RegionsAsia PacificThe PEPPOL Network: On the highway to Asian and Trans-Tasman markets

The PEPPOL Network: On the highway to Asian and Trans-Tasman markets

Comarch E-Invoicing's compliance expert, Anna Bawól explains why the PEPPOL Network is crucial in solving your e-invoicing needs in an increasingly diversified economic landscape.

Fulfilling legal requirements to provide an appropriate level of services is one of the greatest challenges facing today’s global enterprises. Diversified economic landscapes of individual European countries and regions of the world significantly decrease transparency and profitability when expanding business activities into new markets such as Asia, Australia and New Zealand.

In the incessant pursuit of legal compliance

Regardless of a business’ type, particular attention should be paid to the correctness of accounting processes, by which every entrepreneur is measured. The necessity to monitor legislative changes regularly and ensure continuing adjustment to new standards are inextricably linked with a company’s sustainable development and competitiveness.

Therefore, it is essential to apply the correct accounting methods and ensure that invoices are properly processed and archived, not least to avoid sleepless nights. Many difficulties associated with this arise from poor understanding of the legal requirements affecting a given transaction.

For companies operating internationally, this is further complicated when diverse tax and legal systems may apply and business partners’ portfolios make it necessary to exchange different document formats. For such companies, issuing, processing and archiving invoices should be carried out in accordance with the relevant national regulations.

E-invoicing and geographical location

Since legislation and legal culture varies across countries and regions, these differences must be considered when handling e-invoices. In many Latin American countries, for example, electronic invoicing is mandatory, whereas different rules will apply in the Middle East, where accounting documents are largely paper-based. Thus, an e-invoicing solution created for Brazil should be designed in a different way to one used in Israel.

The European Union and the development of invoicing regulations there over the past 10 years creates a particularly interesting case. Rules have been introduced to remove obstacles relating to the functioning of the internal EU market, arising from differences between Member States’ different measures regulating e-invoicing.

The most significant pieces of EU legislation in this area are Directive 2010/45/EU, which brought electronic invoices into line with their paper counterparts, and Directive 2014/55/EU, which obliges European public administrations to receive and process structured electronic invoices compliant with the new EN 16931-1:2017 standard. All of these requirements are ideally suited to the UBL standard on which the PEPPOL Network is based.

Innovative technical standardization for e-invoicing

The four-corner model of the electronic document exchange, upon which the PEPPOL Network is based, allows the transmission of documents via providers that are registered PEPPOL Access Points. The PEPPOL-based solution is becoming increasingly popular, not just with European Union countries but with others too.

Leading APEC economies have been inspired by the successful implementation of PEPPOL in Singapore, one of the four Asian Tigers. Special attention has been paid to Singapore’s “entry gate” for European businesses, helping them to stay in line with invoicing regulations outside the EU without unnecessary process modifications or significant financial outlays.

With Singapore leading the way, and others in the region (such as Malaysia) following, business prospects on the Asian market are improving significantly. The same trend may nevertheless be observed in other parts of the world.

The USA and Canada have already declared the development of PEPPOL-based e-invoicing, and over the past few weeks, national PEPPOL authorities have been established in New Zealand and Australia. This greatly simplifies matters for European entrepreneurs seeking to expand their businesses into these markets.

Thus, PEPPOL could shift from being a well-known but EU-focused concept to the main standardized e-invoicing solution globally. It should therefore be considered when designing international accounting solution.

What are the benefits of PEPPOL for European entrepreneurs?

PEPPOL is used in the vast majority of cases to send electronic invoices to public administration entities. Moreover, EU Member States are currently focusing on creating and adjusting legal frameworks to align with technological initiatives in accounting processes.

This is clear in several countries, in which B2G e-invoicing rules are already very strict, and failure to comply may result in the inability to participate in public procurement processes, as in the case of Austria or Italy.

Therefore, adapting businesses to the individual requirements of a particular country is usually associated with a long and costly process. It is of particular importance for businesses to ensure compliance in relation to invoice format and delivery, so an e-invoicing solution that meets these demands is crucial.

Using a PEPPOL-based solution not only significantly reduces the implementation work that must be carried out in relation to e-invoicing, but also enables far-reaching savings for entrepreneurs who choose that approach. The right e-invoicing provider will be a PEPPOL Access Point that offers document exchange through the PEPPOL Network in different markets, freeing companies from the problems associated with the progressive formalization and digitization of accounting processes.

Cross-border transactions and legislative differences

Although it operates in line with the universal UBL standard, PEPPOL must be compliant with specific national requirements, too. While the UBL BIS 3.0 standard complies with the European standard EN 16931-1:2017, each country may require further information on each invoice and introduce these additional business data as national CIUS.

Unlike other e-invoicing solutions, the PEPPOL network does allow for the correct application of national requirements and, thereby, the proper invoice processing in various legal environments with relatively little financial outlays.

So, when seeking a professional e-invoicing solution provider, businesses would do well to choose a partner with experience in this field who will take responsibility for the correct application of the appropriate technical measures.

Anna Bawól is a compliance expert at Comarch E-Invoicing. With Master’s degrees in Law and Philology, her professional research is focused on international and constitutional law. Anna is responsible for legal compliance issues and legislative developments monitoring in global e-invoicing.

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