Advanced e-invoice regulations were introduced in Switzerland in 2020 to increase the efficiency and security of the process. These regulations mandate suppliers to send B2G e-invoices to the Swiss Federal Tax Administration (FTA) in a specific format and with a qualified electronic signature.
E-invoicing is gaining popularity globally as a transparent, easy, and convenient method to handle B2B, B2G, and B2C transactions. Several countries have issued mandates regarding using e-invoices to make the process uniform and simple for suppliers.
Although e-invoicing has a short history in Switzerland, it has gained popularity recently as more businesses have adopted digital processes.
The Swiss Federal Tax Administration (FTA) was key in promoting e-invoicing by launching a secure platform to exchange invoices between suppliers and public authorities in 2020.
Before this platform was launched, e-invoicing in Switzerland was largely used voluntarily, and the country used a hybrid invoice format.
However, with the introduction of advanced e-invoicing regulations, electronic invoicing became mandatory for all suppliers.
The regulations require all invoices to be submitted online to the FTA in a specific format and with a qualified electronic signature.
In this article, we will talk about the advanced e-invoice regulations in the country and their impact on businesses.
Is B2G e-invoicing mandatory in Switzerland?
The implementation of e-invoicing in Switzerland is part of the country's ongoing efforts to digitize its economy and make business processes more efficient, secure, and environmentally friendly.
The new regulations have been well-received by businesses, and e-invoicing has become a widely used method for exchanging invoices in the country.
Business-to-government (B2G) invoicing is mandatory for all organizations in Switzerland, regardless of their contract value or the sector of operation.
The regulations were introduced in 2020 by the Swiss Federal Tax Administration (FTA) to increase efficiency and security in invoice handling processes between businesses and public authorities.
The new regulations aim to reduce costs, minimize errors and decrease the risk of fraud. The federal administration aims to improve transparency in invoicing with the new regulations.
Under these regulations, all invoices must be issued electronically to the FTA in a specific format and with a qualified electronic signature. It ensures the authenticity and confidentiality of invoices and reduces the risk of fraud and loss of sensitive information.
The FTA provides a secure platform for the exchange of invoices, which eliminates the need for printing, mailing, and manual processing of invoices.
Are B2B and B2C e-invoicing mandatory in Switzerland?
While the new advanced e-Invoice regulations mandate e-invoicing for B2G transactions, Business-to-Business (B2B) and Business-to-Consumer (B2C) invoicing are not mandatory in Switzerland. That said, the government officially recommends e-invoices to increase efficiency and reduce costs in invoicing processes.
Although the advanced invoicing regulations introduced by the Swiss Federal Tax Administration (FTA) in 2020 only apply to Business-to-Government (B2G) invoicing, B2B and B2C electronic invoices are becoming increasingly popular in the country.
The hybrid invoice format
In Switzerland, hybrid e-invoices are electronic invoices sent via email but still require manual processing. They typically consist of a PDF invoice attached to an email and sent to the recipient.
Unlike fully electronic invoices, which are processed automatically by the recipient's accounting system, hybrid e-invoices require manual intervention to extract the relevant information from the PDF and enter it into the accounting system. This can be time-consuming and introduce errors or delays in the payment process.
Hybrid e-invoices are often used by small and medium-sized enterprises (SMEs) that do not have the resources to implement fully electronic invoicing systems. However, they are not as efficient or cost-effective as fully electronic invoicing solutions, which can help businesses save time and money by automating the invoicing process.
To encourage the adoption of fully electronic invoicing, the Swiss government has introduced several measures, including a legal framework for electronic invoicing and financial incentives for businesses that switch to fully electronic invoicing. However, using hybrid e-invoices is still common in Switzerland, particularly among SMEs.
Benefits of electronic invoicing
The entrepreneur sector of the country embraces B2G invoicing with open arms. The new regulations have several advantages, including the following:
Allows for faster processing and payment of invoices
One of the biggest problems with manual invoicing is that it is time-consuming and can take several person-hours. Internet-based invoicing enables faster processing and payment of invoices, reducing the time it takes for a business to receive payment.
With these new regulations in place, Switzerland's government aims to improve the ease of business in the country.
Eliminates the risk of manual errors
Manual errors are the biggest contributors to invoicing errors resulting in the loss of billions of dollars. Web-based invoicing eliminates the risk of manual errors, such as typos and the transposition of numbers, that can occur when invoices are processed manually.
It can translate to better profitability for businesses and improvement of their bottom line.
Offers real-time tracking and reporting
Keeping track of manual invoices can be a nightmare for a large company. However, e-invoicing offers real-time tracking and reporting, enabling businesses to have a better overview of their invoicing processes.
It helps to improve accuracy and reduces the need for manual reconciliation of invoices.
Contributes to the country’s sustainability efforts
Switzerland's government is planning a big push toward improving the sustainable use of resources, and invoicing has a special place in the plan. Online invoicing in Switzerland can reduce paper use and contribute to a more sustainable environment.
It also provides the invoicing party with cost savings, eliminating the need for printing, mailing, and manual processing of invoices.
How to send e-invoices in Switzerland?
Step 1: Choose an e-invoicing solution
The first step in sending e-invoices in Switzerland is to choose an e-invoicing solution that meets your business needs. Many e-invoicing solutions are available in Switzerland, including software packages and online invoicing platforms.
When choosing an e-invoicing solution, you should consider the following factors:
- The cost of the solution
- The ease of use of the solution
- The level of support provided by the vendor
- The level of security provided by the solution
Storecove offers an easy-to-use e-invoicing solution for Switzerland.
Step 2: Register for an E-Invoicing Service Provider
To send e-invoices in Switzerland, you must register with an E-Invoicing Service Provider (ESP). ESPs are third-party companies that provide e-invoicing services to businesses.
When choosing an ESP, you should ensure the provider has a valid FTA number registered with the Swiss Federal Tax Administration (FTA). This is important because only registered ESPs can transmit electronic invoices to the FTA.
Please speak with a tax expert today to learn how we can help you with e-invoices in Switzerland.
Step 3: Create your e-invoice
Once you have chosen an e-invoicing solution and registered with an ESP, you can create your e-invoice. Most e-invoicing solutions allow you to create invoices directly within the software.
When creating your e-invoice, you should ensure that it includes all the required information, such as the invoice date, the invoice number, the amount due, and the payment terms. You should also include your business details, including your company name, address, and VAT number.
Step 4: Send your e-invoice
When your e-invoice is ready, you can send it to your customer. Most e-invoicing solutions allow you to send invoices directly from the software by email or using a secure online portal.
If you are sending your e-invoice by email, you should ensure that it is sent from a secure email address and encrypted to ensure the security of the invoice data.
Step 5: Track your e-invoice
After you have sent your e-invoice, you should track its progress to ensure that your customer has received it and that payment is made on time. Most e-invoicing solutions allow you to track your invoices and provide real-time updates on their status.
If your e-invoice is not paid on time, you should follow up with your customer to ensure payment is made as soon as possible.
Characteristics of the electronic invoice in Switzerland
Advanced e-Invoice regulation prescribes a standard format for all B2G e-invoices sent by the FTA. Some of the characteristics of the invoices include the following.
The advanced e-invoice regulations deem that an e-invoice in Switzerland has the same legal validity as a traditional paper invoice.
E-invoices are recognized as legally binding and enforceable, provided that they meet the requirements and standards. The FTA requires that e-invoices be sent in a standard format to ensure they are legally valid.
One of the key standards for e-invoicing in Switzerland is the Swiss Implementation Guidelines for Electronic Invoicing (eCH-0095). These guidelines provide a common framework for the structure and content of electronic invoices, including the use of standard data elements and formats.
The eCH-0095 guidelines define the minimum requirements for e-invoices in Switzerland, including:
- The use of structured data elements such as invoice numbers, invoice dates, and payment terms
- The use of standard data formats such as XML, CSV, or EDI
- The inclusion of standardized information such as VAT numbers, bank account information, and delivery addresses
- The use of digital signatures or other methods to ensure the authenticity and integrity of the invoice data
The Swiss government has introduced a legal framework for electronic invoicing, which includes measures to ensure the security and authenticity of e-invoices.
The Swiss Federal Act on Electronic Data and Information (FADP) sets out rules for processing personal data, including e-invoice data. It requires businesses to implement appropriate security measures to protect against unauthorized access or disclosure of sensitive data.
One of the critical security measures for e-invoices in Switzerland is using digital signatures or other authentication methods to ensure the authenticity and integrity of invoice data.
Digital signatures are based on public-key cryptography and provide a way for businesses to verify the identity of the sender and the integrity of the invoice data.
What can businesses do to comply with Switzerland's new electronic invoicing regulations?
Switzerland has introduced new electronic invoicing regulations to promote e-invoicing and ensure that it is reliable, secure, and compliant with data protection regulations.
To comply with these regulations, businesses can take the following steps:
- Businesses should choose an electronic invoicing solution that complies with the Swiss Implementation Guidelines for Electronic Invoicing (eCH-0095). These guidelines define the minimum requirements for e-invoices in Switzerland, including using structured data elements, standard data formats, and digital signatures to ensure the authenticity and integrity of the invoice data.
- Businesses must comply with the Swiss Data Protection Act (DPA) and the General Data Protection Regulation (GDPR) to protect personal data, including e-invoice data.
- E-invoices must provide clear and concise information, including the invoicing parties' contact details, a clear description of the goods or services provided, and the total amount due.
- Businesses must ensure that e-invoices are authentic and have not been tampered with. This can be achieved through the use of digital signatures or other methods of authentication.
With the new advanced e-invoice regulation guidelines introduced in 2020, Switzerland is ushering in the age of digital governance.
Although the regulations mandate only B2G invoices to be sent electronically, the country will surely expand them to B2C and B2B transactions.
E-invoicing was popular amongst businesses in Switzerland even before the mandates, but the new rules make it easy for businesses to make the switch.
Complying with new mandates is crucial, as not meeting the criteria can incur heavy penalties. The country's tax legislation is changing rapidly, and you need an expert with experience to guide you through these times.
Storecove is a global leader in providing invoicing solutions. We can help you start our e-invoicing journey in Switzerland.
Schedule a demo with our tax expert today to learn how we can help.
More information about e-invoicing in Switzerland?