eInvoicing Compliance Update, January 2026

As 2026 kicks off, the most significant trend in invoicing compliance isn’t a new technical standard, but a fundamental shift in how eInvoicing compliance dates are being enforced. The deadlines for 2026 are still very much alive, but the rules of engagement are changing. We are witnessing a global divergence in how tax authorities are handling compliance – some with a softer partnership-based approach and others with a firm, uncompromising edge.

In Europe, we’re hearing a collective sigh of relief: most deadlines are holding, but penalties are being suspended as governments acknowledge infrastructure bottlenecks, business readiness, and regulatory ambition don’t always converge on schedule. Don’t get too comfortable, though. This softer approach is largely confined to the EU.

Elsewhere, enforcement is tightening rapidly, creating a real risk for multinationals who might assume this leniency applies globally. In the Middle East and Africa, for example, tax authorities are weaponizing VAT tax compliance – denying or delaying credits and disrupting business if companies fail to meet compliance requirements.

Across the globe, here’s a breakdown of the five standout eInvoicing trends from 2025 that will continue to shape financial strategies in the year ahead.  

5 eInvoicing Trends Set to Redefine Finance Strategies in 2026 

This quarterly update builds on our Q3 2025 comprehensive overview, which details the recent wave of mandate changes and deadline revisions.

1. EU Penalties Might be Suspended but You Must Prove Intent

We are seeing the emergence of “soft-landing” protocols, where mandates go live legally, but penalties are suspended for compliant-intent taxpayers.  

• Belgium’s January 1, 2026 mandate is legally active, but penalties are suspended through March 31 for taxpayers showing intent.  

• Spain delayed its entire Veri*factu system by a full year.  

• Slovenia granted a two-year reprieve. 

This trend is spreading.

Why? Because governments are learning how difficult it is to demand digital transformation by a hard-lined date. The technical complexity of integrating electronic invoicing with legacy ERP systems, training staff, and coordinating with thousands of trading partners has proven more challenging than regulators first anticipated. 

Ward Off Penalties by Proving Compliance Intent – Here’s How: Soft landings are transition enablers, not policy reversals, which means businesses must still race to be ready. However, you can now factor these relaxed rules into your project plans. The key to warding off penalties in Q1 2026 is documentation. Maintain evidence of your implementation efforts (signed contracts with service providers, project plans, testing logs). In Belgium, for example, a simple email trail with an ERP integrator discussing delays may be sufficient.

2. Hybrid Invoices are the New Standard, but Reconciliation Risks Arise

Germany (ZUGFeRD 2.3) and France (Factur-X) are cementing hybrid invoice formats as the pragmatic bridge between legacy and modern systems. These files contain both a human-readable PDF and machine-readable XML embedded within the same document.

Digital Transformation Gaps Solved: Hybrid formats solve a critical business problem: they allow humans to read the PDF (supporting manual AP processes that still exist in many organizations) while machines parse the XML (enabling automated processing and tax authority reporting). This bridges the digital transformation gap — the realities of where businesses are today and where digital mandates require them to be tomorrow.

The Hidden Reconciliation Risk: If the PDF says €100 and the XML says €1000 due to a software bug, which is the legal invoice? Germany’s answer? The BMF has indicated that the structured data (XML) takes precedence in automated processing contexts, shifting the liability to the invoice issuer to ensure data integrity between the two layers.

3. New Offline Procedures Safeguard Business Continuity – Can You Act on Them?

As mandates cover entire economies, internet outages become national risks. In countries with clearance models, where every invoice must be validated by a government platform before it’s legally valid, connectivity becomes as critical as electricity.

Tax authorities are recognizing this systemic risk and building offline contingency mechanisms into their platforms. Poland’s Offline 24 mode and Saudi Arabia’s local cryptographic storage are critical architectural requirements, not just features.

How to Avoid Disruptions During Outages: ERP systems must be able to locally generate a valid XML, apply a cryptographic seal (or QR code), and store the invoice in a pending queue for auto-transmission once connectivity is restored.

4. The UK Re-Enters the Global eInvoicing Compliance

After years of silence following Brexit, the United Kingdom announced mandatory eInvoicing for all B2B and B2G VAT transactions starting April 1, 2029. The model: decentralized 4-corner architecture, likely using Peppol, with tax reporting via API.

The UK’s return signals that eInvoicing has become a global standard, not just an EU or Latin American phenomenon. With major Commonwealth trading partners watching UK developments closely, this could accelerate adoption in markets like Canada, Australia, New Zealand, and the U.S. The UK’s choice of a decentralized model also validates the Peppol network as a viable alternative to government-controlled platforms.

Start Planning Now: The 2029 timeline provides substantial preparation time, but companies with UK operations should begin planning now.

5. High Stakes in the MEA: VAT Deductibility as an Enforcement Tool

Conversely, a more aggressive enforcement trend is solidifying in the Middle East and Africa, where authorities are tightening enforcement by making VAT tax credit eligibility dependent on meeting stringent compliance and documentation rules.

Some argue tax authorities are weaponizing VAT tax compliance. By technically restricting the ability to claim tax credits to only those invoices validated through central government servers, nations like Zambia, Kenya, and Israel are effectively deputizing private enterprises to police the compliance of their suppliers. If suppliers fail to eInvoice, buyers pay the penalty by losing their tax deductions.

Moreover, non-compliance no longer just triggers fines but creates business continuity threats: 

• Indonesia can deactivate eInvoicing access, stopping the shipment of goods.  

• Israel prohibits VAT deductions on non-compliant invoices, a move that results in what some estimate as a +40% financial hit to local businesses.  

• Kenya automatically rejects expense claims lacking eTIMS data.

Action Required: In these jurisdictions, VAT tax compliances comes with multiple layers of financial risks (fines and business continuity). 100% compliance is mandatory. 

What the Changes Mean for Your 2026 Planning

If You Acted After Our Q3 Update: The Q4 2025 delays and soft landings provide breathing room but don’t eliminate urgency. Use these grace periods to perfect implementation, not to delay project starts. The enforcement direction is clear: soft landings are temporary accommodations as governments work through technical challenges, not permanent policy reversals.

If You Haven’t Started Yet: Belgium’s penalty suspension and Spain’s delay might feel like reprieves, but treat them as final warnings, not extensions. The pattern across all regions is consistent: mandates are happening; timelines may flex slightly, but the fundamental requirement isn’t changing.

The Optimal Compliance Posture for 2026:

• Defensive: Ensure technical readiness for countries with active mandates, even those with suspended penalties. Having a “we’re working on it” defense requires actual evidence of work. 

• Strategic: Consider implementing hybrid invoice formats now to future-proof your systems. Even if not required in your jurisdiction today, they’re becoming the global standard. 

• Proactive: Build offline safeguards before they’re tested in production. Don’t wait for an outage to discover your system can’t queue invoices locally. 

Billtrust is Here to Make Digital Invoicing Easy All Over the Globe

Billtrust has been at the forefront of global eInvoicing for more than two decades. We monitor shifting regulations and support clients with eInvoicing solutions purpose-built for compliance across many countries. Whether it’s determining which mandates apply to you or how to start building your compliance strategy, you’ll find trusted answers and insights in Billtrust’s resource library here:

• 2025 Global eInvoicing Compliance Guide  

• Interactive map shows you the government mandates across the globe  

• U.S. ePayments preparedness guide 

A Deep Dive into eInvoicing Compliance in Europe

Belgium: Limited Grace Period

Just weeks before the deadline, the Belgian tax administration acknowledged that many businesses were not ready and issued a last-minute reprieve. While the mandate technically began on January 1, 2026, no fines will be issued for non-compliance through March 31, 2026, provided taxpayers can demonstrate reasonable efforts to comply. This could include signed contracts with service providers, project plans, or logs of technical testing.

Why It Matters: Belgium’s approach may become a template for other countries facing readiness challenges. It preserves the legal authority of the mandate while acknowledging practical implementation realities. This is particularly significant because Belgium chose a big bang approach (all businesses simultaneously) rather than phased implementation.

Action Required: Entities operating in Belgium must immediately archive evidence of their implementation project. A simple email trail with an ERP integrator discussing delays may be sufficient to ward off penalties in Q1 2026.

Penalties (starting April 1, 2026): €1,500 first offense; €3,000 second offense; €5,000 subsequent offenses.

Germany: The Receipt Mandate

The Federal Ministry of Finance (BMF) released final guidance in November 2025 that settles crucial operational debates: 

• Email is sufficient (for now): Transmitting an XML file (XRechnung) via email remains a valid transmission method during the transition. The BMF has not yet mandated a specific transport protocol like Peppol for domestic B2B, though it is highly recommended.

• The hybrid solution: The guidance heavily favors ZUGFeRD 2.3 (a PDF with embedded XML) as the pragmatic bridge for the 2025-2027 transition. Because ZUGFeRD allows humans to read the PDF while machines process the XML, it satisfies the eInvoice definition without requiring an immediate revolution in manual AP processes.

• No refusal rights: Since 2025, buyers can no longer opt out or refuse an eInvoice. If a supplier sends an XRechnung or ZUGFeRD file, the buyer must be able to accept it and ingest it; demanding a paper copy is no longer legally supported.

Hungary: Fundamental Model Shift Coming

The situation in Hungary has shifted dramatically. For years, Hungary relied on Real-Time Invoice Reporting (RTIR), where you send data to the tax authority (NAV) and send the actual invoice however you want. That is about to change. On December 8, 2025, the government launched a public consultation that signals the end of the current system and the move to a full eInvoicing mandate.

Key changes:

• The XML file will become the only legally valid invoice. Hybrid invoices (PDF + XML data) will no longer be compliant for B2B transactions.  

• Domestic buyers will be required to report received invoices to NAV within 5 days of receipt. This closes the loop for the eÁFA (eVAT) system, allowing NAV to auto-draft VAT returns for both the sellers and buyers. 

Spain: The Major Postponement

In the most significant delay of the quarter, Spain pushed its digital invoicing roadmap back by a full year. The Council of Ministers approved Royal Decree-Law 15/2025 on December 2, 2025, setting the new start date for the Veri*factu system to January 1, 2027 for corporate taxpayers.

The Technical Detail That Matters: The compliance countdown (1 year for large companies with >€8 million turnover, 2 years for others) only begins after the final Technical Regulation is published in the Official Gazette (BOE). This hasn’t happened yet.

Realistic Timeline:

• Large taxpayers (>€8M turnover): Late 2026 or early 2027 at the earliest

• All other taxpayers: 2028

The Parallel Track: While domestic rules are delayed, Spain released a preliminary draft law on December 1, 2025, to transpose the EU’s VAT in the Digital Age (ViDA) directive.

Action Required: Don’t halt Spanish projects. Use 2026 to focus on data quality. The Veri*factu system requires chained cryptographic hashes. If underlying master data (Customer Tax IDs, addresses) is dirty, the cryptographic chains will break.

United Kingdom: Back in the Game

Perhaps the most surprising development of Q4 2025 was the United Kingdom’s decisive reentry into the global eInvoicing narrative. On November 26, 2025, the Chancellor announced mandatory eInvoicing for all B2B and B2G VAT transactions starting April 1, 2029.

The model: The UK rejected the centralized clearance model (like Italy) in favor of a decentralized, 4-corner model. Businesses will exchange data directly via accredited service providers (likely using the Peppol network), and tax data will be reported to authorities via an API.

Next step: Technical Collaboration Groups started defining the data standard in January 2026. The goal is to agree on a “UK Core Usage Specification” (likely a subset of the Peppol BIS Billing 3.0 standard).

Other European Developments: eInvoicing Compliance

• Croatia: The Fiscalization 2.0 project is now active. Since January 1, 2026, all domestic B2B transactions between VAT-registered entities must be eInvoices.

• France: Holding firm on its September 1, 2026, deadline. The current pilot phase is testing 36 distinct use cases covering the entire invoice lifecycle — not just transmission, but payment status, rejections, and corrections.

• Poland: Poland finalized exception lists and technical infrastructure in late 2025 for the February 1, 2026, rollout (large taxpayers) and April 1, 2026 (all others). Foreign self-billing entities are exempt from KSeF. Support for attachments embedded in the XML is now confirmed.

• Portugal: The mandate to apply Qualified Electronic Signatures (QES) to PDF invoices has been pushed from January 1, 2026, to January 1, 2027. 

• Slovakia: The government formally confirmed a 5-corner Peppol-based model for the January 1, 2027, go-live, meaning you’ll likely need a third-party provider rather than direct government API integration.

• Slovenia: The government granted a 2-year delay. Mandatory B2B eInvoicing will now likely start on January 1, 2028, based on a decentralized 4-corner model.

Regional Highlights: North America

The Exchange Framework Scales Up in the U.S.

While the U.S. lacks a federal VAT mandate, the Digital Business Networks Alliance (DBNAlliance) is successfully building a Peppol-style exchange framework. DBNAlliance is a not-for-profit open exchange network that enables businesses to securely and efficiently exchange electronic invoices and documents across different systems, both within North America and internationally.

In Q4 2025, new APIs were deployed to allow service providers to onboard thousands of small businesses instantly. Support for attachments (PDFs, spreadsheets) within the XML envelope was finalized — addressing a major complaint from accounts payable teams who need backup documentation.

Why It Matters: If your U.S. business uses major service providers (like Avalara, Coupa, or Sovos), they are likely already connected to this network. You can now potentially receive structured data from their other customers without building a custom link.

FedNow and “Request for Payment”: In November 2025, the Federal Reserve announced 2025 pricing and rule changes for Request for Payment (RfP). The goal is for a supplier to send an eInvoice (via DBNAlliance) that includes a ‘Pay Now’ button via FedNow. When the buyer approves, payment settles in seconds, 24/7/365.

Actionable Advice: Ask your current EDI/AP automation provider: “Are you a member of the DBNAlliance, and can we enable the Exchange Framework?” The benefit: replacing emailed PDFs with structured data, reducing AP keying errors without the headache of government reporting.

Regional Deep Dive: Asia-Pacific

Indonesia: The Coretax Era

Throughout 2025, Indonesia allowed a transitional phase where the old e-Faktur system and the new Coretax (CTAS) system ran in parallel. Effective January 1, 2026, the Coretax portal became the primary and mandatory interface for almost all VAT-registered businesses (PKP).

How it works: Every time you issue an e-Faktur (eInvoice) to a customer, that data flows instantly into the Coretax database. When the month ends, Coretax sums all eInvoices you issued (Output VAT) and received (Input VAT) to create your return. eInvoicing is no longer just sending a bill but real-time tax filing.

The risk: The Directorate General of Taxes (DGT) can unilaterally deactivate a business’s eInvoicing access for non-compliance. Without access, you cannot generate the mandatory QR code, effectively stopping your ability to ship goods. Previously, non-compliance led to fines. Now, it leads to an operational shutdown.

Malaysia: Scope Reduction

Malaysia dropped a major update in early December, effectively redrawing the roadmap for 2026. If your annual turnover/revenue is below RM 1 million, you are now completely exempt from mandatory eInvoicing. For businesses with turnover between RM 1 million and RM 5 million, there is now a relaxation period (soft launch) from January 1 to June 30, 2026.  

Philippines: Extended Deadline

The Philippines Bureau of Internal Revenue (BIR) has issued a major relief for large taxpayers, exporters and eCommerce businesses. The deadline to comply with the EIS (Electronic Invoicing/Receipting System) has been extended from early 2026 to December 31, 2026.

Sri Lanka: Pilot Phase and Format Mandates

Sri Lanka is in the pilot phase of eInvoicing rollout. The most immediate requirement is a new mandatory tax invoice format taking effect in January 2026. In December 2025, the Cabinet approved implementation of a Web API to link business ERPs with the existing RAMIS system.

Regional Deep Dive: Middle East & Africa

Israel: Acceleration

Israel announced a major acceleration of its eInvoicing roadmap, moving aggressively to a model where the government validates your invoices in real time before issuance. The Israel Tax Authority scrapped the original 2028 timeline, compressing the rollout into six months. 

The threshold:

• As of January 1, 2026: Any B2B invoice exceeding NIS 10,000 requires real-time validation.

• By June 1, 2026: This drops to NIS 5,000.

Financial impact: If you accept a non-compliant invoice from a supplier, you lose roughly 40%+ of the value (18% VAT + ~23% Corporate Tax deduction). 

United Arab Emirates (UAE): Penalty Regime Defined

The Ministry of Finance and Federal Tax Authority have published concrete penalties for the upcoming 2027 mandate:

• Implementation failure: AED 5,000 per month for failing to implement the system by the deadline.

• Missing invoice transmission: AED 100 per invoice (capped at AED 5,000/month) for failing to transmit an invoice to the FTA.

• System failure notification: AED 1,000 per day for failing to notify the FTA when your system goes down.

Other MEA Developments:

• Kenya: The Kenya Revenue Authority transitioned to aggressive enforcement via strict Continuous Transaction Controls. Effective January 2026, automated return validation disallows expense claims lacking corresponding eTIMS data. Compliance is now a supply chain liability. If suppliers fail to eInvoice, buyers pay the penalty by losing tax deductions.

• Oman: The Oman Tax Authority published a phased roadmap for its national eInvoicing system, Fawtara. Phase 1 (top 100 large taxpayers) begins August 2026. Oman is adopting a 5-corner model (likely Peppol-based). 

• Tunisia: Tunisia is moving from a sector-specific approach (pharmaceuticals and fuel) to a broader mandate covering all service transactions.

• Zambia: Effective January 1, 2026, Input VAT claims are restricted exclusively to invoices generated via the Smart Invoice system. If you accept a manual invoice or old-style fiscal device receipt, you cannot claim the VAT back.