Changes to e-invoicing in Estonia from July 1, 2025: What to expect?

A new amendment to Estonia’s Accounting Act concerning the use of e-invoices will come into effect on July 1, 2025. According to Telema experts, this change will not bring any fundamental shifts to the current e-invoicing system.

Changes in e-invoice format

The first textual change concerns the format of e-invoices. The current version of the law mandates one of two formats: either the Estonian e-invoice standard or the European Union EN16931 standard. In the updated version, only the EN16931 format is mentioned by name, but the law still allows for the use of other standards:

“An e-invoice is deemed to be properly formatted if it complies with the European e-invoicing standard EN 16931-1. The parties may agree to use another relevant standard.”

This means that the Estonian e-invoice standard can still be used, and the amendment does not have a substantive impact. Most companies will continue to use e-invoice operators as their role is to ensure that data from the client’s software is converted into a suitable e-document for the recipient. This legal change also has no impact on the operators.

Changes to mandatory e-invoice requirements

The more significant change is done to the requirement to send e-invoices. Since 2019, B2G (business-to-government) e-invoicing has been mandatory in Estonia. The 2025 amendment removes this obligation and replaces it with the right to request e-invoices from one’s business partners.

This decision has raised eyebrows both in Estonia and across Europe, as the majority of EU countries are actually moving in the opposite direction. The EU has approved the ViDA (VAT in the Digital Age) regulation, which will make cross-border e-invoicing mandatory across the EU by 2030 at the latest. ViDA aims to increase tax revenue and reduce fraud.

Current state of e-invoicing in Europe

In most EU member states, B2G or business-to-government e-invoicing is mandatory. Additionally, many countries have now also made B2B (business-to-business) e-invoicing mandatory. The first one was Italy, introducing mandatory B2B e-invoicing already in 2019. Our neighbor Latvia has proposed mandatory B2B e-invoicing starting January 1, 2026. Germany plans to implement it from January 1, 2027, and there are many other similar examples.

In this context, Estonia’s move appears both puzzling and disappointing. Many studies have shown that, in addition to improved tax collection, adopting e-invoicing helps save time and money and increases business efficiency. By lagging in this development, Estonia may miss the chance to gain a competitive edge over countries that are actively investing in digitalization and innovation. In the long run, this could limit the international competitiveness and economic growth of Estonian companies.

Conclusion for Telema clients

For Telema clients, it’s reassuring to know that they do not need to make any updates to their accounting software as of July 1, 2025. E-invoices will continue to be sent and received exactly as before.

Even before the legislative change, your clients had the right to request e-invoices from you, and you likely honored that request as part of maintaining a strong customer relationship. Whether the addition of this right into law will increase the use of e-invoices in Estonia is questionable. However, the removal of the B2G mandate could hinder the broader adoption of e-invoicing.

The best argument for adopting e-invoicing: It’s beneficial!

Despite the legal changes, there is still reason for optimism. When businesses understand that e-invoices are not just a legal requirement but provide tangible business benefits—such as faster payment collection, lower manual processing costs, and fewer errors—they will adopt them voluntarily. Many Estonian companies have already done so and see e-invoicing as a way to improve operational efficiency.

Thus, even though regulations may shift, digitalization and increased efficiency remain inevitable trends. Companies that invest in this early will enjoy faster adaptability and a stronger competitive advantage in the future.