E-invoicing
How Mandatory E-Invoicing Changes in Latvia, Estonia, and Poland Will Affect Lithuanian Businesses
Starting January 1, 2025, all invoices sent to public institutions in Latvia must be submitted in electronic format (XML). This means that all business-to-government (B2G) transactions have gone digital. Moreover, e-invoicing will soon become mandatory for business-to-business (B2B) transactions in Latvia as well. Estonia and Poland are also moving in the same direction, aiming to increase VAT collection, transparency, and faster invoice processing.
What’s Changing in Latvia, Estonia, and Poland?
Latvia. Since the beginning of this year, all transactions with Latvian public institutions must use only electronic invoices (XML), which are submitted via the “e-adrese” system. Starting in 2027, all Latvian businesses will be required to exchange e-invoices when providing goods and services to other businesses.
Estonia. While B2G e-invoices have been in use for years, starting in July of this year, B2B transactions will also require e-invoices if either party requests it. The Estonian government is preparing legislation that will make e-invoicing mandatory for all VAT payers from 2027.
Poland. Beginning in 2026, the requirement to use e-invoices for both B2G and B2B transactions will be introduced gradually, depending on a company’s turnover and invoice volumes.
What’s the Situation in Lithuania?
Lithuania was one of the first countries in Europe to adopt electronic invoicing for public procurement. Since last year, this process has been handled via the new SABIS system. However, there has been no public communication about mandatory e-invoicing for B2B transactions.
According to Audrius Kirklys, Managing Director of Unifiedpost Lithuania, neighboring countries are not waiting for EU mandates - they are proactively implementing B2B e-invoicing to improve market transparency and tax collection. Every transaction is instantly visible to institutions, unlike in Lithuania, where the current i.SAF model is used. This is especially relevant as Lithuania has the fourth-largest VAT gap in the EU.
Meanwhile, at the EU level, changes are also on the horizon. The European Commission’s “ViDA” (VAT in the Digital Age) directive aims to modernize VAT administration and proposes gradually introducing mandatory e-invoicing for cross-border B2B transactions. Therefore, Lithuanian businesses working with foreign partners must be ready to work with e-invoices.
How Will This Affect Lithuanian Businesses?
Lithuanian companies will not be required to send B2B e-invoices domestically. However, if a foreign partner requests it, they will have to comply with the required format to meet the partner’s expectations and integrate into their established invoicing process. Therefore, when doing business internationally, it’s recommended to have solutions in place that allow for easy e-invoice submission.
Lithuanian companies may face:
Partner requirements. Businesses working with foreign partners will no longer be able to use PDF invoices – adapting to electronic invoice exchange systems will be necessary. This trend has long been visible in the Nordics.
Regulatory changes. Lithuanian authorities may follow the example of neighboring countries in pursuit of greater transparency and more efficient VAT collection. Moreover, the EU’s “ViDA” directive outlines a clear direction – e-invoicing will become standard practice.
How to Prepare for These Changes?
Lithuanian businesses with ties to countries where e-invoicing is already mandatory—or soon will be—are advised to invest in digital solutions. This will help not only with legal compliance but also streamline invoice management.
Banqup, an invoicing platform for small and medium-sized businesses, allows sending e-invoices to Peppol (European network), SABIS (Lithuania), “e-adrese” (Latvia), the Estonian network, and soon – Poland’s KsEF system. Banqup generates XML/UBL invoices that can also be sent via email. A free trial is available.
For larger enterprises aiming to automate their invoicing processes, more advanced solutions are available:
Euroconnector. A data exchange tool managed via API, designed for sending invoices through the Peppol network. When integrated with a company’s accounting system, it allows not only invoice sending with delivery status tracking and messaging but also automated receipt of e-invoices from business partners.
Unifiedpost offers comprehensive solutions integrated into both Peppol and local systems, ensuring correct e-invoice creation and conversion into compliant formats that meet European standards.
Avoiding e-invoicing will not be an option – both the EU and local governments will encourage its adoption. Moreover, more companies will choose e-invoicing for its efficiency. That’s why it’s worth preparing for these changes now. If you want to learn more about e-invoicing solutions, get in touch with us.
