In our December 11th blog, we took a whirlwind tour of the sweeping changes underway in indirect tax reporting and electronic filing, highlighting some of the key markets where these changes are taking place. In this article, we discuss the new PEPPOL requirements in the European Union.
What is PEPPOL?
Let’s start with a definition: PEPPOL is essentially a 21st-century electronic data interchange (EDI) network for the EU, based on a set of open, interoperable technical specifications across purchase-to-pay business processes.
But PEPPOL is not another e-procurement system. This European electronic data exchange network was designed to facilitate secure electronic transactions between buyers, sellers, and government agencies. The range of organizations includes government departments, private and public companies, and representative service providers. PEPPOL enables government offices and commercial enterprises to exchange electronic trading documents, contracts, and tax files over a certified network within the EU.
PEPPOL standardizes the receipt of electronic ordering, invoicing, shipping, and tax data from entities involved in commerce within the EU and the relevant government authorities. PEPPOL consists of three components:
- The PEPPOL Transport Infrastructure network
- The PEPPOL Transport Infrastructure Agreements (TIA) which provide a legal framework for network governance and organizational participation
- The PEPPOL Business Interoperability Specifications (BIS) for authorized documents and technical requirements
The PEPPOL network is based on a “four-corner” communication model. This model allows product and service suppliers to engage with the certified “access point providers” of their choice to exchange official electronic documents with users within the PEPPOL network. This network is governed by the PEPPOL TIA that define a many-to-many legal framework for operations.
PEPPOL developed BIS for e-procurement processes (involving an e-catalog, e-orders, e-dispatch advice, and e-invoice descriptions) to standardize electronic document-exchange validation. All authorized documents are sent and received across an open and secure network via the identified provider nodes known as “access points.”
PEPPOL access points
PEPPOL offers access to its network across the EU via accredited access points. Organizations using the network can themselves function as PEPPOL access points by meeting technical published specifications. Connections between access points are inherently multilateral, and thus only one PEPPOL connection per participating organization is required or authorized.
All PEPPOL access points are granted with the contractual agreement that no roaming fees are charged or received. Thus, an enterprise may pay for commercial services from a network service provider (or ISP). But when connecting via PEPPOL to a customer of a different service provider, neither the customer organizations nor their service providers can charge additional fees for the PEPPOL connection.
And because all access points have agreed to interoperability protocols, all existing e-procurement (P2P) and e-invoicing solutions become interconnected via PEPPOL. Therefore, when an organization uses an existing procurement solution on PEPPOL, its service provider is an access point that connects them to any other organization within the network.
Document compliance for PEPPOL
Fortunately for companies doing business in the PEPPOL markets of Belgium, the Netherlands, and Germany (via the XRechnung e-invoice standard), SAP is a certified PEPPOL access point. SAP now offers a version of document compliance (e-invoicing) with certified, PEPPOL-compliant functionality, SAP Document Compliance, on-premise edition.
This is an abridged version of an article that originally appeared on the SAP Analytics blog, and is republished by permission. Please read the full article here.