Most of the vocabulary of mandatory e-invoicing assumes that the seller writes the invoice. The seller issues, the seller transmits, the seller's platform or provider submits the data, the seller's identifier is the one checked against the register. Every one of those verbs has a subject, and in nearly every specification it is the supplier.
Self-billing breaks the assumption without breaking the law. It is an old, respectable and widely used arrangement: in agriculture, in the motor trade, in utilities buying from small producers, in publishing royalties, in any market where the customer knows what was supplied better than the supplier does. And it is one of the places where a mandate that was drafted with the ordinary case in mind can quietly fail to fit.
What the Directive permits
Article 224 of the VAT Directive allows an invoice to be drawn up by the customer in respect of goods or services supplied to it, on two conditions: there is a prior agreement between the parties, and there is a procedure for the supplier to accept each invoice. Member States may also require that such invoices are issued in the name and on behalf of the supplier. Article 226 then adds one item to the mandatory content: where the customer issues the invoice instead of the supplier, the invoice must carry the mention "Self-billing".
The Commission's explanatory notes on the invoicing rules add two clarifications. The terms of the agreement and of the acceptance procedure are for the two parties to settle, and a Member State cannot prescribe the form of the agreement; but the agreement has to precede the first self-billed invoice, and the parties must be able to show that it existed. Acceptance itself may be explicit or implicit, evidenced for instance by the supplier processing the invoice or receiving the payment.
That is the whole of the European framework, and it is worth noticing what it does not say. It does not transfer liability for the tax. It does not change the place of supply, the chargeable event or the rate. It changes the author of a document, and that is all.
Self-billing and reverse charge are often confused because in both the customer does something the supplier would normally do. Under a reverse charge the customer accounts for the VAT. Under self-billing the customer writes the invoice and the supplier still accounts for the VAT shown on it. The two can coincide, but they answer different questions, and the invoice has to be read accordingly — see VAT determination on a structured invoice.
How the document says it
In the European semantic model, a self-billed invoice is still an invoice with the same business terms. What distinguishes it is the document type. The UNTDID 1001 code list has specific values: 389 for a self-billed invoice, 261 for a self-billed credit note, and 527 for a self-billed debit note. The seller in the document is still the supplier and the buyer is still the customer — the parties do not swap places in the data just because they have swapped places in the process.
What does swap is the direction of travel. OpenPeppol publishes a separate specification, BIS Self-Billing, precisely because the sender of the message on the network is the buyer and the receiver is the seller. In an ordinary exchange, the network looks up the buyer's capabilities and delivers to the buyer. In self-billing, it looks up the seller's. A supplier that has registered on the network only to send invoices may not be registered to receive this document type at all — which is the kind of detail that surfaces in the first week of a roll-out and was obvious in hindsight. The mechanics of that lookup are in Peppol addressing.
| Question | Ordinary invoice | Self-billed invoice |
|---|---|---|
| Who draws up the document | The supplier | The customer, under a prior agreement |
| Seller in the data | The supplier | Still the supplier |
| Document type code | 380 invoice, 381 credit note | 389 invoice, 261 credit note, 527 debit note |
| Extra mention required | None | "Self-billing" (Article 226) |
| Sender on the network | The supplier's access point | The customer's access point |
| Capability looked up | The customer's | The supplier's |
| Who accounts for the VAT shown | The supplier | Still the supplier |
| Acceptance | Not required by the Directive | A procedure for each invoice, explicit or implicit |
The specification also sets out what the supplier can do on receipt: accept and post the invoice as revenue, reject it entirely, or dispute part of it and ask for a credit note or a revised document. That is the "procedure for acceptance" in Article 224, expressed as a process.
Where national systems strain
A clearance or reporting system has to decide whose obligation the submission is, and the easy answer — the issuer's — is wrong in one of two ways for self-billing.
If the obligation sits with the issuer, the customer becomes responsible for submitting documents about the supplier's sales, which works administratively but leaves the supplier with a legal liability based on data it never sent. If the obligation sits with the supplier, the supplier has to submit a document it did not write, often without the systems to do so. The European framework does not settle which, so each national specification has to, and the answer is not guaranteed to be the one a project assumed. Anybody with self-billing flows in a country with a platform should find the specific rule in the national specification, rather than assume the ordinary one applies — the difference between invoicing and reporting obligations is exactly where it tends to be written.
Numbering is the second point of strain. A self-billed invoice needs a sequential number that uniquely identifies it, like any other, but the series belongs to an arrangement between two parties rather than to the supplier's own invoicing. A supplier that receives self-billed invoices from three customers and issues its own invoices to everyone else has four series in play. The logic of that, and how to keep it defensible, is covered in invoice numbering rules.
The agreement is a control
The prior agreement in Article 224 is easy to treat as a formality, because it is often a clause in a supply contract signed long ago. Under structured invoicing it becomes something more concrete. It is the document that establishes the customer's authority to issue in the supplier's name, and therefore the document an auditor will ask for when the supplier's reported sales turn out to have been reported by somebody else.
That makes it part of the evidence discussed in business controls and the audit trail: it should say which supplies it covers, how acceptance works and how long it runs, and it should be retrievable for as long as the invoices it authorises have to be kept. An arrangement that has quietly outlived the contract it was written into is a self-billing arrangement with no basis, and nobody will notice until the documents are questioned.
What to do about it
Three things, none of them difficult. List the self-billing flows you have, in both directions, because they are usually known only to the teams that run them. For each country where one of them runs, find the national rule on who submits and who is accountable, and check it against what your provider actually does. And for each arrangement, retrieve the agreement and confirm that it still describes the supplies being invoiced.
Self-billing does not need to be redesigned for mandatory e-invoicing. It needs to be noticed, which is harder, because it is exactly the kind of process that works so well nobody remembers it is unusual.
