This blog was last updated on November 15, 2023
As business-to-government compliance continues expanding across Europe, Spain is following LATAM’s electronic invoicing model as one of the first European countries to adopt automation in efforts to maximize tax collections. Starting July 1, 2017, the “Suministro Inmediato de Información,” known as the SII, will require certain businesses in Spain to electronically submit transactional invoice data for both sales and purchases to the AEAT (Spain’s tax authority).
It is no surprise that European countries are beginning to implement compliance regimes similar to those across Latin America, as the region’s invoicing model has shown significant success in increasing tax revenues. In just the first year of mandated e-invoicing for multinationals, Brazil increased tax collections by $58 billion USD and Mexico increased tax revenues by 34%.
While the SII is different than Latin American electronic invoicing model in some ways, it was created with the same objective: eliminating tax fraud in order to maximize tax collections. Spain is also following Latin America’s timeline for implementation, mandating large companies with revenues greater than 6 million euros and/or those that fall under certain VAT segments to implement e-invoicing first.
Starting July 1, companies impacted by this new mandate will be required to submit a real-time transactional invoice data from their sales and purchase to the AEAT in a standardized XML format. This data, combined with intra-EU operations and investment of goods reporting, will enable tax authorities to triangulate the data. That is, by centralizing the information from both the supplier and buyer in one place – the government’s database – tax authorities can better identify any errors or discrepancies in the reports submitted. For companies impacted in Spain, this means reporting accuracy will now be more critical than ever to defend against an audit.
Some of the characteristics of the SII that parallel the Latin American e-invoicing model are:
- Documents must be structured in an XML standard defined by the government.
- Transactional invoice data and reports must be submitted to the tax administration in real-time or within a specified time frame.
- XML messages are electronically submitted via web services.
- The XML must be stamped with “Digital Certificate” to authenticate document.
- Errors may be found at the “book level” or “per invoice.”
- Validations are both technical and operational in nature.
- There is a unique code (CSV) per invoice, which is made up of the tax ID of the issuer, serial number of the invoice and date of issue
As Juan Francisco Redondo Sánchez from the CIAT states, “In short, Spain opts for a different solution; a distinct path from the one undertaken by electronic invoicing models, but that leads us to the same destination: improving voluntary compliance of tax obligations.”
To learn more, watch our recent webinar on-demand: “Spain Launches Real-Time Transactional E-Invoice Reporting” and contact us to see how you can proactively prepare your business for e-invoicing in Spain.
