Ten recent global e-invoicing and digital reporting updates you should know about
France is moving ahead with mandatory B2B e-invoicing and e-reporting for B2C and cross-border sales and purchases with effect July 1, 2024. The latest (v.2.1) technical specifications (“Dossier de spécifications externes de la Facturation Électronique”) were recently released, as well as updated FAQs.
An e-invoicing working group, made up of various stakeholders, including Avalara, is working through the specifications to identify where there may need to be modifications or additional explanation to ensure the success of the e-invoicing project. A major current focus of the group is ensuring that there is interoperability across different e-invoicing partner platforms. Every e-invoicing provider will need to ensure that the three main French e-invoice formats are supported (UBL, CII and Factur-X), and every French business will be able to inform its suppliers and vendors which format it wants to receive its e-invoices in.
Watch our webinar on the upcoming French e-invoicing requirements on-demand here.
Poland has confirmed that it is moving ahead with mandatory B2B e-invoicing from January 1, 2024. Permission to proceed was recently received from the European Commission (in the form of a derogation).
As a reminder, Poland has launched a National System of e-invoices (Krajowy System E-Factur or “KSeF”). This will allow Polish taxpayers to issue and receive structured e-invoices. A transition period started with effect January 1, 2022, where the use of KSeF is voluntary and e-invoicing can be used in parallel with paper invoices and non-structured e-invoices. It is anticipated that e-invoicing will eventually replace the existing SAF-T (JPK) monthly reporting requirement.
While B2B e-invoicing has been mandatory for the majority of Italian businesses since January 1, 2019, there have been some recent changes to the Italian e-invoicing regime. With effect July 1, 2022, cross-border Esterometro reporting has been replaced by a requirement for Italian businesses to transmit cross-border invoice data to the Italian Tax Authority via the national e-invoicing platform, Sistema di Interscambio (SDI) in a mandated XML format (FatturaPA). The reporting deadlines for this new requirement are within 12 days of the time of supply for cross-border sales invoices issued and by the 15th of the month following the time of supply for cross-border purchase invoices received. In addition, from July 1, 2022, B2B e-invoicing has become mandatory between Italy and San Marino. Finally, from the same date, mandatory SDI e-invoicing has been extended to small businesses, bringing all Italian businesses within the mandate.
Italy has also recently announced slight updates to the SDI specifications with effect October 1, 2022 (v.1.8.2). There is a change to the XSD schema of the ordinary invoice (for introduction of a new Type of Document – “TD28” for purchases from San Marino with VAT (paper invoices) and an update to the description of the Natura N7 element.
Spain has moved closer to introducing mandatory B2B e invoicing with effect 2024, with the Spanish Senate passing and publishing the Crea y Crece Bill (the “Create and Grow” Law). The released text includes amendments to the original draft legislation approved by Congress. E-invoicing will become mandatory for all businesses and professionals, starting with large businesses in 2024. There is a reference to the European standard on electronic invoicing (EN-16931) and its syntaxes. Therefore, it appears that Spain will likely adopt UBL (Universal Business Language) and CII (UN/CEFACT Cross Industry Invoice) which are the two XML-based specifications for exchanging business information and the two supported syntaxes that comply with EN 16931.
Prior to finalising new e-invoicing regulations, the Spanish Government will issue the draft regulations for review and hold a public consultation to obtain feedback from interested stakeholders. In preparation for mandatory e-invoicing, Spain also recently issued draft legislation setting out new strict IT, security and tax requirements for developers, marketers and users of invoicing systems and software. This includes requirements for e-invoicing software developers and solution providers to certify that their systems comply with the new standards and requirements. Invoices generated must include an alphanumeric identification code, a QR code, and the narrative "Invoice verifiable at the electronic headquarters of the AEAT" or "VERI*FACTU" where the system sends the invoicing records directly to the AEAT, the Spanish tax authority.
Serbia is mandating B2B e-invoicing from January 1, 2023 using the System E-Faktura (e-Invoice System). The UBL 2.1 standard is being used and sample files are available for download. Serbia’s Core Invoice Usage Specification (CIUS) is also identical to the European standard. Businesses will need to first register on the Electronic identification Portal and have a Qualified Electronic Certificate or two-factor authentication using ConsentID (via mobile phone). E-invoices must be archived for a period of ten years from date the invoice was issued and authenticity of the origin and integrity of the content of invoice must be maintained throughout this period. E-Invoicing solution providers who carry out “information intermediary activities” for businesses must be approved by the Ministry of Finance.
E-invoicing Week 2022 runs from 15 to 21 August 2022. This national event aims to raise awareness of e-invoicing and drive adoption of e-invoicing in Australia. The Peppol framework was adopted by Australia as the common standard for e-invoicing.
Consultation on options for mandatory e-invoicing across all levels of government and businesses is ongoing and earlier this year, the Australian Government announced a proposal to create a “Business eInvoicing Right” (BER) with a staggered approach from July 1, 2023. Under this proposed initiative, customers would have the right to be able to request that suppliers issue an electronic invoice to them instead of paper invoices.
Unlike pre-clearance e-invoicing models, the Australia Tax Office (ATO) does not receive a copy of the e-invoice and is not able to view the contents of any e-invoices being transmitted between businesses. However, the ATO have defined the Australian requirements for use of the Peppol standards and therefore the e-invoices must meet the usual GST tax invoicing requirements. Businesses in Australia wishing to issue e-invoices, must connect to the Peppol network through an access point, generally through a third-party service provider.
7. European Union - VAT in Digital Age
The final report on VAT in the Digital Age has been published. The purpose of the report is two-fold, firstly to assess the current status quo with regard to the three work streams under the initiative’s scope (i.e. a move towards a single VAT return, the platform economy, and digital reporting requirements). Second, the report aims to assess the impacts of a number of possible different policy initiatives in each area. The report is intended to feed into the preparation of an Impact Assessment by the European Commission, to accompany possible legislative or non-legislative initiatives across the workstreams.
In relation to e-invoicing and digital reporting, the European Commission’s legislative proposals will be released on November 16, 2022. Possible areas that have been discussed and debated and included in the public consultation or the study include:
A move to a harmonised common standard for e-invoicing across the EU (most likely encouraging the acceptance of the main European e-invoicing standard (EN 16931) for domestic B2B e-invoicing)
The gradual introduction of obligatory e-invoicing across the EU, as well as the removal of the current pre-requisite for European member states to obtain a formal derogation to introduce mandatory B2B e-invoicing.
While some of the above e-invoicing initiatives may appear in the final legislative proposal, it is likely that the main initiative will be a new pan-European digital reporting requirement (DRR) that will replace the current EC Sales List requirement. The transactional data to be submitted under this new DRR requirement is likely to be a subset of e-invoice transactional data. It would run in parallel to the wave of domestic e-invoicing mandates that are already slated to be introduced across the EU (including France, Spain, Poland and Belgium). The reporting model is unlikely to follow the clearance model, but would have a wide scope i.e. covering both B2B and B2G, domestic and cross-border supplies, and applicable to all taxpayers regardless of size.
Japan will launch a new invoice system for Japanese Consumption Tax (JCT) with effect October 1, 2023. Under the new system, business customers will be required to obtain and retain qualified invoices which fulfil certain mandated requirements in order for them to be able to claim input JCT credits. In addition, there will be a formal requirement for sellers to be registered invoice issuers and issue compliant qualified invoices to their customers.
Japan will also likely move to e-invoicing quickly to coincide with the new qualified invoicing rules with e-Qualified Invoices. The Japan Peppol Authority has already started the Accreditation Process for Service Providers and recently released a draft of the second version of the Japan PINT e-invoice requirements. Widespread voluntary use of Peppol e-invoicing in Japan anticipated before a likely mandate from October 1, 2023.
Romania has launched a new national system of electronic invoicing – the RO e-Factura. With effect July 1, 2022, it is now mandatory to issue e-invoices via RO e-Factura for B2G transactions. In addition, e-invoicing is also mandatory for certain B2B supplies of “high risk” products. The e-invoicing mandate is likely to be extended to all B2B businesses in Romania within the next 12 to 18 months. This will require approval from the European Community (a derogation to be formally approved and issued).
10. Kingdom of Saudi Arabia
Saudi Arabia is moving forward with Phase 2 of its Fatoorah e-invoicing mandate. This will be rolled out on a phased basis between January 1, 2023 and June 30, 2023. Zakat, Tax and Customs Authority (ZATCA), recently announced the revenue threshold for the first wave of largest businesses in KSA to be compliant by integrating with ZATCA and issuing invoices in the required format from January 1, 2023. The threshold for this first group has been set at SAR3 billion (for the calendar year 2021). Further groups of taxpayers will be notified of the deadline to be compliant with Phase 2 at least six months in advance. The latest technical specifications were recently released and are expected to be finalised shortly.
At Avalara, we make e-invoicing compliance simple. The Avalara e-Invoicing solution is designed to comply with regulations in over 60 countries and we’ve got the future covered, too. This cloud-based solution is flexible, scalable and allows you to quickly respond to new requirements.
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