In recent years, Estonia has positioned itself as a leader in the digitalisation of public and private sector processes. One of the most significant advancements in this area is the adoption of electronic invoicing, which promises to streamline business operations and enhance the efficiency of public procurement. Estonia initially adopted e-invoicing in 2019 for B2G transactions, with changes coming in 2025.
An e-invoice is a digital version of a traditional invoice that is structured in a machine-readable format. Unlike a standard digital invoice (e.g., a PDF), which requires manual data entry and processing, an e-invoice is designed for automatic transfer and processing by the seller's and buyer's systems. This format ensures that invoices are transmitted seamlessly without the need for human intervention, thus reducing errors and improving the speed of transactions.
Estonia has embraced digital solutions across all sectors, and e-invoicing is a key component of this transformation. The country uses two primary e-invoicing formats: the Estonian e-invoice standard and the European e-invoice standard (Peppol):
Looking ahead, Estonia is set to further transform its e-invoicing system. As from 1 July 2025, changes to the Estonian Accounting Act will replace the current mandatory e-invoice submission for public sector transactions with a new system based on the buyer’s choice, which will apply to both B2B and B2G transactions. Under this new principle, buyers will have the right to decide how they want to receive invoices—whether in the traditional paper format (e.g., PDF) or as an e-invoice. The right to request an e-invoice from the seller for the payment of goods or services will be available to all entities that are publicly registered as e-invoice recipients in the Estonian e-business register. These registered companies will also be required to issue e-invoices for transactions involving goods or services.
Jelizaveta Mišina
BDO in Estonia
An e-invoice is a digital version of a traditional invoice that is structured in a machine-readable format. Unlike a standard digital invoice (e.g., a PDF), which requires manual data entry and processing, an e-invoice is designed for automatic transfer and processing by the seller's and buyer's systems. This format ensures that invoices are transmitted seamlessly without the need for human intervention, thus reducing errors and improving the speed of transactions.
Role of E-Invoices in Estonia
Estonia has embraced digital solutions across all sectors, and e-invoicing is a key component of this transformation. The country uses two primary e-invoicing formats: the Estonian e-invoice standard and the European e-invoice standard (Peppol):
- Estonian E-Invoice Standard: Introduced before the European Peppol standard, the Estonian e-invoice format has become the more widely adopted system in the country. This national standard allows Estonian businesses to easily integrate e-invoicing into their operations, ensuring smooth and efficient transactions.
- European Peppol Standard: As part of broader efforts to standardise e-invoicing across the EU, the Peppol framework allows for cross-border e-invoicing between businesses and government entities. Estonia's early adoption of e-invoicing helped lay the groundwork for this wider European initiative.
The shift in 2025: "Buyer’s choice"
Looking ahead, Estonia is set to further transform its e-invoicing system. As from 1 July 2025, changes to the Estonian Accounting Act will replace the current mandatory e-invoice submission for public sector transactions with a new system based on the buyer’s choice, which will apply to both B2B and B2G transactions. Under this new principle, buyers will have the right to decide how they want to receive invoices—whether in the traditional paper format (e.g., PDF) or as an e-invoice. The right to request an e-invoice from the seller for the payment of goods or services will be available to all entities that are publicly registered as e-invoice recipients in the Estonian e-business register. These registered companies will also be required to issue e-invoices for transactions involving goods or services.Jelizaveta Mišina
BDO in Estonia