can support the applicable e-invoicing standard.

However, the most important step for prepping your company for e-invoicing is partnering with a reliable access point provider. The right access point provider will connect you to the e-invoicing network and help you send compliant electronic invoices.

Takeaway: Get ready for compliant B2G invoicing

Luxembourg passed a law making e-invoicing compulsory for businesses involved in public contracts.

The 10-month implementation of the law began with large economic operators on May 18, 2022, and extended to medium-sized economic operators on October 18, 2022. While small businesses have until March 18, 2023, to comply with the law.

So, starting from March 18, 2023, all businesses in Luxembourg transacting with public entities must invoice electronically.

Luxembourg processes electronic invoices on the Peppol network using the BIS 3.0 format.

Sending compliant electronic invoices on the Peppol network starts with finding a reliable access point provider.

Storecove is a certified PEPPOL access point provider that can connect you to the Peppol network and help you send compliant invoices on a global scale.

More information about B2G Invoicing in Luxembourg?

Contact us for more information or schedule a consult with one of our e-invoicing experts.

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