Spain steps closer to mandatory B2B e-invoicing

The Ministry of Economic Affairs and Digital Transformation in Spain has recently published a preliminary draft law for the creation and growth of companies in the country. This law aims to promote productive investment, innovation, and modernisation, with regulatory reforms to improve the business climate and promote entrepreneurship.

The new project also aims to fight late payments by promoting the use of electronic invoicing between companies and freelancers.

Introduction of mandatory B2B e-invoicing in Spain

As a fundamental measure, the draft law targets electronic invoicing and plans to modify current regulations.

The draft law expands the obligation to issue electronic invoices to all companies and freelancers in their commercial relationships, which will also guarantee greater traceability and control of payments between companies.

This measure will also allow the Spanish authorities to obtain reliable information to monitor the effective payment terms – an essential requirement to reduce late payments effectively.

The main rules of the draft law related to e-invoicing establish that:

• All companies and freelancers must issue and send electronic invoices in their commercial relationships with other companies and freelancers.
• Companies and freelancers must facilitate access to the necessary programs so that the recipients of the invoices can read, copy, download, and print the electronic invoice.
• The recipients of the invoices may consult them by electronic means for at least four years.
• Not offering customers the possibility of receiving electronic invoices and allowing its access to customers will constitute an administrative offense that may be sanctioned.
• Electronic invoices must comply, in any case, with the provisions of the invoicing regulations.

The transition period to adopt the new e-invoicing obligations

The Spanish Government acknowledges that the invoice digitization process requires a grace period for businesses, due to the tremendous effort this transition entails, particularly for smaller companies.

Therefore, according to the draft law, companies and freelancers whose annual turnover is less than €8 million will have a transitional period of three years after the law is published in the Official State Gazette (BOE) to comply. At the same time, large companies with an annual turnover above that threshold will have only one year for the compulsory e-invoicing transition.

Next steps

The preliminary draft law is currently open for public consultation until 6 September 2021. The Spanish Government is expected to pass this draft, or its amended version, to Congress to comply with the formal legislative process.

After this, the Government may have to work on the regulatory framework to establish the information and technical requirements for electronic invoices as well as security, control, and standardisation measures relating to the devices and computer systems that generate these documents.

Companies and freelancers in Spain that are not issuing electronic invoices already must get ready to comply with this imminent new requirement.