Luxembourg is shaking up the invoicing process by making B2G e-invoicing mandatory for medium-sized companies. Starting on October 18, 2022, medium-sized companies in Luxembourg will be required to issue invoices electronically through PEPPOL.
The new regulation, published in Luxembourg’s Official Journal, is designed to make it easier for businesses to comply with value-added tax (VAT) regulations and improve cash flow.
While the change may present some initial challenges for companies, the long-term benefits are expected to be significant. As technology advances, it's becoming increasingly easy for businesses of all sizes to go digital. So what does this mean for your company in Luxembourg?
In this article, we'll look at how B2G invoicing will work in Luxembourg and what it means for your business.
When will B2G e-invoicing be obligatory in Luxembourg?
The new law, published in Luxembourg’s Official Journal on December 14, 2021, made it mandatory for businesses involved in public contracts to issue invoices electronically to the government.
The law entered into force on December 18, 2021, where the phased approach was divided for businesses according to size.
The law stipulates that large businesses, or those with an average number of more than 250 employees and a turnover of more than €40 million, must comply with the new regulation as of May 18, 2022.
Businesses with an average number of between 50 and 249 employees and a turnover of €8.8 million to €40 million will have to use the B2G e-invoicing system as of October 18, 2022.
The last category, small businesses with an average number of fewer than 50 employees and a turnover of less than €8.8 million have until March 18, 2023, to implement the changes.
Luxembourg e-invoicing format and platform
The following are the formats that you can use for e-invoicing in Luxembourg:
B2G businesses will also be able to use any invoice format compatible with the UBL 2.1 standard, as long as it meets the European Commission’s Directive 2014/55/EU requirements.
The UBL 2.1 standard is a widely used e-invoicing format designed to facilitate the exchange of information between businesses and government agencies. It is also a format that the European Union recognizes.
PEPPOL BIS Billing 3.0
In addition to the UBL 2.1 format, businesses will also be able to use the PEPPOL BIS Billing 3.0 format for e-invoicing in Luxembourg.
PEPPOL (Pan-European Public Procurement Online) is a set of standards and infrastructure designed to facilitate the exchange of electronic documents between businesses and government agencies.
The PEPPOL BIS Billing 3.0 format is the most recent version of the PEPPOL e-invoicing standard. It is based on the UBL 2.1 standard and has been designed to improve the interoperability of e-invoicing systems.
Peppol access point providers like Storecove allow businesses to send and receive invoices in the PEPPOL BIS Billing 3.0 format. The invoices are then routed through the PEPPOL network to the correct destination.
Luxembourg e-invoicing platform
You can send electronic invoices in Luxembourg using a Peppol access point provider to any public body connected to the PEPPOL network.
The PEPPOL network is a pan-European infrastructure that connects businesses and government agencies in different countries. It is based on the PEPPOL e-invoicing standards and allows companies to send and receive electronic invoices in a format compatible with their accounting software.
How will B2G e-invoicing work in Luxembourg?
Luxembourg's B2G e-invoicing system is based on the European Union’s Directive 2014/55/EU. The directive requires that businesses use a standard format for invoices, such as the UBL 2.1 or PEPPOL BIS Billing 3.0 formats, and that they be sent electronically to the government.
You will need to register with a Peppol access point provider to send electronic invoices in Luxembourg. The provider will give you a digital certificate that you will use to sign your invoices. You will also need to have a valid VAT number.
The Peppol access point provider will route your invoices through the PEPPOL network to the correct destination. The invoices will be delivered to the government in the standard format, and they will be able to be processed by the accounting software.
Storecove is a Peppol access point provider that can help you with:
- Converting your invoices to the UBL 2.1 or PEPPOL BIS Billing 3.0 format. This allows you to send invoices in a format compatible with the B2G e-invoicing system.
- Connecting to the PEPPOL network. This allows you to send invoices electronically to the government.
A Peppol access point provider uses a four-corner model to connect businesses and government agencies. This means the provider has a connection to the PEPPOL network, allowing them to route invoices to the correct destination.
The model is called “four-corner” because it consists of four parts:
1. Invoice sender: The business that sends the invoice
2. Invoice receiver: The government agency that receives the invoice
3. Peppol access point provider: The company that connects the sender and receiver
4. PEPPOL network: The infrastructure that routes the invoice from the sender to the receiver
The four-corner model is the most common way to connect to the PEPPOL network. It is used by businesses and government agencies in different countries.
Characteristics of the electronic invoice in Luxembourg
Electronic invoices sent to the government in Luxembourg must have the following characteristics:
They must be in the UBL 2.1 or PEPPOL BIS Billing 3.0 format. This format, based on the XML standard, has been designed to improve the interoperability of e-invoicing systems.
They must be signed with a digital certificate. This certificate is used to verify the sender's identity and the authenticity of the invoice.
Most archiving periods in Europe range from 3 to 10 years. In Luxembourg, businesses must keep invoices for 10 years. Archiving is required by law and is necessary in case of an audit.
Sending an invoice to the government in Luxembourg requires the following details:
- Name, address, and VAT number of the sender
- Name, address, and VAT number of the receiver
- Date of issuance
- Date of supply
- Description of the goods or services supplied
- Quantity of goods or services supplied
- Unit price of the goods or services
- Total amount of the invoice, including VAT
- VAT rate
- Payment terms
- Invoice number
E-invoicing is becoming mandatory in Luxembourg for all businesses, regardless of size. All companies must use a standard format for invoices, such as the UBL 2.1 or PEPPOL BIS Billing 3.0 format, and send them electronically to the government.
Businesses must register with a Peppol access point provider, such as Storecove, to send government-compliant invoices. Storecove can help companies convert invoices to the correct format and connect to the PEPPOL network.
Complying with the e-invoicing mandate will be mandatory for all businesses in Luxembourg, but it will also help companies save time and money.
Access point providers, like Storecove, can help businesses transition to e-invoicing. Our competent team can provide you with all the support and information needed to make the switch.
Get in touch with us today to schedule a demo with Christian Land, one of our electronic invoicing experts.
More information about B2G invoicing in Luxembourg?