Estonian E-invoicing Changes – 1 July 2025

As in many other European countries, the Estonian government is looking to gradually extend the use of e-invoicing. Although the use of structured e-invoices is only mandatory for business to government transactions at the moment, businesses are encouraged to make the shift from paper or pdf invoices. As part of this strategy, the Estonian Finance Ministry has changed the domestic regulatory framework. The amendment will come into force from the 1st July 2025 introducing the right to request e-invoices by businesses who are registered as e-invoicing recipients in the Estonian Commercial Register.

The Estonian model seems to follow a less centralised, regulated approach compared to other European countries such as Romania. Businesses opting to use e-invoices are free to use PEPPOL or other reliable access point suppliers.

Please see our brief overview of the changes coming into force from 1st July 2025.

What are the changes?

The Estonian government introduced The Accounting Amendment Act. Following the approval of the bill by the Parliament, e-invoicing will become optionally required. Taxpayers will have the right to opt to become e-invoicing recipients in the Estonian Commercial Register. In case a business is registered as such, it will become mandatory for their suppliers to issue structured e-invoices.

What structured e-invoicing formats will be accepted?

The default e-Invoice format will be the EU EN16931 standard. At present, businesses are allowed to use either an Estonian or the EU standard. However, going forward, and in line with other EU countries in order to reduce the fragmentation and reach the goal of uniformization across the EU, Estonia is moving forward towards the EU standard

Who is affected?

Any business can be affected if their customer opts to register in the Estonian Commercial Register as e-invoice recipients. The amendment does not differentiate between Estonian or foreign suppliers. As long as their customer requests it, they have to be prepared to issue e-invoices to their customers regardless of the fact where the supplier is established.

How to issue e-invoices to an Estonian business?

The company which is obliged to issue the invoice should consider the next steps:

Check If the Estonian business is listed as an e-invoice recipient in the Commercial Register.

Ensure the e-invoice format is either EU EN16931 or as agreed with the customer.

Utilize an accounting software or ERP system which could generate an e-invoice in the required format.

Ensure the e-invoice is sent through the specified channels which may involve direct exchange or via commercial agents such as the Peppol network.

Anyone issuing e-invoices should also consider that the information included in any such invoice should be compliant with Estonian invoicing requirements.

How does the invoicing and filing process change for invoices received from an Estonian business?

Estonian or non-Estonian companies that have B2B transactions with Estonian businesses must use accounting systems that are able to receive and process e-invoices in the EU EN16931 or agreed-upon format. The accounting system should allow the e-invoices to be restored that are compliant with local VAT regulations.

In order to support businesses, a government agency offers a free and automated accounting software (eFinancials) helping entrepreneurs  to organise their accounting and allowing them to generate e-invoices.

There are no other significant changes announced to the filing process, however we would expect that as with other countries, Estonia will move towards real time reporting based on e-invoicing.

Are there any penalties for non-compliance?

At the moment there is no specific guidance on penalties for non-compliance during this initial period.  However, companies that fail to comply with the requirements could face standard penalties and additional challenges.

Are there further upcoming changes in Estonia regarding e-invoicing?

After the acceptance of the European Union`s VAT in the Digital Age package, we would expect changes in the e-invoicing regulations to accelerate across EU countries. As part of these changes the Estonian government recently provided an update that they intend to roll out mandatory e-invoicing for domestic B2B transactions from 1st June 2027.

In case you require further information or support on e-invoicing solutions in Estonia or other countries please reach out to us. Our team of experts would be happy to provide assistance and discuss technical solutions with you.

For more information please get in touch with our team of experts on:

contact@essentiaglobalservices.com 🙂

Team Essentia.