Belgium is gradually moving toward a fully digitized invoicing system, which aims to streamline business operations, improve transparency, and reduce administrative burdens. This process has evolved over time, transitioning from a voluntary system to mandatory e-invoicing for certain transactions, with the eventual goal of mandating e-invoicing across all business sectors.
In the next phase the Belgian government will enforce electronic invoicing for all business-to-business (B2B) starting from January 1, 2026. Consequently, traditional paper or PDF invoices will no longer be permitted, and businesses are obliged to switch to structured e-invoices through a digital platform. It’s important to note that under structured electronic form is meant automatically and electronically to be compliant.
Who must comply with Belgium´s e-Invoicing mandate?
The e-Invoicing requirement applies to all companies with a Belgian establishment and a VAT number, including small businesses (if annual revenue is lower than 25.000 euros, VAT excl.) and farms. However, it does not apply to:
- Foreign companies without a Belgian establishment
- VAT-exempt sectors according to article 44 of the Belgian VAT code (e.g., finance, education)
- Bankrupt companies
- Companies using a flat-rate VAT system according to article 56 of the Belgian VAT code (until 2028)
Peppol and the 4-corner-model vs. 5-corner-model
Peppol as a standard for Belgian e-Invoicing:
Belgium has adopted the Pan-European Public Procurement Online (Peppol) framework as its preferred method for e-Invoicing. Peppol is a secured network for the exchange of e-invoices and business documents, designed to ensure standardization and streamline the process across borders. It facilitates interoperability between different countries, allowing businesses to send invoices more efficiently.
Originally developed as a European Union standard, Peppol has gained traction beyond Europe, with countries like Singapore, Canada, and the USA also implementing it.
To streamline the implementation and improve efficiency of electronic collaboration in the billing process, PEPPOL has created a standard formatting called PEPPOL BIS 3.0 which is compliant with the European standard (EN 169319).
For additional information on the functionality of Peppol and guidance on how businesses can connect to this network, please visit our dedicated blog post on Peppol.
4 corner vs. 5 corner
Belgium employs a four-corner model for its e-invoicing system, wherein suppliers transmit structured invoices directly to other businesses through the Peppol Network. This framework involves multiple stakeholders—primarily the vendor, the recipient, and two service providers (one for the sender and one for the receiver)—that facilitate the secure and efficient exchange of invoicing data.
While e-Invoicing becomes mandatory for B2B in 2026, there is no obligation yet for direct government reporting. Following the latest news and Arizona-deal (Federal Coalition Agreement 2025-2029), this might change in the future as Belgium aims to a transition to the 5-corner model in 2028, introducing a near Realtime e-Reporting.
In the 5 -corner model or alternatively called Peppol CTC, the orginally 4 corner model will be expanded with a central fiscal platform. This means vendors will not only be able to send invoices to other businesses but also to the government in real time. This model might close or reducing the current VAT gap and will in the long run also decrease the administrative burden of companies by replacing the annual customer listing report. Along with France and UAE, Belgium would be a pioneer starting to use this model. It is most likely other countries will follow the example in the near future.
The financial benefits of implementing e-Invoicing
To encourage businesses to adopt e-Invoicing, the Belgian government has introduced several tax incentives:
- Increased Investment Deduction: Starting January 1, 2025, companies investing in digital invoicing solutions can benefit from a 20% investment deduction.
- Improved Tax Deduction for SMEs and Self-Employed Professionals: Between 2024 and 2027, small businesses and self-employed individuals using subscription-based invoicing software can apply a 120% tax deduction.
The risks of non-compliance with e-Invoicing regulations
Failing to comply with Belgium’s mandatory e-invoicing requirements could have serious financial and operational consequences, including:
- Financial Penalties: Businesses issuing non-compliant invoices may face fines.
- VAT Recovery Issues: Customers may struggle to reclaim VAT if invoices do not meet the required standards.
- Payment Delays or Non-Payment: Incorrect invoices could lead to payment refusals, negatively impacting cash flow.
Is there an SAP DRC solution available?
As businesses could already opt today for the voluntary e-invoicing, there is a solution in SAP as part of its SAP Document and Reporting Compliance, Cloud Edition license (see also SAP Document & Reporting Compliance). Once specifics of the mandatory systems are released, the solution will be adjusted accordingly to ensure it meets all required standards and aligns with any new regulations. It is important to emphasize that this matter is not exclusively limited to Belgium, SAP DRC is an integrated solution that strives for long-term end-to-end compliance with various country-specific legal requirements all over the world.
Why choose PIKON as your partner in your Compliance Project?
Here at PIKON, we combine SAP expertise with in-depth knowledge of the (upcoming) legal requirements. With our extensive experience from numerous projects, we are dedicated to supporting you every step of the way as you navigate both current and future changes. We are there help you and your team with a strategic roadmap to digital transformation and compliance with country-specific legal requirements. Read more about our service for E-Invoicing and Tax Reporting.
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If you have any questions, or if you would like to discuss how PIKON can help you with your business case, do not hesitate to leave a comment below or to request a web-meeting. I am happy to help you!
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