North America

The 2021 EU E-Commerce VAT Package and One Stop Shop (OSS)

VAT package simplifying cross-border B2C trade in the EU

From 1 July 2021, the EU will introduce its e-Commerce VAT Package. The package replaces existing distance-selling rules and extends the Mini One Stop Shop (MOSS) into a wider-ranging One Stop Shop (OSS).

This represents a significant change to VAT rules for B2C supplies of goods and services, both as imports to the EU as well as intra-EU trading. The new, significantly lower pan-EU threshold of €10,000 (€0 for businesses established outside the EU) will impact most businesses and they will need to account for VAT on more supplies.

For a no-obligation discussion about your VAT requirements, speak to one of our experts

What is the 2021 EU e-Commerce OSS VAT Package?

Compared to the requirement for multiple VAT registrations under longstanding distance selling rules, with the OSS simplification, businesses may be able to register in one Member State and report all EU transactions through a single OSS return filed periodically. Payments are collected and distributed from the tax authority in this Member State to others where the VAT is due.

trade wars beverage alcohol

The EU e-Commerce VAT Package introduces three schemes under OSS:

  • Import One Stop Shop (IOSS) – for low value goods (≤ 150€) delivered from outside the EU
  • Union One Stop Shop (Union OSS) – for intra-EU B2C deliveries of goods and services
  • Non-Union One Stop Shop (non-Union OSS) – non-EU to EU services (previously the Mini One Stop Shop, MOSS)

From 1 July 2021: The EU e-Commerce VAT Package is due to come into effect. Whether or not a business decides to use the OSS schemes, they will have to account for VAT in all countries where they have a VAT liability. This may result in additional VAT registrations being required.

Quick Facts on VAT and OSS

  • If a business decides to use the OSS simplification, then they must apply it to all qualifying transactions.
  • Additional record-keeping is required for OSS: Businesses using any of the OSS reporting schemes must retain more detailed records of transactions than previously. This additional data may be requested by tax authorities and used in audits to check VAT has been applied appropriately.
  • Declarations for Union and non-Union OSS are quarterly. The submission deadline will change to the last day of the month following the return period. Declarations under IOSS are monthly.
  • Businesses can correct previous OSS returns in the next OSS return. This is instead of correcting the original submitted OSS return.
  • Businesses established in the EU may only register for OSS in the Member State of establishment.
  • Non-EU businesses may need to appoint an intermediary and obtain an IOSS VAT registration in the intermediary’s country of establishment in the EU.
  • Non-Union OSS registrations can be in any chosen Member State although this may be dictated by the location of a chosen intermediary, if required. If already registered under MOSS, existing registration will continue.
  • Depending on the nature of business activity/supply chains, non-EU retailers may need to report under all three schemes. They will also need at least one ‘standard’ VAT registration and possibly more due to warehouses or similar.
  • EU businesses may have to report under OSS and IOSS as well as local registrations.

Penalties for non VAT compliance

Failure to submit returns and make payments or notify the relevant tax authority of a significant change in supply chain (e.g. warehouse) on time can result in penalties. These can be imposed in each Member State where VAT is due or even expulsion from the scheme. Consequently, the penalisation of a single late return in multiple countries creates significant exposure to penalties.

Repeated noncompliance can lead to exclusion from the OSS schemes. The taxpayer then needs to register for VAT in all Member States where it has a VAT liability.

If expelled from the scheme, the two-year exclusion period could have significant commercial consequences as compliance costs are likely to increase and new VAT numbers will be required urgently.

Exclusion from IOSS may require the business to change its commercial arrangements with its customers which could have a significant impact on sales or increase compliance costs.

How Sovos helps companies navigate the new EU e-Commerce VAT OSS Package requirements

Implementing the changes required to comply with the EU e-Commerce VAT Package into your ERP system could take significant time and resources. Sovos can help ease the tax burden and help you prepare for and understand the right solution for your business.

Our large advisory team can help you navigate the complexities of modern VAT compliance.

Contact us to discuss how we can help your company prepare for the digital future of tax.

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E-invoicing Italy: All you need to know

Italy was the first country in the region to introduce a clearance e-invoicing model with the Sistema di Interscambio (SdI) platform. Seeking to close one of Europe’s most significant VAT gaps, the government has steadily improved its Continuous Transaction Controls (CTC) system.

Beginning with B2G e-invoicing in 2014 and extending to cover domestic B2B and B2C e-invoices in 2019, Italy became the first EU country to make B2B e-invoicing mandatory through a clearance process.

This overview will:

  • Explain how Italy’s e-invoicing works
  • Help you understand how to comply with the e-invoicing regulations
  • Answer your questions about the Sistema di Interscambio

Have questions? Get in touch with a Sovos Italy e-invoicing expert today to learn how we can help with your global e-invoicing obligations.

Table of Contents

  1. Quick facts
  2. Scope of e-invoicing in Italy
  3. Mandate Rollout Dates
  4. Penalties
  5. Register for e-invoicing in Italy with Sovos
  6. FAQ

Quick facts about e-invoicing in Italy

  • Issuing e-invoices requires creation in a structured format and transmission is via the Sistema di Interscambio
  • The Fattura PA – the tax authority’s XML schema format – is the required format for issuing e-invoices
  • For B2B e-invoices, businesses can choose how to ensure the integrity and authenticity of invoices, but there is a strong market preference for Qualified Electronic Signatures. However, B2G e-invoices must be electronically signed.
  • Exchange of National Health Service purchase orders is through the NSO platform and referenced accordingly in the e-invoice.
  • E-archiving invoice requirements include the obligation to:
    • Execute a signing and time stamping process for e-invoices in an archive
    • Maintain a documented description of the archive and the archiving process (Manuale della Conservazione)
    • Put in place a clear delegation plan setting up the responsibilities around the archiving process
  • Since 1 July 2022, all cross-border transactions must be reported through the SdI in the FatturaPA format. Taxpayers can continue to exchange cross-border invoices in any agreed way.

Scope of e-invoicing in Italy

B2B e-invoicing in Italy applies to:

  • Domestic B2B transactions between Italy resident/established taxpayers
  • Almost all Italy resident/established taxpayers
  • Included in 2022: Taxpayers who adopt the flat-rate tax regime (regime forfettario) and amateur sports associations and third sector entities with revenue up to EUR 65,000
  • From 1 Jan 2024: Microenterprises with revenues or fees up to EUR 25,000

B2G e-invoicing in Italy applies to:

  • All taxpayers supplying goods/services to public administration entities

E-invoicing in Italy: Mandate Rollout Dates

  • 6 June 2014: Phased roll-out of mandatory B2G e-invoicing starts in Italy
  • 1 July 2018: Clearance mandate goes into effect for manufacturers and distributors of petrol and diesel intended for use as a motor fuel in cars and road vehicles
  • 1 September 2018: Mandate starts for tax-free sales to non-EU individuals acting as final customers
  • 1 January 2019: Mandate becomes a requirement for domestic B2B and B2C transactions in Italy, with minor sector-specific exceptions
  • 1 February 2020: Exchange of purchase orders for the supply of goods to entities associated with the National Health Service through the NSO platform becomes compulsory and reference in the e-invoice becomes a requirement
  • 1 January 2021: Introduction of pre-populated VAT returns and enforcement of new FatturaPA schema
  • June 2021: Enforcement of the new requirements for the creation and archiving of electronic documents
  • October 2021: Voluntary transition phase for e-invoicing between Italy and San Marino began
  • 1 July 2022:
    • Italian businesses must report information on cross-border transactions to the SDI in the FatturaPA format. As a result, Esterometro was abolished on 30 June 2022
    • E-invoicing using the FatturaPA format becomes mandatory between Italy and San Marino, with the Italian SdI as the access point for Italian taxpayers and the HUB-SM platform as the SdI counterpart on San Marino’s side
    • Scope of the B2B e-invoicing mandate in Italy broadened to include:
      • Taxpayers who adopt the flat-rate regime (regime forfettario)
      • Amateur sports associations and third sector entities with revenue up to EUR 65,000
  • January 2024: E-invoicing scope to include microenterprises with revenues or fees up to EUR 25,000
  • 1 July, 2030: Italian VAT-registered businesses must comply with VAT in the Digital Age (ViDA) requirements, which include mandatory e-invoicing and digital reporting for Intra-Community B2B transactions.

Penalties: What happens if you don’t comply

  • Failure to issue an invoice or issuing an invoice that doesn’t meet the XML format will result in a penalty between 90-180% of the associated VAT amount.
  • Issuing a purchase invoice to a client without adhering to mandate requirements will result in a penalty of 100% of the associated VAT amount.
  • After a grace period (expired for the supply of goods and services), there will be no payment for invoices issued to entities associated with the National Health Service if no prior purchase order has been transmitted through the NSO platform and referenced in the e-invoice

Register for e-invoicing in Italy with Sovos

Sovos ensures compliance with all SdI e-invoicing and VAT requirements in Italy including CTC e-invoicing, reporting and e-archiving. All you need to do is work with us and you can use our solution that connects directly with the SdI.

Want to learn more about e-invoicing?

Download the 13th edition of Trends to learn about the global e-invoicing landscape

Eastern Europe is another region adopting e-invoicing. Find out more in our ebook, VAT Digitization in Eastern Europe

FAQ for e-invoicing in Italy

Is e-invoicing mandatory in Italy?

E-invoicing in Italy is mandatory for the majority of the B2B, B2C and B2G invoices. Suppliers performing activities classified as “Commercio al minute e attivitá assimilate” are exempt from the obligation of issuing e-invoices, unless their customers so request them; on the other hand, those suppliers are required to electronically transmit a daily aggregate report (It.: Scontrino Elettronico). Reporting of cross-border transactions through the SDI in the FatturaPA format is also mandatory.

How does e-invoicing work in Italy?

The tax authority requires all invoices in the Fattura PA XML schema format. Transmission of e-invoices happens through the Sistema di Interscambio. E-invoices must be cleared by the tax authority. The Italian tax authority delivers the legal cleared e-invoice to the recipient.

How do you securely connect with the SdI to issue invoices?

With ease. Our solution connects securely with the SdI, freeing you from the burden of knitting together different systems and platforms.

What is Conservazione sostitutiva?

The Italian mandate for electronic invoicing contains an additional set of requirements for archiving, called conservazione sostitutiva. These requirements are not present in other countries and are not part of the standard scope of SAP Document Compliance.

How do you comply with Conservazione sostitutiva?

The term conservazione sostitutiva refers to a long-term preservation process required for compliant archiving of e-invoices in Italy. E-invoices must be preserved after being archived by grouping them together in a so-called ‘package’, and providing that e-invoice package with a qualified digital signature or seal and a time reference.

This process must be completed no later than three months after the deadline for the submission of the annual fiscal declaration at the end of the fiscal year. E-invoice preservation is an integral feature of Sovos eArchive for invoices stored under Italian law.

 

 

How can Sovos help?

Need help to ensure compliance with all SdI e-invoicing and other VAT requirements in Italy?

Our experts continually monitor, interpret and codify these changes into our software, reducing the compliance burden on your tax and IT teams.

Discover how the Sovos solution takes care of all the evolving CTC e-invoicing, reporting, and compliant e-archiving obligations in Italy.

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Electronic invoicing in Mexico

Mexico has one of the most complex electronic invoicing systems in Latin America. Its scheme, Comprobante Fiscal Digital por Internet (or simply CFDI), was implemented in 2011 as a replacement for the CFD.

Resources such as this overview, carefully detailing the components of the mandate that taxpayers need to consider for compliance, simplify the country’s complex e-invoicing scheme. Be sure to bookmark this page to stay on top of any regulatory changes over time.

Table of contents

1. How does e-invoicing work in Mexico?

2. Characteristics of electronic invoicing in Mexico

3. Types of vouchers in Mexico

4. Format of electronic invoices and documents in Mexico

5. What is the CFDI?

6. Cancellation of CFDIs

7. Timeline of e-invoicing adoption in Mexico

8. Penalties: What happens if I don’t comply with e-invoicing in Mexico?

9. What else do I need for VAT compliance in Mexico?

10. Setting up e-invoicing in Mexico with Sovos

11. FAQ

12. Additional resources

How does e-invoicing work in Mexico?

There is a rigorous set of processes that taxpayers must follow when invoicing electronically in Mexico.

  • The generated XML file must comply, both in terms of format and syntax, with the specifications of the Miscellaneous Tax Resolution in force.
  • The document must pass the validation rules established for both its content and the format of the XML file generated.

It’s mandatory that all electronic documents, including e-invoices, are sent to the PCCFDI (or to the SAT in exceptions) for validation. The invoice must include specific information, as detailed further down the page, to be considered legally valid.

Mexican invoicing law does not require the recipient to confirm it has received the e-invoice, though they must securely store the documents for five years from the time the corresponding tax return was filed.

Characteristics of electronic invoicing in Mexico

Mexico B2B e-invoicing

Mexico has mandated the issuance of electronic invoices between businesses since 2014, though it had voluntary schemes and conditional requirements for specific taxpayers prior to that year.

Organisations must meet set rules and requirements when participating in the country’s e-invoicing scheme.

Mexico B2G e-invoicing

As well as with B2B transactions, Mexico requires businesses to issue electronic invoices when transacting with governmental and public administration bodies.

The process remains the same, and the aforementioned rules apply – failure to meet the specifications of Mexico’s e-invoicing regulations may result in penalties.

Types of vouchers in Mexico

Mexico’s electronic invoice system contains multiple types of vouchers. Among the main ones are:

Income receipt

Issued mainly in sales transactions for which some income is received in cash, check or any other form. Generally, it is for sales of goods and services, including foreign trade operations, but also for donations and income for professional services.

Proof of expenditure

Issued in cases where the company pays or returns money due to refunds, bonuses, discounts or correction of an income voucher. These are equivalent to credit notes.

Transfer certificate

Used to justify the legitimate possession or holding of the goods that must be transferred within the national territory. These CFDI are used as a transportation contract when a company provides transportation of goods to the owner of the goods.

Certificate of payment receipts

Issued whenever a payment is received on a date other than that on which the transaction is made and the CFDI is generated. Their main function is to document a total or partial payment collection.

Withholding and payment information certificates

Used to report on tax withholdings applied at the time of making payments for which a withholding certificate must be issued. This type of certificate also applies when withholdings are made for payments abroad, royalties, sale of shares, dividends or distributed profits, among others.

CFDI Supplements

In addition to the types of invoices or CFDIs mentioned above, Mexican tax legislation requires that when certain transactions are carried out, additional information must be provided specifying the type of transaction in question. This type of additional information is contained in so-called “complementos”, which are attached to the original CFDI. There are more than 20 “complementos”.

In other cases, the requirement to issue a supplement to the CFDI is due to withholdings made at the time of making payments for specific transactions. These supplements are the following:

  • Derivative transactions
  • Disposal of shares
  • Dividends
  • Financial sector
  • Interests
  • Leasing
  • Mortgage interest
  • Non-business trusts
  • Payments to foreigners
  • Prizes
  • Retirement plans
  • Technology platforms

Format of electronic invoices and documents in Mexico

Mexico has a series of unconditional elements that digital documents like e-invoices must include. These features are established in the country’s Tax Code (Código Fiscal), the current Miscellaneous Tax Resolution (Resolución Miscelánea Fiscal, RMF) and its Annexes. Some of the essential components of income CFDIs include:
  1. Header
  2. Item detail
  3. Form and method of payment
  4. Value consigned
  5. Discounts and surcharges
  6. Informative subtotals
  7. Type of payment made
  8. Taxes
  9. Related CFDIs
  10. SAT digital stamp
  11. Signature with a valid advanced electronic signature certificate

What is the CFDI?

CFDI, which stands for Comprobantes Fiscal Digital por Internet, is an e-invoice format mandated by Mexico’s tax authorities. It is also used in select countries across Latin America.

CFDI is effectively an electronic invoice, often also referred to as a digital tax receipt. It provides all necessary details of a transaction, including goods or services provided, associated costs and subsequent taxes.

Mexico’s tax administrative service, SAT (Servicio de Administración Tributaria), approves and certifies these electronic invoices – deeming them legally valid.

The most recent version of CFDI in Mexico is 4.0, which has updated major features of the document. This includes the new requirement to include the sender and receiver’s names, additional fields for exported goods, and a section explaining the reason for a documentation cancellation.

Cancellation of CFDIs

Electronic invoices, or CFDIs, can indeed be cancelled in Mexico. However, with the introduction of CFDI 4.0, the cancellation must be adequately justified and documented, including one of the designated service response codes.

An e-invoice can only be cancelled within the year it was issued – after that, it is impossible to do so. However, each year, the Miscellaneous Tax Resolution establishes the ability to cancel no later than the month in which the annual Income Tax return corresponding to the year in which the receipt was issued must be filed.

Timeline of e-invoicing in Mexico

Mexico’s journey towards electronic invoicing becoming commonplace may have started in the early 2000s, but its e-invoicing scheme is still developing to this day.

  • 2004: Mexico introduces the e-invoice
  • 2010: E-invoicing to tax authorities became mandatory for suppliers with annual turnover exceeding MXN $4,000,000
  • April 2014: E-invoicing became mandatory for all taxpayers
  • 2017: All domestic businesses and VAT-registered entrepreneurs must send e-invoices to the SAT within 72 hours
  • 1 July 2023: Taxpayers must use version 4.0 of CFDI e-invoicing system

Penalties: What happens if I don’t comply with e-invoicing in Mexico?

Failing to meet the requirements of Mexico’s electronic invoicing requirements could lead to penalties.

Taxpayers can expect to receive a fine of:

  • MXN $400.00 – $600.00 for each CFDI issued that is missing the necessary supplements
  • MXN $880.00 – $17,030.00 for not issuing documentation for the transportation of goods
  • MXN $19,700.00 – $112,650.00 for not issuing or delivering the CFDI for their activities or issuing them without meeting the requirements; not delivering or not making available the printed representation of the CFDI when this is requested by its clients; not issuing the CFDI that covers the operations carried out with the general public; not making them available to the tax authorities when required
  • MXN $19,050.00 – $108,880.00 for issuing a CFDI that includes the incorrect tax identification number for the buyer. In the case of a repeat offence, the penalty will consist of the preventive closure of the taxpayer’s establishment for a period of three to 15 days.

In certain cases of recidivism, the Tax Code establishes that the SAT can sanction offenders with the closure of the establishment from where such infractions are committed. Mexican legislation also includes the possible commission of equated tax fraud and smuggling crimes if the provisions regulating CFDI and their complements are not duly observed.

What else do I need for VAT compliance in Mexico?

For taxpayers in Mexico, there are more obligations than just e-invoicing. Tax compliance requires a lot of care and attention, especially for multinational organisations, and it can take up significant internal resources.

FAQ

E-invoicing has been mandatory for all taxpayers in Mexico since April 2014.

Every taxpayer established in Mexico must issue and receive electronic invoices. This has been enforced since April 2014.

Yes, issuers can cancel electronic invoices they have sent to buyers, but there is a time limit on this. The cancellation process has undergone significant updates over the years, but it is still possible.

Once buyers receive a notice from the seller, they have 72 hours to accept or reject an e-invoice cancellation. If the buyer does not respond, the electronic invoice will be cancelled.

By default, the recipient of an invoice must accept its cancellation for it to be admissible; however, according to Rule 2.7.1.35 of the Miscellaneous Tax Resolution, there are 12 cases in which accepting the counterparty is unnecessary.

There is a lot of compulsory information that must be included in an e-invoice in Mexico, including:

  • Tax identification number
  • Buyer name and address
  • Seller name and address
  • Folio number
  • Total invoice amount
  • Type of transaction

Failing to include all required information may result in the SAT issuing penalties.

The use of Mexico’s CFDI 4.0 e-invoicing system has been mandatory since 1 July 2023.

CDFI 4.0 delivered several significant changes to 3.3, including:

  • Changes to the cancellation process for CFDIs
  • The requirement for the fiscal address of both parties
  • A new format for the Retention Receipt and Payment Information

Sovos ensures full compliance with all e-invoicing requirements in Mexico. We are a PAC authorised by the SAT, offering a comprehensive solution to resolve your indirect tax needs, and we support all CFDIs and their complements.

Setting up e-invoicing in Mexico with Sovos

With electronic invoicing becoming more common globally, following the lead of Latin American countries like Mexico, it is important that you prioritise compliance.

The global – yet fragmented – adoption of e-invoicing solidifies the need to choose a single vendor for complete compliance, wherever you do business. Sovos is a tax compliance partner you can trust.

Focus on what truly matters: speak with a member of our team today to begin reclaiming your time.

Complete the form below to speak with one of our e-invoicing experts

Additional resources for e-invoicing compliance

Sovos for SAP

Prepare Your SAP Solutions for the Digital Future of Tax
Learn more

The First Global Solution For E-Invoicing Compliance

Find your global solution to e-invoicing
Learn more

Tax Rules, Mandates and Regulations in Latin America

Find out more about e-invoicing obligations in other countries
Learn more

Post-Brexit: Businesses Must Have a VAT Compliance Plan-of-Action in Place

Brexit is here

UK and EU businesses need to rise to the VAT compliance challenge that Brexit poses. Now more than ever, it’s time to review supply chains and VAT records to trade with EU Member States. The transition period ended on 1 January 2021 and, as a result, trade between the UK and EU is now governed by the Free Trade Agreement announced on Christmas Eve 2020.

While many businesses prepared for Brexit’s impact on customs, many are yet to formulate a strategy to ensure VAT compliance. This is key to the success of any Brexit plan-of-action for the protection of supply chains, allowing companies to continue to trade confidently across Europe.

Get the information you need

Latest Changes

Complemento de leyendas supplements for virtual importation of product components (for example, tires on cars or sugar in soda) are now required for maquiladoras, or American-owned factories operating across the Mexican border.
The process for cancelling a CFDI, or e-invoice, changed in November 2018 and requires suppliers to submit cancelation request instead of credit notes to void a previously issued invoice/CFDI . In addition, it requires the buyer to accept or reject the request within 72 hours
The frequently used supplement of payment, which affects all transactions where a partial or complete payment is received after a CFDI is issued, took effect in September 2018.

Quick Facts: Brexit VAT implications

  • The UK agreed a Free Trade Agreement (FTA) with the EU
  • The FTA doesn’t impact VAT obligations – it affects duty rates, tariffs etc
  • The concept of dispatches and acquisitions will be replaced by exports and imports for trade between Great Britain and the EU since Great Britain is now considered a third country
  • Special rules apply for trade between NI and the EU
  • Special rules also apply for goods moving between Great Britain and Northern Ireland
  • Where there is no postponement or deferment mechanism in place, import VAT becomes an upfront cost to the business
  • UK businesses registering in an EU Member State may require fiscal representation

What’s impacted by Brexit?

  • Exports and imports replace dispatches and acquisitions
  • Potential increased liability to register in EU Member States
  • Increased likelihood of needing fiscal representation
  • Recovery taking place via paper-based systems
  • Reciprocity possibly blocking 13th Directive claims 
eBook

Post-Brexit VAT Rules

Get the latest guidance on how to comply with VAT rules post-Brexit and how to protect cross-border trade.

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VAT post Brexit: What needs to be done?

Although there is a FTA agreement, many problems remain unresolved. As such, businesses must ensure they:
  • Identify all supply chains impacted by Brexit
  • Pay special attention to contracts with Delivered Duty Paid (DDP) incoterms
  • Determine where companies still need to hold VAT registrations in the EUEstablish if there are any new VAT registration requirements
  • Consider customs requirements, such as EORI numbers in the UK and EU
  • Plan for changes necessary to meet VAT reporting requirements
  • Amend ERP systems as appropriate
  • Determine if fiscal representation is needed
Reduce the impact of Brexit

Need help to ensure your business operations can continue?

Businesses on both sides of the channel have much to do to prepare. We know the uncertainty Brexit generates is difficult to manage, so businesses need to be ready.

During this confusion, we can deliver clarity about the Brexit impact on your VAT compliance obligations.

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Sales Tax Nexus

Solve Your Sales Tax Nexus Challenges for Good

The recent Supreme Court decision “South Dakota v. Wayfair” redefined what constitutes economic nexus for your business. Nexus is no longer determined by your physical presence in a state. Your economic nexus obligations are now based on the sales revenue and transaction volume you generate in a given state, regardless of your physical presence there.

This ruling is a massive opportunity for states to generate revenue. And they’re taking full advantage in the form of aggressive enforcement.

Schedule a demo to learn more.

Economic Nexus State Updates

As of October 2019, only two states remain without economic nexus laws. This means your business has up to 48 different sales revenue and transaction volume thresholds to keep track of in case of an audit.

In November 2019, the state of California began sending out “thousands of notices” to third-party merchants on Amazon that have failed to meet their nexus obligations.

Could this be the beginning of a nation-wide trend?

Schedule a demo to learn more
The Challenge

What to expect for the future

Nine more states (including Louisiana) have gone live with economic nexus laws since July 2019. Kansas currently has its economic nexus law (intended to take effect 10/1/2019) in dispute.

Full state-by-state sales tax nexus breakdown

Sales tax nexus by state

 

Streamlined, accurate filing in every jurisdiction

The Wayfair ruling forever changed the sales tax landscape for online retailers in the U.S., further complicating an already complex compliance environment. But that doesn’t mean your company is condemned to noncompliance.

Sales & Use Tax Filing

Sovos Sales & Use Tax Filing relieves the burden caused by new and varying sales tax nexus rules by automating your sales and use tax filing obligations. This gives you peace of mind knowing your filings will be on time and accurate, and you’ll have more time to focus on other critical tasks.

Sales & use tax filing

Schedule a demo to see how Sovos can solve your sales tax nexus filing challenges for good.
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Electronic invoicing in Brazil

Brazil is widely regarded as a major player in the world of electronic invoicing, largely due to the sheer number of electronic tax documents and e-invoicing models it has in place. If you’re a taxpayer in Brazil, you will have to issue electronic invoices.

From electronic transport invoices to standard e-invoices for tax, there is a lot to consider when operating in Brazil. This page has all the electronic invoicing information you need to be aware of your obligations and will be updated when necessary, so bookmark the overview to add it to your compliance toolkit.

Table of contents

1. How does e-invoicing work in Brazil?

2. Characteristics of electronic invoicing in Brazil

3. Format of electronic invoices and documents in Brazil

4. NF-e invoices

5. NFS-e invoices

6. What is the CT-e | Electronic Transportation Invoice?

7. E-signature requirements in Brazil

8. Timeline of e-invoicing adoption in Brazil

9. Penalties: What happens if I don’t comply with e-invoicing in Brazil?

10. What else do I need for VAT compliance in Brazil?

11. Setting up e-invoicing in Brazil with Sovos

12. FAQ

13. Additional resources

How does e-invoicing work in Brazil?

While there are several e-invoice types in Brazil, there is a general process that taxpayers need to follow when issuing invoices electronically. While some steps may vary per invoice type, the process often includes:

  • Applying for a digital signature
  • Generating an electronic invoice in XML format
  • Submitting the invoice via web service to SEFAZ (Secretaria da Fazenda Estadual)
  • Sending the invoice to the customer

Characteristics of electronic invoicing in Brazil

Brazil B2B e-invoicing

In Brazil, issuing electronic invoices – of which there are several types – is mandatory for all taxpayers. If a business is established in Brazil and supplies goods or services, it must participate in the country’s e-invoicing initiatives.

There are numerous electronic invoicing systems in Brazil, and the product category of goods supplied dictates which system will be used.

Brazil B2G e-invoicing

E-invoicing is mandatory for all established businesses in Brazil, including when issuing invoices to governmental and public administration entities.

Format of electronic invoices and documents in Brazil

Brazil has a complex, somewhat fragmented e-invoicing system that requires taxpayers to use specific systems – depending on the category of the goods or services they supply. To ensure compliance, organisations and persons alike must be aware of what’s required of them when issuing an electronic invoice.

While there are several e-invoice types in the country, there are specific characteristics of electronic invoices. Electronic signatures are required no matter the invoice type, and the documents need to be securely archived for five years. Each invoice type is in a structured XML format, and they need to be validated by the Brazilian tax authorities before being issued to the buyer.

NF-e invoices

The NF-e electronic invoice is Brazil’s standard electronic invoice for documenting the transaction of goods and services.

It is issued electronically to the buyer and the Brazilian government. To be deemed legitimate, NF-e e-invoices must be validated by the tax authority.

NFS-e invoices

Unlike Brazil’s standard electronic invoice, NFS-e e-invoices document the transaction of services. Like NF-e e-invoices, NSF-e documents must be transmitted electronically and validated by the Brazilian government.

What is the CT-e | Electronic Transportation Invoice?

CT-e documents are also known as electronic transportation invoices. These e-invoices document the transportation of goods in Brazil via:

  • Air
  • Pipeline
  • Rail
  • Road
  • Water

When using a transport service that is external to the company fulfilling the transaction, the buyer must validate the CT-e e-invoice and list it in its monthly report to the government.

E-signature requirements in Brazil

Brazil requires e-invoices to be protected by an electronic signature. This technology irrefutably proves the signing parties’ identity and the document’s integrity.

Once signed by the seller and the buyer, the e-invoice is considered valid from both a legal and fiscal standpoint – especially considering that invoices are also validated by the tax authorities.

Timeline of e-invoicing in Brazil

Brazil was an early adopter of electronic invoicing, though the implementation took time. Here are the key dates of the country’s e-invoicing implementation:

  • 2005: Brazil publishes its first e-invoicing legislation, introducing a clearance model
  • 2008: Taxpayers became obligated to issue electronic invoices
  • 19 April 2023: Electric energy e-invoices (NF3-e) are introduced, with staggered implementation of mandated use
  • 1 September 2023: Individual micro-entrepreneurs (MEI) that are not subject to Interstate Sales Tax (ICMS) are obligated to issue e-invoices

Penalties: What happens if I don’t comply with e-invoicing in Brazil?

There is a price to pay for failing to comply with Brazil’s e-invoicing regulations. Drastic cases of non-compliance may be considered a criminal offence, such as tax evasion.

Taxpayers can be charged a financial penalty of up to 100% of an invoice’s value or transaction price should they fail to issue an e-invoice. This same penalty may apply if electronic invoices do not meet legal and technical requirements.

What else do I need for VAT compliance in Brazil?

While you must stay on top of your e-invoicing regulations in Brazil, additional tax compliance considerations exist.

We have a dedicated page for Brazil VAT Compliance that is a companion tool to this e-invoicing overview, carefully detailing other tax-related regulations that may apply to you.

FAQ

E-invoicing is mandatory for all established taxpayers in Brazil.

All established taxpayers in Brazil are required to issue electronic invoices.

Electronic invoices can be cancelled in Brazil, but the time required may differ depending on the taxpayer’s state of operation.

Generally, an electronic invoice for goods can be cancelled within the first 24 hours of its validation by the Brazilian tax authorities. That said, this may differ state-by-state, so verifying the deadline with the SEFAZ is important.

As a rule, the NF-e must contain registration data such as CNPJ (National Register of Legal Entities), address and other data of both the issuer and recipient, as well as information such as product code, description, quantity, unit value and details about taxes such as ICMS, IPI, PIS, COFINS, among others, and a valid digital signature. Electronic invoices must be in XML format.

Setting up e-invoicing in Brazil with Sovos

With electronic invoicing becoming more common globally, following the lead of Latin American countries like Brazil, it is important to prioritise compliance.

The global – yet fragmented – adoption of e-invoicing solidifies the need to choose a single vendor for complete compliance wherever you do business. Sovos is a tax compliance partner you can trust.

Focus on what truly matters: speak with Sovos today to reclaim your time.

Complete the form below to speak with one of our e-invoicing experts

Additional resources for e-invoicing compliance

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Tax Rules, Mandates and Regulations in Latin America

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Greece myDATA

In 2020, Greece introduced a continuous transaction controls (CTC) scheme, called myDATA – an e-audit system. myDATA requires taxpayers to transmit transactional and accounting data to the tax administration, in real-time or periodically, which populates a set of online ledgers maintained on the government portal.

The goal of myDATA is for the online ledgers to be the only source of truth of the taxpayer’s tax and financial results, and for their respective information to pre-fill the taxpayer’s VAT returns and financial statements.

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Table of contents

1. Greece myDATA quick facts

2. What information must be declared in the myDATA portal?

3. What are the myDATA filing submissions?

4. What types of documents must be reported by issuers and recipients for myDATA?

5. Greece myDATA rollout dates

6. Penalties

7. Sovos helps to stay compliant with Greece’s myDATA

8. FAQ Greece myDATA

9. Additional resources

Greece myDATA quick facts

  • The myDATA scheme applies to Greek taxpayers obligated by law to keep their accounting records as per the Greek Accounting Standards. It covers B2B, B2G, and B2C transactions.
  • myDATA eBooks record: a summary of income and expense transactions, classifications of transactions, accounting adjustments which aim to provide a comprehensive overview of the taxpayer’s accounting and tax results.
  • When businesses file their tax returns, the data declared in them will be reconciled against the data in the eBooks.
  • A discrepancy between the eBooks and the tax returns triggers a two-phased reconciliation process whereby the taxpayer should correct the resulting difference, otherwise audits or penalties will be incurred.

What information must be declared in the myDATA portal?

The myDATA portal requires the reporting of:

  • Transactional data: e.g. B2B, B2G, B2C invoices, credit notes, debit notes
  • Accounting data: data which forms the accounting and tax results of businesses on the myDATA portal, e.g. payroll, depreciations, amortisations

Suppliers and buyers must each classify transactions into subcategories, such as revenue from the sale of goods, expense from acquisition of services, revenue from provision of services, expense from amortisation, expense from intracommunity purchase of goods, etc.

What are the myDATA filing submissions?

The required data must be reported in different filing frequencies depending on the type of data and the data transmission method.

In principle, myDATA filing frequencies are:

  • Revenue: reported in real-time
  • Expenses: reported periodically following the deadlines for the submission of the VAT return (monthly or quarterly)
  • Other accounting entries (revenue or expense): reported bi-monthly (payroll) or yearly (e.g. accounting adjustments, depreciations).

Data transmission methods can include ERP, manual upload and the central e-invoicing application (timologio).

What types of documents must be reported by issuers and recipients to myDATA?

Issuers and recipients must report different documents to myDATA.

Issuers:

Issuers must report revenue from the different types of transactional and accounting documents they issue. Examples of documents issuers need to report include B2B/B2G/B2C invoices, transport documents, payroll, depreciation, contracts etc.

Recipients:

Recipients must report expenses from different types of transactional and accounting documents they receive. Examples of documents recipients need to report include domestic B2C invoices, B2B/B2C invoices from foreign suppliers, utility bills, credit notes, payroll, amortisations, contracts, etc.

Additionally, if domestic issuers have not reported their required data to the myDATA platform, recipients must report them as omissions or deviations.

All businesses:

All businesses (issuers and receivers) must send classifications for their transactions, e.g. as revenue from sale of goods, expense from acquisition of services, expense from amortisation, expense from intracommunity purchase of goods etc.

Greece myDATA rollout dates

  • 20 July 2020: E-invoicing and reporting through accredited e-invoicing vendors begins
  • 1 October 2020:  Voluntary reporting of revenue and expenses begins, as well as classifications through all reporting methods
  • 1 October 2021:  Phase 1 of mandatory myDATA requirements begins, for revenue and certain taxpayers.
  • 1 November 2021: myDATA scope extended to include revenue and all taxpayers.
  • 1 January 2024: myDATA law applies for all data in scope generated in 2024, with few exceptions.
  • 2 June 2025: Mandatory submission of transport document data to myDATA applies to the first two groups of obliged taxpayers (gross revenue exceeded EUR 200K based on their 2022 income tax return or operating in certain fields, such as fuels, pharmaceuticals, construction materials, or olive oil production as their main revenue activity in 2022).
  • 1 December 2025: Mandatory submission of transport document data to myDATA applies to all taxpayers under the myDATA.

For the latest deadline changes, follow our Greece myDATA blog for updates.

Penalties

Failure to achieve consistency between the data registered in the e-books and the reported data in the tax returns triggers penalties or tax audits.

Penalties were established in December 2023, through Law 5073/2023 (FEK A’ 204) on “Measures for the limitation of tax evasion and other urgent provisions” in the event of failure and overdue submission of the required data, as well as in the event of violation recurrence within five years.

The penalties relate only to violations of the compliant reporting of income from invoices and other accounting entries (not expenses), as well as the recently introduced e-transport document.

The implementation timeline and other details about the adopted penalties is yet to be published.

How Sovos helps to stay compliant with Greece's myDATA

Sovos serves as a true one-stop-shop for managing VAT compliance obligations in Greece and CTC compliance obligations across the globe. Sovos uniquely combines local excellence with a seamless, global customer experience.

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FAQ

Reporting and transmission of data to the myDATA platform is currently mandatory for taxpayers. Expansion of myDATA obligations is ongoing, with, e.g., the implementation of mandatory submission of transport document data, and deadlines and requirements continue to be updated.

The myDATA scheme applies to Greek taxpayers obligated by law to keep their accounting records as per the Greek Accounting Standards. It covers B2B, B2G, and B2C transactions.

The required documents are reported to myDATA through the following methods: the ERP, e-invoicing via accredited service provider, manual upload, central e-invoicing application (‘timologio’), fiscal devices (FIM).

Related resources

Greece e-invoicing

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Greece VAT Compliance

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