Australia Establishes E-Invoicing as Default in Federal Procurement

• Mandatory E-Invoicing for Government Procurement: The Australian Government has confirmed that electronic invoicing (e-invoicing) through the Peppol network will become the default method for invoice exchanges in government procurement, primarily affecting Non-Corporate Commonwealth Entities (NCEs).
• Compliance Milestones: NCEs are mandated to achieve specific targets, including having at least 30% of invoices received via e-invoicing by July 2026, full automation of e-invoice processing and issuance by December 2026, and quarterly progress reporting to the Australian Peppol Authority.
• Voluntary Compliance for Suppliers: While suppliers are not legally obligated to adopt e-invoicing, the Australian Taxation Office encourages NCEs to make it a contractual requirement, which may lead to practical scenarios where suppliers feel compelled to use e-invoicing due to government demand. The Peppol network already has over 400,000 businesses registered, indicating a robust market readiness for e-invoicing.

Source Comarch

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Australia’s e-Invoicing Mandate: Key Highlights

• Mandate Timeline: Australia will make e-invoicing the default for Commonwealth government agencies by December 2026, with a mid-2026 target of 30% of supplier invoices processed via Peppol, driving efficiency and standardization in public sector invoicing.
• Tax Compliance: E-invoices meeting the A-NZ Invoice Specification under Peppol qualify as valid Australian tax invoices, even without “tax invoice” or “GST invoice” labels, provided all mandatory data fields are included, ensuring businesses maintain full compliance.
• Government Support: Agencies and suppliers are guided through dedicated resources, including an online government portal with adoption timelines, objectives, and lists of Peppol-enabled suppliers, helping agencies connect and meet e-invoicing requirements efficiently.
• Small Business Training: The ATO offers online training courses for small businesses, accountants, and bookkeepers to understand e-invoicing requirements, supporting adoption, reducing errors, and ensuring smooth integration with automated invoice processing systems.
• Economic Benefits: Full e-invoicing adoption could generate A$22.5 billion annually through faster payments, improved productivity, reduced fraud, shorter payment cycles, and time savings, with firms potentially saving up to A$970,000 each year.