The new law on “guaranteed” electronic invoicing and the central economic system came into force on 1 August this year. For businesses it does not mean any direct change yet, but it starts opening the door for a revolution in the future. It is therefore important to monitor these changes. We've selected 9 things, you need to know about “guaranteed” e-invoicing for now, so you can evaluate the impact of the law on your business.    

1. e-Invoicing is an initiative across whole European Union

The law currently approved is only the transposition of European legislation in Slovak legislative environment. The EU adopted a directive on e-invoicing already in 2014. This was followed by several years of technical preparation and creation of standards and norms. The deadline for the transposition of e-invoicing in legislation of EU member states was 17 April 2019. The Slovak law on e-invoicing therefore comes with several months' delay after the official deadline.     

We have been following the digitization topic in the EU for a long time. We mapped the reasons for the Directive on e-invoicing and process of its implementation in our web article at the end of the last year:  https://sk.vgd.eu/aktuality/e-fakturacia-kedy-sa-faktury-stanu-skutocne-digitalnymi     

2. The “guaranteed” e-invoice will be fundamentally different from the current concept of electronic invoice 

The currently used term of the electronic form of invoice, known from the VAT Act and the Accounting Act, has so far dealt only with the form of an invoice. Paper versus electronic (e.g. PDF).    

The new e-invoicing law is already focusing on the invoice content. It introduces a structured invoice content according to the European technical standard (UBL 2.1 or UN / CEFACT). This change represents a revolutionary shift in two areas:  

1. The structured form allows direct processing in economic systems without the need for manual or automated conversion of invoice data;
2. E-invoicing will be a European standard - structured forms of invoicing have already existed to date, but they have never been united at international level.

The law highlighted this difference by using the word “guaranteed” electronic invoice. To avoid misunderstandings in the implementation of the new law. 

3. Who is obliged to receive guaranteed e-invoices and who issues them? 

1. Guaranteed e-invoices will be accepted and issued by budgetary and contributory organizations and public contracting authorities;

2. This implies the compulsory issuance of guaranteed e-invoices to suppliers of these budgetary and contributory organizations and public contracting authorities (i.e. also businesses supplying services to state organizations).   

The obligation to issue an e-invoice does not apply to transactions up to EUR 5000.

3. And also to mandatory acceptance of guaranteed e-invoices for all customers of public administration (i.e. including business entities) 

The obligation to receive an e-invoice does not apply to individuals.

Existing official business e-mailboxes (slovensko.sk) will also be used to receive guaranteed electronic invoices.

4. Guaranteed e-invoices will be in use from 2021

Under the new law, access to the new billing system will be created by the end of February 2021.

The exact terms and details of introduction are not yet known. Under the new Act, the Ministry of Finance of the Slovak Republic is obliged to issue a generally binding legal regulation specifying the scope, method of use and deadlines for the introduction of the new billing system.   

5. How it will practically operate?

The state will create a new central billing system, managed by the Ministry of Finance. The billing system will be accessible via the web.

Entities involved in e-invoicing will receive their profiles in the online billing system. For the purpose of receiving guaranteed e-invoices, this system will be linked to the existing official e-mailbox system (slovensko.sk).  

As described the e-billing system will similar to the existing system of “e-kasa”, i.e. centralized system, to which all stakeholders are connected. 

6. The guaranteed e-invoicing system will be accessible to all

The new e-invoicing system will be obligatory for doing business with the public sector in Slovak Republic.  

However, the new law has opened the way for the use of the central billing system for entities that are not legally obliged to use it, if they choose to do so and agree on it with their partners.  

The terms when and the conditions under which it will be available to regular businesses will be determined by the Ministry of Finance. The ministry announced that the participation of voluntary participants in the billing system is not expected earlier than 2 years after the new Act came into effect. It can therefore be assumed that the opening of the system could take place in the summer of 2021.    

7. A major shift in the digitization of public administration 

In addition to the introduction of guaranteed e-invoicing, the new law has also brought a significant shift in the digitization of public administration. 

The Act envisages the introduction of a central economic system of public administration. The system will be managed by the Ministry of Finance.

In addition to the aforementioned billing system, this system will also serve for bookkeeping, reporting, asset records, human resources management, etc. 

Such digitization of public administration could be good news for citizens and for businesses, it can lead to the more efficiently functioning public administration and improvement of its services.   

8. In what state is the preparation of a central system for guaranteed e-invoicing

According to available information from the Ministry of Finance, the project of the e-invoicing system in public administration is still only in the preparatory phase. Feasibility study of the project was established in 2018, and the project using the value for money methodology was also already rendered.

In the spring of this year, the government approved a national project for public purchases with paperless invoices for the period 2019-2022 and secured financing for it in amount of 5 Mio. EUR by European funds.  

As at the beginning of October 2019 has not yet been published any public offers on the public procurement portal in this respect.  

It remains so now only one and a half years for the procurement, implementation, and testing and informing the public about the system of e-invoicing , which is due to the impact and scope of the project rather strict term.     

9. We recommend businesses to monitor developments in implementation of e-invoicing system

Even though there are no direct obligations for businesses in the new law, we recommend following developments in this area. The range of public administration suppliers is wide, and everyone will have to prepare to implement this system.     

Please note that every contractor of entire public sector organizations will be involved in the system of guaranteed e-invoicing. This includes not only large suppliers of ministries and various infrastructure projects, but also the usual suppliers of e.g. school canteen, health centres, or suppliers of towns and villages etc.  

Therefore, after the publication further details on the system by the Ministry of Finance everyone will need to start preparing their own systems and processes to connect to the central system of guaranteed e-invoicing.   

For others, this also means an opportunity for voluntary involvement in the system and the transition to digitizing invoice processing at a higher level, without the need of complicated extraction of information from regular invoices.