e-Invoicing in New Zealand: Timeline, Guidelines, Process and Steps for Implementation

New Zealand, in collaboration with Australia, has been progressively implementing e-invoicing since 2018.  The Ministry of Business, Innovation and Employment (MBIE) is the designated Peppol Authority in New Zealand, responsible for overseeing the adoption of the Peppol e-invoicing framework.

The scope of e-invoicing in New Zealand primarily covers Business-to-Government (B2G) transactions, with plans to extend to Business-to-Business (B2B) interactions. It utilizes the internationally recognized Peppol four-corner model and the Peppol BIS Billing 3.0 format, which has been recently updated to the PINT A-NZ specification.

This blog post aims to explain e-invoicing in New Zealand, detailing the implementation timeline, key milestones, and the overall process and framework, including the Peppol network and format. 

What is e-Invoicing in New Zealand?

E-invoicing in New Zealand involves directly exchanging invoice data in a structured electronic format between trading partners' accounting systems.

Instead of paper or emailing PDFs, invoices are securely transmitted from the supplier’s system to the buyer’s system, eliminating manual data entry for the buyer, as the invoice appears ready for approval and payment. This is facilitated by the Peppol framework, which ensures different software systems can communicate effectively.

When a business issues an e-invoice in New Zealand, it uses its accounting software or a service provider to send the invoice in XML format (Peppol BIS 3.0) over the Peppol network, identified by the businesses’ NZ Business Numbers (NZBNs).

The significance of e-invoicing lies in its elimination of manual invoice handling, which reduces errors and enhances security by using a vetted network.

e-Invoice Implementation Timeline

New Zealand's e-invoicing implementation has progressed through several stages:

e-Invoicing Process in New Zealand

To start with e-invoicing, register with an e-invoicing access point provider or ensure your software is e-invoicing enabled. Provide your New Zealand Business Number (NZBN) and business details to allow trading partners to discover you on the network.

Here are the steps to generate e-invoice in New Zealand

1. Invoice Generation: The supplier creates an invoice in their financial system, exporting the data in a format ready for e-invoicing.
2. Transmission via Peppol Network: The supplier’s system sends the invoice through an Access Point (AP) to the Peppol network. An Access Point is a secure gateway service that connects your software to the Peppol network. The network validates the NZBNs of the supplier and buyer, ensuring the e-invoice is delivered correctly.
3. Receipt and Processing by Buyer: The buyer’s Access Point receives the invoice and delivers it into the buyer’s financial system. The invoice is automatically matched against purchase orders, and the buyer is notified for approval. The NZBN ensures it was sent to the correct organization.
4. Payment and Acknowledgement: The buyer schedules payment. Government agencies are expected to pay within 5–10 working days.

E-invoicing Compliance Guidelines

Businesses should be aware of the following compliance guidelines:

• GST and Tax Invoice Requirements: The Inland Revenue Department (IRD) updated its GST invoicing rules to accommodate e-invoicing, replacing the term "Tax Invoice" with "Taxable supply information".
• Data Standards and Format: E-Invoices must be in the Peppol BIS format (A-NZ profile). New Zealand transitioned to the PINT A-NZ 1.1 specification in late 2024.
• Verification and Validation: The Access Point verifies critical elements such as the NZBN.
• Record Keeping: Businesses must retain business records (including invoices) for 7 years.
• Privacy and Security: Maintain confidentiality of e-invoices, and choose an accredited provider.
• Legal Acceptance: An e-invoice sent via the Peppol network is accepted as a valid invoice under New Zealand law.

Types of e-Invoices in New Zealand

There are a few different document types and use cases that fall under the e-Invoicing umbrella:

• Standard B2B/B2G e-invoice: An invoice issued by a supplier to a buyer for goods or services, including all necessary details in the Peppol BIS format.
• Credit Notes (Adjustment e-invoices): Electronic credit or debit notes issued through the e-invoicing network, referencing the original invoice.
• Buyer-Created e-invoices: Invoices generated by the buyer on behalf of the supplier.
• International e-invoices: E-Invoices sent to overseas trading partners via Peppol.
• Government-specific e-invoices: Standard Peppol invoices sent to government agencies, potentially requiring specific reference fields.

E-invoicing Model and Framework (Peppol-based)

New Zealand’s e-invoicing model is based on the Peppol framework, a standardized system used globally.

Key components include:

• Four-Corner Model (Network): The supplier and buyer connect through Access Point providers.
• Governance: MBIE is the Peppol Authority, ensuring adherence to technical standards and service quality.
• Document Standards: The format for e-invoices is the Peppol Business Interoperability Specification (BIS) Billing 3.0, as localized for Australia and New Zealand.
• Service Metadata Publisher (SMP) and NZBN: The unique business identifier used is the NZBN (New Zealand Business Number) for companies.
• Integration with Business Systems: The e-invoicing model integrates with existing financial systems.

Who Needs to Comply with e-Invoicing in New Zealand?

Currently e-invoicing is not universally mandatory for all businesses in New Zealand, but there are specific groups that are required (or strongly expected) to implement it, primarily in the public sector. 

• Central Government Agencies: Since 1 March 2022, all central government agencies have been mandated to receive e-invoices.
• Broader Public Sector Agencies by 2026: A wider range of government agencies must be capable of sending and receiving e-invoices by 1 Jan 2026.
• Suppliers to Government (Potential Future Mandate): The government is considering making e-invoicing mandatory for certain suppliers who sell to the Government.
• Private Sector Businesses (Voluntary): There is currently no mandate for B2B e-invoicing.

Benefits of e-invoicing in New Zealand

Adopting e-invoicing offers a host of benefits for New Zealand businesses and government such as

• Faster Payment and Improved Cash Flow: Government agencies are committed to paying e-invoices quickly.
• Reduced Administrative Burden and Costs: e-invoicing reduces the time and costs associated with manual invoicing.
• Improved Accuracy and Fewer Errors: Eliminates data entry errors.
• Enhanced Security and Fraud Reduction: Offers a more secure channel for exchanging invoices.
• Universal Connection and Interoperability: One connection to reach many partners.
• Better Tracking and Transparency: Provides more visibility into the invoicing process.
• Available to All Businesses (Including SMEs): Accessible to small businesses through existing software.
• Improved Economic Productivity: Contributes to economic growth through efficiency gains.

How Can ClearTax Help Businesses with e-Invoicing in New Zealand?

ClearTax provides a comprehensive e-invoicing platform for New Zealand businesses:

• End-to-End e-invoicing Solution: Manages the entire process from invoice generation to delivery and tracking.
• Integration with ERP/Accounting Systems: Integrates with existing ERP and accounting systems.
• Peppol Access Point and Format Compliance: Operates as an accredited Peppol Access Point provider.
• Automation and Validation: Automates validation checks and the sending process.
• Real-Time Tracking and Dashboard: Provides a dashboard to monitor all e-invoices.
• Compliance Management and Reporting: Helps maintain compliance with record-keeping and audit requirements.
• Scalability and Support: Offers scalability and support services.

Government References for e-Invoice New Zealand

Conclusion

e-invoicing in New Zealand modernizes billing and payments for businesses and government agencies. Key points include:

• e-invoicing involves direct electronic exchange of invoices.
• Government agencies are increasingly using e-invoicing.
• Benefits include faster payments, reduced admin work, and fewer errors.
• Businesses should check their readiness and consider adopting e-invoicing.

ClearTax's solution can assist in integration, compliance, and automation, making the switch easier.