Implementing mandatory electronic invoicing in Lithuania began in 2017 as the government tried to make transactions more transparent.
At this stage, electronic invoices were transmitted in the national XML format. This was mainly aimed at combating tax fraud and evasion.
Later, in April 2019, Lithuania connected to the PEPPOL network, making things even easier for businesses. However, B2B e-invoicing remains optional.
The government is still working towards mandating e-invoicing for all businesses. Their recent project, the eSaskaita invoicing tool, launched in September 2023, offers multiple ways to transmit electronic invoices.
The eSaskaita is free to use for businesses for the first five years. It is integrated with PEPPOL, allowing users to transmit e-invoices through their desired Access Point providers.
In this article, we’ll cover e-invoicing in Lithuania, including who it is mandatory for, the implementation timeline, and how to submit compliant electronic invoices in Lithuania.
Is e-invoicing mandatory in Lithuania?
Mandatory electronic invoicing for B2G transactions in Lithuania began in July 2017. It also demands users to include an electronic signature in all their transaction documents.
Some businesses in the private sector use e-invoicing, but this is not mandatory. However, it is highly encouraged due to its numerous advantages, such as quicker and more transparent transactions.
The eSaskaita platform is likely to be mandated for all businesses in the near future. There are no explicit requirements for issuing B2B e-invoices using the platform, and the buyer’s consent is required.
Who governs electronic invoicing in Lithuania?
Lithuania's governing body of electronic invoicing is the Ministry of Finance. It is responsible for ensuring compliance for all mandated parties.
All relevant information sent to the local contracting authorities through the eSaskaita platform is readily available to the State Treasury Department of Lithuania's Ministry of Finance.
The Public Procurement Office and the Central Purchasing Organisation also electronically receive information regarding procurement contracts. This includes the submission and payment of the e-invoice.
The State Tax Inspectorate under the Ministry of Finance of Lithuania also gets access to e-invoicing information. The tax authorities use the Smart Tax Administration System (i.MAS) to ensure electronic tax compliance and facilitate tax collection processes.
The i.MAS consists of three subsystems:
This represents a monthly report of necessary consignment notes and any documents involved in transporting goods.
SAF is the monthly reporting of invoice information sent and received to a buyer or supplier. This subsystem is only available to registered Lithuanian VAT taxpayers.
This is an electronic tax audit file for any transactional entity the State Tax Inspectorate uses during audits.
Timeline for the implementation of e-invoicing in Lithuania
Lithuania adopted electronic invoicing in mid-2017 and has made some progress towards its development.
Let us look at the implementation timeline for e-invoicing in Lithuania:
The mandate for B2G electronic invoicing in July 2017 had a specified period. It was the first step towards e-invoicing, and the government allowed a grace period of almost one year.
This gave the public contracting authorities and their suppliers adequate time to acquire appropriate software. They were required to be in a position to receive and process electronic invoices.
In April 2019, Lithuania joined the PEPPOL (Pan-European Public Procurement Online) network. This secure worldwide network allows businesses to exchange critical documents with all those registered on the platform.
When using PEPPOL, you must use the PEPPOL BIS Billing 3.0 format and meet all other requirements in the EU Directive 2014/55/EU.
The Ministry of the Economy of Lithuania launched the eSaskaita electronic invoicing tool. The tool allows a 5-year free use for businesses sending and receiving invoices.
The tool is integrated with PEPPOL and can also be used by businesses in the private sector. However, the government has yet to make it mandatory for B2B.
The Lithuanian government announced the development of this technological e-invoicing solution on November 9, 2022.
According to the agreement with the winning developer, they were required to implement it by September 1, 2023, and maintain it for a minimum of 2 years.
Characteristics of e-invoicing in Lithuania
Lithuania's Ministry of Finance has set rules and regulations regarding electronic invoicing. Here are the characteristics of invoices transmitted in Lithuania:
After integration with PEPPOL, the BIS 3.0 became accepted as an ideal e-invoicing format. However, the original national XML format is still accepted in the eSaskaita platform.
VAT invoices issued in Lithuania must include the following information to be compliant:
- Unique serial number
- Date issued
- Details of the supplier, including their VAT identification number, name, and address
- Buyers details, including their VAT identification number, name, and address
- Date of supply if it differs from the invoice date
- Unit price and applicable discount(s)
- VAT rate
- Taxable amount of goods
- Total VAT in euros
eSaskaita is currently the mandatory e-invoicing tool to use in Lithuania. Public contracting authorities and suppliers must share all their business invoices through the platform.
A digital signature is mandatory for invoices shared between the public sector and their suppliers. It remains optional for the private sector.
The minimum archiving period for invoices in Lithuania is 10 years. You can also archive your invoices abroad but under specific conditions.
How to submit e-invoicing in Lithuania through eSaskaita
There are three ways of transmitting electronic invoices through eSaskaita. The platform is not very user-friendly, making it challenging for some business owners.
Let us look at the available ways of using eSaskaita:
1. Manually inputting e-invoice information on eSaskaita
This method requires you to be in a position to work with the platform comfortably. You must register on the platform and fill in your business details.
Manually inputting electronic invoice information on eSaskaita can be challenging for some. The platform’s usability is not very friendly, and may take some time to get used to it.
2. Uploading to eSaskaita in the original national XML format
This method is more straightforward than the first one. Your task will be to upload a ready invoice before sending it.
However, you must have an appropriate e-invoicing solution capable of generating compliant e-invoices.
3. Using a PEPPOL Access Point provider
Using a PEPPOL Access Point (AP) provider is the best way to combat eSaskaita’s challenging user design.
The following are the steps involved in submitting a compliant e-invoice using an AP provider:
Step one: Register on eSaskaita
The first step towards using eSaskaita is registering on the platform by filling in your business details. All applications are reviewed, and all public contracting suppliers and their suppliers receive a digital signature after verification.
Step two: Prepare your invoice
Prepare your electronic invoice while adhering to Lithuania’s rules and regulations. You should have an ERP system that can generate invoices in PEPPOL BIS Billing 3.0 or the national XML format.
Ensure you have filled out the required information, including the buyer’s and supplier’s details.
Step three: Send the invoice through a reliable PEPPOL Access Point provider
Using a PEPPOL Access Point provider is a highly effective way of sending e-invoices in Lithuania. A reliable service provider such as Storecove helps businesses ensure compliance with all their invoices.
At Storecove, we keep up with your country’s e-invoicing rules and regulations, so you don’t have to. We convert your document into a standardized PEPPOL BIS billing 3.0 format that eSaskaita accepts.
Step four: Payment and processing
After sending your invoice, the recipient can accept or reject it for various reasons, such as errors or misinformation. If they accept it, they can process it and make payment.
How can businesses prepare for e-invoicing in Lithuania?
Despite e-invoicing being mandatory for companies in the private sector in Lithuania, this will likely be mandated in the near future. The eSaskaita is a major step by the government toward making e-invoicing mandatory for all taxpayers.
Here are ways businesses in Lithuania can prepare for e-invoicing:
Acquire reliable accounting and invoicing software
Businesses must adopt software that can generate electronic invoices in XML or PEPPOL BIS Billing 3.0 format. Having reliable accounting software also enables archiving invoices and tracking your tax records.
Partner with a reputable PEPPOL Access Point provider
Since eSaskaita is integrated with PEPPOL, partnering with an AP service provider like Storecove can help streamline your e-invoicing processes.
We work with you to help you avoid breaking the rules and regulations set by the Minister of Finance of Lithuania.
You may also like: How Many Types of E-Invoice Are There? (In-Depth Analysis).
Takeaway: Streamline your business success with e-invoicing in Lithuania
The development of e-invoicing in Lithuania in the coming years is inevitable. The recent introduction of eSaskaita will pave the way for major developments as the government will likely advance the tool to help and accommodate more businesses.
If your business is not ready, you must invest in preparing for e-invoicing. This will help lower operational costs while making transactions quicker.
Your competitors are already making moves towards streamlining their invoicing processes.
Contact Storecove today to learn how you can join thousands of businesses worldwide that have already embraced the future of invoicing.
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