E-invoicing Compliance In Luxembourg [Guide]

Luxembourg has passed a law to gradually make B2G e-invoicing mandatory from May 18, 2022, to March 18, 2023. E-invoices will be processed on the Peppol network using the BIS 3.0 format.

Cross-border transactions are hampered by interoperability issues arising from using different e-invoicing standards.

So, e-invoicing regulations seek to solve interoperability problems by providing standards that ease cross-border public procurements.

The Luxembourg government does this by implementing mandatory e-invoicing.

That’s why if you want to participate in public contracts in Luxembourg, you'll need to comply with the e-invoicing requirements.

In this article, you’ll learn all about e-invoicing compliance in Luxembourg.

Specifically, you’ll know the timelines for implementing mandatory e-invoicing, the importance, requirements, and how to send compliant e-invoices in Luxembourg.

Let’s dive in.

Is e-invoicing mandatory in Luxembourg?

The government of Luxembourg passed a new law on December 13, 2021, stating that structured electronic invoices will replace traditional invoices in public procurement and concession contracts.

With this law, e-invoicing will be mandatory in Luxembourg for B2G transactions. However, the regulation will come into force gradually.

Timelines for implementing mandatory e-invoicing in Luxembourg

The Luxembourg government has given extended compliance deadlines, knowing that compliance will be challenging, especially for small and medium-scale companies.

These deadlines are based on the size of the companies.

Large companies

E-invoicing will become mandatory for large companies from May 18, 2022.

A large company meets two of the following conditions:

The balance exceeds €20 million
The invoices are over €40 million annually
The company has over 250 full-time employees

Medium companies

E-invoicing will become mandatory for medium companies from October 18, 2022.

A medium company meets two of the following conditions:

The balance is between €4.4 million and €20 million
The invoices are between €8.8 million and €40 million annually
The company has between 50 - 250 full-time staff

Small companies

E-invoicing will become mandatory for small companies from March 18, 2023.

A small company meets at least two of the following conditions:

The balance does not exceed €4.4 million
The invoices are less than €8.8 million annually
The full-time staff are less than 50

E-invoicing in B2B transactions in Luxembourg

Unlike B2G transactions where e-invoicing will be mandatory, it’s not mandatory in B2B transactions.

E-invoices are voluntary, but before you can issue them as a seller, you'll need the buyer's consent.

What are the e-invoicing requirements in Luxembourg?

E-invoicing requirements in Luxembourg overview:

Network: Peppol
Format: Peppol BIS 3.0
Digital Signature: Not required
Archiving: 10 years

E-invoicing network

Luxembourg uses the central Peppol network to submit and process electronic invoices.

Peppol (Pan-European Public Procurement Online) is a network that provides technology standards that can be implemented by different governments so that one standard is used in cross-border procurements.

Though Peppol was created for countries in the European Union, it is now an international standard.

E-invoicing format

In Luxembourg, the e-invoicing format used is the Peppol Business Interoperability Specifications (BIS) 3.0.

The BIS provides specifications for implementing a Peppol business process.

This BIS 3.0 is a core invoice usage specification of EN16931. This means that any document compliant with the specification will be compliant with the European Standard.

Archiving

In Luxembourg, e-invoices are required to be archived for 10 years.

Processed invoices are typically moved to a separate storage device for long-term retention. This is called archiving, and it's required by law for regulatory and tax evidence purposes.

For example, the directive 2010/45/EU requires all companies in the European Union to archive invoices.

Invoice retention periods in Europe vary between 3 - 10 years. So, the 10 years archiving requirement of Luxembourg is in line with other European countries.

Digital signature

E-signatures are not obligatory for e-invoicing in Luxembourg.

An e-signature is a signature in a digital format. Like the traditional signatures on papers, e-signatures are affixed to e-documents to certify them.

But the EU directive 2010/45/EU sets out clearly that e-signatures are not required on e-invoices. So, Luxembourg is very well in line with the requirements of the EU.

How to exchange e-invoicing in Luxembourg

To exchange e-invoices in the Peppol network, you need a Peppol Access Point provider. This is because the network uses the 4-corner model.

An invoice that you send goes from you to your access point provider. Your access point provider will send it to the receiver's access point provider, who then forwards it to the receiver.

The operation is similar to that of a telecommunication network. A text message will move from your telecom service provider to the recipient’s provider before getting to the recipient.

Storecove is a certified Peppol access point provider. Storecove will receive your document, convert it to the right format, and safely send it through the network to the recipient (via the recipient's access point provider).

5 Reasons to start e-invoicing in Luxembourg

The main benefit of making B2G e-invoicing mandatory is to simplify administrative processes and increase transparency in public procurements.

Specifically, the benefits of e-invoicing include:

Simplifies administrative processes
Reduces operating costs
Facilitates invoice reception
Reduces errors
Increases transparency and reduces fraud

1. E-invoicing simplifies administrative processes

Mandating e-invoicing forces economic operators to use the same standard when issuing electronic invoices.

The law to roll out mandatory e-invoicing in Luxembourg modifies the May 16, 2019 law relating to e-invoicing in the context of public procurement and concession contracts.

The 2019 law transposed the Directive 2014/55/EU, which modernized public administration in Europe by providing interoperable standards for EU economic operators using electronic invoices.

2. Electronic invoicing reduces operating cost

E-invoicing leads to cost savings in many of the steps in invoice processing.

For example, in preparing and issuing the invoice, everything is electronic, so your savings from this process alone will include the cost of paper and printing cost.

In sending the invoice electronically, you get to save postal costs. Though there are electronic transmission costs, they are significantly lower than postal costs.

Other e-invoicing cost savings include handling costs (when sending and receiving) and the cost of archiving and storage.

3. E-invoicing makes invoice reception faster

E-invoicing automates many tasks in invoice processing, making the reception of invoices faster.

For example, you can automate the manual sorting that paper invoices require by simply using dedicated emails to receive different categories of e-invoices.

Also, the critical step of "approving the invoice" is easier and faster digitally. Paper invoicing would involve finding and searching through files to compare information in existing documents to that in invoices.

4. Electronic invoicing reduces errors

E-invoicing eliminates manual data entry, and that removes data entry errors. It also reduces human errors by automating many of the steps in invoice processing.

5. E-invoicing increases transparency and reduces fraud

E-invoicing is the direct exchange of data between two accounting systems. So, it eliminates fraud via fake invoices.

Since e-invoicing automates processes and facilitates reviews, it prevents other invoicing fraud such as duplicate invoices and inflated invoice figures.

Send compliant e-invoicing with Storecove

B2G e-invoicing will become mandatory in Luxembourg very soon. The law has passed already, giving extended timelines for companies to comply.

Large companies had until 18 May 2020 to comply, while medium companies and small companies have until 18 October 2022 and 18 March 2023, respectively.

E-invoices must be submitted and processed through the Peppol network using Peppol BIS 3.0 format.

So, to send e-invoices in Luxembourg, you need a Peppol Access Point Provider who'll connect you to the Peppol network, and ensure that your e-invoices are converted to the right format and safely sent to the recipient.

As a certified Peppol access point provider, we can help you with the following:

Connect your business to the Peppol e-invoicing network.
Convert your documents to required e-invoicing formats (Peppol BIS V3, UBL 2.1, XRechnung et cetera), ensuring that you're automatically compliant with the latest e-invoicing regulations.

You can connect to Peppol by registering here.

More information about e-invoicing in Luxembourg?

Read also:

Everything You Need To Know About E-invoicing Compliance In Luxembourg

Is e-invoicing mandatory in Luxembourg?