The proposed law on electronic invoicing in public procurement, developed by the Ministry of Economy, Entrepreneurship and Crafts, aims to align the legislation of the Republic of Croatia with the EU legal acquis, and is expected to lead to the acceleration and automation of business processes, along with achieving significant savings.
As stated in the draft proposal, which has been in public consultation since April 12, with a consultation duration of at least 30 days, the main goal is to enable the complete receipt and issuance of e-Invoices in public procurement procedures, aiming to achieve estimated budget savings of six to 13 percent of the total amount of public procurement, or about 2.5 billion kuna annually.
Among other things, it is noted that electronic invoicing encourages better productivity/effectiveness in resource use, and the estimated savings from the introduction of electronic invoices in business are around 7 euros or more per invoice, of which 80 percent of the savings are realized by the buyer, and 20 percent by the seller. Across the entire EU, projected savings from the introduction of electronic invoicing for companies amount to about 64.5 billion euros annually.
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“By introducing electronic invoicing into business, business processes are accelerated and automated, operating costs are reduced, significant savings are achieved, and potentially greater added value is created in business, both in the economic sector and in public and state administration,” states the draft.
It is also noted that the goal is to start establishing a comprehensive process of integrated electronic public procurement from the announcement of the competition, through electronic submission of bids, monitoring contract execution, e-Invoices, and e-Payments, thereby maximizing the effects of digitalization of public procurement processes in the Republic of Croatia, with all savings and transparency.
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Furthermore, the law aims to ensure conditions for contracting authorities to receive and process structured electronic invoices that comply with the European standard for electronic invoicing. “The drafting of the proposal is necessary due to the obligation to implement the EU legal acquis and to ensure a legislative framework for electronic invoicing in public procurement procedures, based on public procurement contracts,” states the draft.
As explained, due to the multiple norms of electronic invoices that were not interoperable, there was excessive complexity, legal uncertainty, and additional operational costs for economic entities using electronic invoices across member states.
“Inconsistent legal and technical requirements regarding electronic invoices pose barriers to market access in cross-border public procurement and trade barriers. They undermine fundamental freedoms and directly affect the functioning of the internal market,” it is stated.
In Croatia, in 2017, the volume of e-Invoice exchange was 10 percent, and it is expected that this percentage will significantly increase with the adoption of the law.
