The Chilean Internal Revenue Service (SII) recently published version 4.00 of the document describing the format of electronic tickets for Sales and Services.
The electronic ticket (or Boleta Electrónica) is an electronic receipt issued for the sale of goods or services to individuals, consumers or end users.
The document includes basic information about the transaction, such as:
The electronic ticket is for less formal, business-to-consumer (B2C) transactions and is subject to less rigorous reporting requirements than electronic invoices (Factura Electrónica). It is often used for smaller transactions, such as retail purchases or services rendered to individuals.
Businesses must use certified invoicing software to generate electronic tickets. These software solutions need to be approved by the Chilean tax authority, the Servicio de Impuestos Internos (SII).
The generated electronic invoices must be digitally signed using an electronic signature to ensure their authenticity and integrity.
Taxpayers authorised as issuers of electronic tickets must digitally send all the electronic tickets issued and generated to the SII. These should follow the Technical Instructions provided in Annex 1 of Resolution 74 of 2020, and any future updates.
In accordance with the Technical Instructions, the electronic ticket must contain the following information:
After generating the electronic tickets, businesses submit them to the SII. Since the SII must validate both the XML format of the document and its electronic signature, the SII has established a limit of 500 ballots per batch.
On the other side of the transaction, the recipient of an electronic ticket can access and verify the invoice through the SII’s online platform. They can accept or reject the invoice, which helps maintain transparency and accurate transactions.
The data generated by this electronic receipt system drives efficiency. For example, businesses can obtain important information, such as:
Businesses must maintain records for six years in the XML format established in version 4.00.
Non-compliance with the electronic invoicing requirements or submitting inaccurate information can lead to penalties. The SII has the authority to audit businesses to ensure compliance with tax regulations.
Are you in financial services or working at a bank with more questions about invoicing in Chile? Speak to our tax experts.
Update: 15 September 2023
In a recent meeting of the Communauté des Relais, the tax authority released additional details surrounding the previously communicated postponement of the B2B e-invoicing mandate in France.
This delay is a result of the tax authority listening to feedback from French businesses who have struggled to meet the original timeline. It’s further evidence, as previously iterated by the ICC of just how much time and effort is required for most businesses to compare for the complexities of a new mandate.
While the formal dates are still to be defined, the revised main timeline was presented as part of a roll-out in 3 stages:
2024: The authorities will publish the first list of officially registered service providers (PDPs – Plateformes de Dématérialisation Partenaires) by the spring of 2024. During the course of 2024, the development of the public portal (PPF – Portail Public de Facturation) will be completed.
2025: During this year, a large-scale pilot project, involving companies of all sizes will be conducted. The tax authority views this pilot as an opportunity for taxpayers to fine-tune their e-invoicing and e-reporting processes and systems to comply with what has grown to be, a complex and sophisticated CTC framework.
2026: The roll-out of the obligation for the entire economy will largely take place during 2026. However, at what pace remains to be seen once the Finance Law is adopted by Parliament at the end of 2023.
Businesses impacted by the French mandate, headquartered in France and elsewhere, will now be in a better position to successfully comply with the new reform, assuming they make use of the added time provided by the French authorities. In particular, by proactively using the pilot program to build confidence and knowledge on the critical path to readiness. For the largest taxpayers facing these obligations, it would be prudent to regard these changes as a mere 6-month postponement, with the beginning of the pilot program acting as the de facto starting date. To understand the full impact on their business processes and data flows, companies will need to thoroughly test up to 36 use-cases. The many software vendors helping companies to streamline their purchase-to-pay and order-to-cash processes will certainly be eager to test the compliance of their solutions as early as possible in what has become a completely new ecosystem.
Participation in the extended pilot, with professional support from Sovos, provides a risk-free environment to assess and then conduct the essential finetuning.
Sovos is one of the first 20 candidates for service provider (PDP) accreditation in France, and as such will be ready to sustain our customers as they take the numerous steps needed to fully comply with the new CTC framework, drawing on its rich experience of keeping customers compliant with complicated e-invoicing obligations around the world.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
10 August 2023
The French Directorate General of Public Finances (DGFiP) officially postponed the implementation of the country’s electronic invoicing mandate on 28 July. The postponement is in order to provide necessary time for taxpayers to comply with the mandate.
The latest official word states that the revised timeline for the mandate will be provided within the framework of the Finance Law for 2024. We expect this law to be adopted in late 2023.
In addition, on 31 July the DGFiP published updated ‘External specifications file for electronic invoicing’(version 2.3). Despite deferral of the initial go-live, these updates demonstrate the authorities’ commitment to developing the mandate and set the expectation that preparations by taxpayers, vendors, PDP candidates and professional organizations must continue.
The French Mandate is one of the most complex tax digitization initiatives seen in EMEA to date. It’s essential that companies continue their preparations. Compliance with this mandate requires readying applications, processes and systems to a complex set of requirements. According to the ICC, businesses need at least 12-18 months to prepare for the shift to e-invoicing and e-reporting.
Please note that this information is subject to any further updates or changes from the French authorities and no further details are available at present. We will communicate any additional information once it is made available.
Sovos is experienced in helping our customers navigate digitization regulations around the world, including the French Mandate.
Looking for more information about how to comply with the French Mandate? Contact our expert team.
In October 2022, the Malaysian Ministry of Finance announced in its state budget plans to launch a pilot e-invoicing program in 2023 – starting with selected taxpayers.
The budget statement views e-invoices as the main strategy to improve the country’s tax revenue and digital services infrastructure. The Inland Revenue Board of Malaysia (IRBM) and the Malaysian Digital Economy Corporation (MDEC) have been working on the e-invoicing project to meet this goal. They have organised engagement sessions with stakeholders to share details regarding the project.
Following the engagement sessions, the IRBM has published a guideline regarding the implementation details of the upcoming e-invoicing system. The Malaysian e-invoicing system will be a CTC clearance model scheduled to begin in June 2024, with approximately 4,000 companies exceeding the determined threshold.
Read this blog for more information about e-invoicing in Asia.
The new e-invoicing system, called MyInvois, will require all taxpayers engaged in commercial activities to issue invoices electronically in Malaysia. This applies to all individuals and organisations including, but not limited to, associations, corporations and limited liability partnerships.
The transactional scope of the requirements covers all B2B, B2G and B2C transactions – both domestic and cross-border.
The following will be subject to e-invoicing:
A separate guideline will provide further details on the treatment of cross-border transactions.
B2B and B2G e-invoicing will follow a similar workflow, as described below.
For B2C transactions where end consumers do not request e-invoices, suppliers will be allowed to issue receipts or invoices as per the current practices. However, taxpayers must aggregate the receipts or invoices issued to consumers and report them through the e-invoicing system within a set timeframe.
To generate e-invoices, taxpayers must use the MyInvois platform through the free solution provided by IRBM or via APIs. The authentication with the platform is based on digital certificates issued by IRBM.
Taxpayers must create and submit their e-invoices in either XML or JSON format to the MyInvois platform. After successful submission, the platform performs schema checks and assigns a unique ID to each e-invoice.
It’s important to understand that the exchange of e-invoices will not be handled by the MyInvois platform. Instead, suppliers will be responsible for including the validation link provided by IRBM, in the form of a QR Code, on the e-invoice and sending it to buyers. Buyers will utilise this QR Code to validate the existence and status of the e-invoice via the MyInvois platform.
The roll-out of the mandate will follow this schedule:
The annual turnover or revenue will be based on audited financial statements or tax returns from 2022. Once a taxpayer’s implementation timeline has been set using the 2022 financial statements, any subsequent changes to their annual turnover or revenue will not impact their go-live date.
With more detailed information now available about the implementation of e-invoicing in Malaysia, taxpayers must begin preparing their systems for the upcoming changes.
In Q4 2023, the IRBM is set to release a Software Development Kit including the relevant technical documentation and APIs. Furthermore, additional guidance on certain aspects of the implementation and anticipated legislative changes are expected in due course.
Looking for further information on e-invoicing in Malaysia? Contact our expert team.
The Portuguese government has been working on introducing mandatory B2G (Business-to-Government) electronic invoicing in recent years, alongside other obligations for the digitization of VAT compliance in the country.
This aligns with the European Union’s efforts towards harmonising the adoption of e-invoicing in public procurement. To achieve this goal, the EU has implemented Directive 2014/55/EU to outline the responsibilities and criteria for e-invoicing in public procurement processes. The EU requires Member States to enforce an obligation for the Public Administration to receive invoices electronically.
However, several Member States, such as Portugal, have taken a step forward by making the issuance of electronic invoices mandatory for suppliers of the Public Administration. The Portuguese mandate, known as “Electronic Invoicing to the Public Administration” (Fatura Eletrónica à Administração Pública – FEAP), was introduced to streamline invoicing processes and improve efficiency in transactions between businesses and the public sector.
In Portugal, Law Decree 111-B/2017 and subsequent amendments established the beginning of the obligation to issue, receive and process electronic invoices in public procurement. ESPAP (Entidade de Serviços Partilhados da Administração Pública) is the Portuguese entity responsible for the implementation and management of B2G e-invoicing.
This obligation is also present in the Public Contracts Code and requires suppliers of the Public Administration to issue all invoices to public sector entities in electronic format. This excluded contracts declared secret or accompanied by special security measures and contracts concluded following the simplified direct award process (contracts below EUR 5,000).
The implementation of this regime was gradual, starting with the mandatory receipt of electronic invoices by the Public Administration in April 2019. This was followed by a phased introduction of compulsory issuance of e-invoices for suppliers of the Public Administration, starting with large companies in January 2021. The implementation calendar has been postponed several times for small, medium and microenterprises. Currently, only large companies are required to issue invoices electronically.
An e-invoice, according to the EU Directive on e-invoicing in public procurement, is an invoice issued, transmitted and received in a structured electronic format.
Electronic invoicing requires data creation in a structured format and its transmission from the seller’s system to the buyer’s system in an automated manner. As a result, the invoice can be automatically imported into the public entity’s system.
As per Portuguese regulations, the e-invoicing model to be adopted is the semantic data model proposed for the Portuguese standard known as CIUS-PT. There is no obligation to send a PDF document attached to the electronic invoice. An invoice in PDF format is not considered an electronic invoice as they do not comply with European standards.
Suppliers must also archive electronic invoices and ensure they are accessible for the period required by the tax authority, which is typically 10 years.
Considering the general obligation to issue e-invoices in the B2G sector, it is possible to identify four main legal consequences for non-compliance with this legal obligation:
Currently, all public administration entities are obligated to receive e-invoices in the structured CIUS-PT format. Additionally, all large company suppliers to the public administration must issue e-invoices in the same format.
Although B2G e-invoicing became mandatory on 1 January 2023, Law Decree no. 54/2023 published in July 2023 postponed the obligation for micro, small and medium-sized enterprises once again – granting taxpayers a new deadline for compliance.
The postponement was first announced during the press conference of the Council of Ministers, without a new deadline for the entry into force of the obligation. However, with the decree’s publication, the new deadline of 31 December 2023 has been established.
Until then, micro, small and medium-sized companies can use invoicing mechanisms other than e-invoicing in the structured CIUS-PT schema when contracting with the Public Administration.
Need more information on B2G e-invoicing in Portugal? Speak with our expert team.
The Electronic Invoicing Law of the Dominican Republic was published on 17 May 2023, mandating e-invoicing throughout the territory as of 18 May 2023.
The law was published in the Official Gazette, whose purpose is to regulate the mandatory use of electronic invoicing in the Dominican Republic, including the establishment of the electronic invoicing tax system and its characteristics, optimisation results and contingencies, as well as the entry periods and tax facilities that taxpayers who take advantage of this system will be granted.
The law includes a Chapter on the Criminal and Tax infractions and penalties for non-compliance and still allows using paper invoices for certain contingencies.
The law applies to natural and legal persons, public or private. It’s also applicable to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.
All electronic invoice issuers in the country shall:
The requirement for holographic or handwritten signatures and commercial seals for electronic invoices is fulfilled by using digital signatures supported by a digital certificate.
Electronic invoices cannot be modified once signed digitally and sent to the DGII.
The electronic invoice must comply with the standard format established by the tax authority, which will be validated by computer systems. E-invoices will only be admissible when they comply with this validation.
Electronic invoices will be sent to the authority and the electronic receiver through electronic applications connected to the internet and in an XML file.
The electronic invoice will have a Printed Representation (RI) of the E-CF which will be delivered as a physical document to non-electronic receivers in exceptions. Otherwise, it will be delivered to electronic receivers when they are in contingency so that they can prove and report purchase transactions to the authority and third parties – as well as support tax credit or consumption, and keep the indicated documents as established by current legislation.
The General Directorate of Internal Taxes (DGII) will be the competent authority for validating and certifying the content and integrity of the electronic invoice.
The Electronic Invoicing Tax System is administered by the DGII and will be used to validate and accredit all electronic tax receipts resulting from electronic invoices. It will also validate legal forms or electronic tax documents that modify them and that serve as support to back up expenses and tax credits.
The DGII is also responsible for ensuring the integrity of information that is sent instantly for validation and the accreditation of electronic tax receipts (E-CF).
The three forms of Issuance of Electronic Tax Receipts (E-CF) are as follows:
The electronic tax receipts sent to the DGII will be validated online through the information system, according to the schemes published by the technical documentation and complementary standards that define their structure and behaviour.
Once they’ve been compared and validated against the criteria, the DGII will respond by delivering a response number identified as “trackID” with which the E-CF issuer can consult the document’s status.
There are 10 types of electronic tax receipts or documents as part of the law. These include:
All E-CFs must have an electronic tax receipt number (E-NCF), authorised by the DGII, which consists of an alphanumeric sequence.
The number and type of electronic tax receipt numbers will be authorised according to the economic activity registered in the National Taxpayer Registry (RNC), operational volume, and level of compliance of the taxpayer – as well as the risk profile of the taxpayer, in accordance with the parameters established by the DGII.
The duties required of electronic issues, in order, consist of:
The standard format for the structure of E-CFs is as follows:
Taxpayers must indicate data that modifies or affects electronic tax receipts of credit and debit notes.
The DGII will publish the list of taxpayers required by law to issue E-CF. With the approval of the DGII, taxpayers may agree to extend the deadline for compliance with electronic invoicing regulations.
A voluntary period is provided for all taxpayers who wish to be issuers of electronic invoices before implement the previous calendar. The DGII is providing incentives consisting of tax credits for MIPYMES and Large National Taxpayers.
Looking for further information on e-invoicing in the Dominican Republic? Contact our expert team.
The Spanish government has published the much-anticipated draft regulation with the framework for implementing mandatory B2B e-invoicing.
The proposed legislation outlines the operation of the Spanish e-invoicing system. Its main feature is the reliance on the principles of interoperability of e-invoice formats and interconnectivity of e-invoicing platforms. The goal is to promote digitalization (particularly for smaller companies), reduce late invoice payments and save on administrative costs such as the management of invoices.
The draft Royal Decree provides further details to the Law for Creation and Growth of companies published in September 2022, which initially establishes the e-invoicing obligation for companies and professionals.
All companies and professionals required to issue invoices under Spanish law will be obliged to do so electronically. This applies to B2B operations with a few excluded transactions, such as: when issuing a simplified invoice, issuing an invoice voluntarily when there is no such obligation to do so under Spanish rules and in other cases that the government may regulate in the future.
However, the obligation does not apply if one of the parties to the transaction does not have an established business, a fixed establishment or habitual business residence in Spanish territory where invoices are directly issued.
The Spanish e-invoicing system will consist of privately owned electronic invoicing platforms and the public electronic invoicing solution managed by the State Tax Administration Agency. Taxpayers under scope must send and receive e-invoices through one of these two means and will be able to use both in parallel.
Other important characteristics and requirements of this system are:
The proposed Royal Decree defines an e-invoice as a structured document, which means that a PDF will no longer be considered an electronic invoice. Taxpayers will be required to issue e-invoices using one of the accepted formats:
Additionally, in line with the principle of interoperability, private e-invoicing platforms must be able to convert e-invoices into all supported formats while preserving I&A.
The invoice recipient must communicate the e-invoice status to the invoice issuer within the maximum deadline of four calendar days counted from the date of the reported status.
Mandatory statuses comprise the following:
Additionally, the draft regulation establishes optional statuses:
The Royal Decree is currently in draft form but will be effective 12 months after its official publication on the Spanish Official Gazette (BOE). Following the Law for Creation and Growth of companies, the 12-month-timeline will apply to entrepreneurs and professionals whose annual turnover is over €8 million, and for the remaining taxpayers under scope the deadline is 24 months.
In the first year from the regulation’s effective date, companies under the e-invoicing obligation must attach a PDF file to the legal e-invoice to ensure readability to counterparties not yet in scope – unless the recipient agrees to receive it in the original format.
The obligation to report the e-invoice statuses will come into effect 36 months after the publication of the Royal Decree for entrepreneurs with an annual turnover below €6 million and 48 months after the publication of the Royal Decree for professionals below the same threshold.
Further details are expected concerning how taxpayers under the SII (Suministro Imediato de Información) mandate must inform the mandatory e-invoice statuses.
As this is still a draft and certain details remain to be established, taxpayers can expect changes before publication of the final version. Additionally, until 10 July 2023, the draft regulation is open for comments from the general public.
Another important note is that the entry into force of this draft Royal Decree is subject to Spain obtaining derogation from Articles 218 and 232 of the EU VAT Directive before the EU Commission. Although this is a formal step and there is no indication that the Commission would not grant the derogation, until it happens the new Spanish rules cannot enter into force.
Looking for further information on e-invoicing in Spain? Contact our expert team.
According to the latest global market report, Billentis, the Asia Pacific region is expected to achieve the highest annual e-invoice volume growth rates compared to Latin America and Europe until 2025. This is mainly because the Asian market is new to the tax digitization journey (except for South Korea) and is accelerating the adoption of e-invoicing as an effective measure for VAT control.
Though the types of e-invoicing strategies implemented in the APAC region vary greatly, we can also identify some common characteristics.
There are jurisdictions with a strong common law legacy, such as Singapore and Japan, which typically focus regulatory measures on record retention. In recent years, many of these countries have started gearing up toward regulating e-invoicing issuance (notably by adhesion to the PEPPOL system), e.g., Singapore. Associated national standards have been adopted for a wide range of e-invoicing flows for B2B and B2G scenarios.
Conversely, Latin American clearance models and continuous transaction controls (CTCs) influence some countries. Examples of jurisdictions with CTCs are China and Taiwan.
More countries aim to introduce a staged approach to mandatory e-invoicing or CTCs in the coming years. Notable examples are Saudi Arabia, which in January 2023 introduced a clearance regime in multiple phases for different taxpayer groups, and Vietnam, which will be doing the same in the coming years.
Here’s a highlight of the recent e-invoicing developments in Asia Pacific.
In October 2022, the Malaysian Ministry of Finance announced in their state budget plans to launch a pilot e-invoicing program in 2023, starting with selected taxpayers. The budget statement views e-invoices as the main strategy to improve the country’s tax revenue and digital services infrastructure.
The Malaysian Inland Revenue Board (HASIL) and the Malaysian Digital Economy Corporation (MDEC) recently shared details regarding the project in engagement sessions.
Malaysia appears to be following a CTC clearance model, such as the one implemented in Italy, where e-invoices must be sent to the tax authority in real-time to obtain validation before being delivered to buyers. The scope of the system will likely cover all domestic (B2G, B2B and B2C) and cross-border transactions.
Following the engagement sessions, HASIL published a press release on 22 May 2023 and announced the implementation timeline of the upcoming e-invoicing mandate. As per the announcement, the mandate will be rolled-out in a phased manner starting in June 2024 for selected taxpayers and ending in January 2027 for all businesses.
Although the authorities have announced the implementation timeline, no official information or documentation about the type of the e-invoicing model is available yet. The information presented at the conference is not binding and may be subject to change.
In Thailand, the government has been working to develop a robust e-invoicing system with a framework that boosts e-invoicing using certified third-party service providers for e-tax issuance.
Using service providers is a viable alternative for businesses as some don’t want to invest or develop their own e-tax systems, whilst others cannot afford to create a compliant invoicing system. This is due to the complex technical and legal steps to maintain their own compliant system. The Electronic Transactions Development Agency (ETDA) started a certification process for electronic service providers to assess whether the applicant’s solution is secure and compliant.
More recently, the Thai Revenue Department (TRD) and the Electronic Transactions Development Agency (ETDA) published new regulations to improve the e-tax invoicing system. The regulations include aspects like the e-tax invoice content and standards for forms, delivery methods, storage and information security for operations relating to electronic invoicing.
Thailand has also recently announced an extension of tax incentives for taxpayers using the current e-tax invoicing system to promote e-invoices in the country. These measures could also signal a future mandatory e-invoicing mandate; however, there is no mandate or defined timeline yet.
E-invoicing has been gradually introduced in China, starting with B2C. In September 2020, the State Taxation Administration (STA) announced a pilot program enabling selected taxpayers operating in China to issue VAT special electronic invoices on a voluntary basis, which are generally used in B2B transactions.
In 2021, the Tax Bureaus of Shanghai, Guangdong Province and Inner Mongolia Autonomous Region announced a new pilot program covering selected taxpayers introducing a new fully digitized e-invoice.
In March 2023, the pilot program of fully digitalized e-invoices was expanded to cover newly registered taxpayers in Inner Mongolia, selected taxpayers in Henan, Jilin, Fujian and Yunnan provinces and the cities of Shenzen and Ningbo. These taxpayerscan issue a fully digitized e-invoice through the electronic invoice service platform without using special tax control equipment following real name authentication checks.
In 2018, the Singapore Government Agency, Infocomm Media Development Authority (IMDA), joined the non-profit international association OpenPEPPOL, responsible for the development and maintenance of the PEPPOL specifications. Singapore became the first National Authority outside Europe to join as a PEPPOL Authority, .
In 2019, the IMDA officially launched nationwide e-invoicing network (InvoiceNow) with intentions to extend the International Peppol E-Delivery Network by allowing businesses to transact internationally with other companies through this network. The IMDA has been encouraging businesses to use InvoiceNow in B2B and B2G transactions as an efficient, modern solution for invoicing and document delivery.
Additionally, it was recently announced by the Senior Minister of State that ‘InvoiceNow’ will become the default e-invoice submission channel for all government vendors within a few years. Although issuing electronic invoices is not mandatory for B2B or B2G transactions, it appears the InvoiceNow program and PEPPOL will be utilised for a B2G e-invoicing mandate in the near future.
Japan has adopted a voluntary e-invoicing system. The Standard Specification for Digital Invoices (JP PINT) based on the global standard PEPPOL specification is published for Japanese taxpayers wishing to issue and exchange electronic invoices over the PEPPOL network. The E-Invoice Promotion Association (EIPA) is encouraging taxpayers to use the PEPPOL standard.
In line with the country’s efforts to improve tax controls, Japan is introducing the so-called Qualified Invoice System (QIS), taking effect on October 2023. In this system, the total amount of the consumption tax corresponding to each rate must be included in the invoice along with the registration number of the qualified issuer. Taxpayers must register to issue qualified invoices. The QIS does not mandate taxpayers to issue invoices electronically.
In 2019, the Philippines introduced the Innovation Act as a part of its Digital Transformation Strategy (PDTS). In line with this strategy and the provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the Electronic Invoicing/Receipting System (EIS) was launched on 1 July 2022 for 100 pilot taxpayers.
The TRAIN Act established 1 January 2023 as the target date when all taxpayers under scope would become obliged to comply with the Philippines e-invoicing and CTC e-reporting obligation. However, the authorities have not yet published an official calendar for expansion of the system. Currently, the 100 pilot and other large taxpayers individually notified by the BIR are the only ones obliged to comply, while the expansion calendar is still awaited.
The winds of change in the region are blowing strongly in favour of digitizing invoicing systems. We see influences from different parts of the world, from Latin America with its decentralised clearance models to Europe with the Italian-style centralised clearance system, as well as with PEPPOL-inspired e-invoicing frameworks.
These are only a few examples of countries in the region that have adopted a CTC system. Businesses must prepare to adopt the new e-invoice compliance requirements trending around the world, and in particular, across Asia.
Japan’s new e-invoice retention requirements are part of the country’s latest Electronic Record Retention Law (ERRL) reform.
Along with measures such as the Qualified Invoice System (QIS) and the possibility to issue and send invoices electronically via PEPPOL, Japan is implementing different indirect tax control measures, seeking to reduce tax evasion and promote digital transformation.
In line with these objectives, the amended ERRL will require taxable persons in Japan to follow several compliance rules when archiving documents originating from electronic transactions, such as e-invoices.
The reform has abolished the hard-copy retention option for electronic transactions. Starting 1 January 2024, records of electronic transaction information must be archived electronically.
As per the definition of the ERRL, “electronic transactions” includes transaction information carried out via Electronic Data Interchange (EDI), transactions via the Internet, and transactions in which transaction information is exchanged by email, among others.
The scope of such transaction information may include order forms, contracts, invoices, receipts, and other similar documents related to the transaction sent and received electronically.
Taxpayers must retain any records of electronic transaction information, including e-invoices, in an electronic archive, as prescribed in the Ordinance for Enforcement of the ERRL.
When retaining e-invoices, the following are alternative ways to ensure compliance with the ERRL:
Updated rules are also in place for taxable persons who convert their paper invoices into a digitized document and keep the invoice exclusively in electronic format.
One of the following is required to ensure the authenticity and integrity of the scanned invoice:
Under new rules as of 1 January 2022, there has been an extension to the timestamping deadline to about two months.
In addition to enforcement of the QIS and all changes described above, Japan introduced transitional measures for taxable persons to provide a grace period for necessary preparations. The tax authority will abolish transitional measures under the ERRL on 31 December 2023. Invoice issuers should check their compliance with the Japanese tax framework in the meantime.
Have questions about e-invoicing changes in Japan? Get in touch with our tax experts.
TicketBAI invoicing is one of the three elements in Bizkaia’s Batuz tax control strategy, which will become mandatory on 1 January 2024.
Taxpayers subject to Batuz will be obliged to issue invoices using TicketBAI-compliant software, which must comply with technical specifications and functional characteristics established by law.
Bizkaia’s TicketBAI system has particularities compared with TicketBAI in other regions of the Basque country, so understanding its specific requirements is crucial to ensure compliance for covered taxpayers.
TicketBAI is the invoicing software that follows specific standards to guarantee the integrity, conservation, traceability and inviolability of records that document the supply of goods and services. This compliant invoicing system is also called “guarantor software”.
The obligation to use TicketBAI software when issuing invoices or supporting documents applies to all taxpayers subject to Bizkaia corporate tax regulations, natural persons who develop economic activities and certain non-residents – regardless of size and volume of operations.
TicketBAI-compliant software must be able to generate the following documents:
The TicketBAI XML file that records sales operations carried out using TicketBAI software. Taxpayers must generate the TicketBAI XML file just before or as they issue the invoice.
The invoice or supporting document which can be issued in either paper or electronically as per invoice requirements already established by Bizkaia regulations.
Finally, in Bizkaia, unlike in the other Basque regions, taxpayers do not need to send the TicketBAI XML file to the tax authority. Taxpayers will send the relevant file information via the subchapter of invoices issued with guarantor software in the Ledger of Economic Operations (LROE).
TicketBAI software is required for B2G, B2B and B2C transactions. This applies to all operations considered as a supply of goods or provision of services, under Bizkaia VAT law. Any transaction not considered as such is exempt from TicketBAI requirements.
The Bizkaia government has already made the voluntary adoption of Batuz possible. However, starting 1 January 2024, taxpayers are obliged to comply.
Taxpayers under the Batuz mandate must develop or acquire TicketBAI-compliant software. They can consult the guarantor software registry, which provides the official list of registered guarantor software.
If you need any help, don’t hesitate and speak to our experts.
Mandate postponed: France postponed the e-invoicing mandate on 28 July 2023. Read our blog to understand what this means for businesses.
Tax compliance in France is already complicated. New e-invoicing and e-reporting regulations being introduced by the DGFIP in 2024 will mean companies doing business in the French Republic face some of the most onerous compliance obligations of all VAT jurisdictions.
One significant change for many businesses will be the need to use Partner Dematerialization Platforms, also known as PDPs. The role of a PDP is highly specialised. Indeed, strict legal requirements and technical specifications must be met to become a registered PDP.
The timeline affecting all businesses is clear. However, depending on your industry, you may need to rely on a PDP to ensure you’re fully compliant with the new requirements. Key industries include:
Companies that need to use a PDP to achieve compliance with the French mandate face an additional, critical decision in what is already a complex new process to navigate. The need for a PDP raises the stakes, making it crucial to have dependable answers to the following:
We’ve created a rundown of key questions to consider when choosing a PDP.
In addition to the existing requirement for B2G invoices (Public Procurement), the French Mandate reform will require B2B invoices to be exchanged electronically. As each B2B e-invoice is progressed, its status will shift. There are 14 status possibilities that need to be communicated between trading parties. Of these 14, 4 must also be automatically reported to the tax authority platform. The result will be a huge amount of additional data flowing in multiple directions.
Additionally, the transaction details of B2B cross-border sales and purchases – excluding non-EU imports of goods – and B2C sales and payment data for Services Sales must be reported electronically to the tax authority.
Meeting these processing and capacity demands will be a significant undertaking for solution providers. For context, 100 million B2G e-invoices are processed annually. With the addition of B2B e-invoicing to the French mandate, this number will now be in the billions.
Why does this matter?
You want to be able to trust that your PDP can cope with increased capacity and processing needs as well as evolving compliance requirements. You want to set yourself up for success for France as well as to deal with the growing obligations across Europe and beyond.
The French Mandate is part of a global trend towards tax digitization. E-invoicing mandates are constantly changing, being modified and updated.
Take Italy, for example. Since January 2019, the e-invoicing mandate has been revised over 40 times.
The French tax authority has already released four versions of the upcoming French Mandate specifications and these will continue to evolve. Will your chosen software solution be robust enough to handle these changes so they don’t negatively impact your business? By asking the right questions, you may find that some aspiring PDPs, who also happen to be existing e-invoicing providers, are out of their depth.
On top of this, there’s the EU-wide VAT in the Digital Age initiative and the changes it will bring. Your future PDP must have the bandwidth and agility to keep up with the inevitability of these future developments. You will also need to consider whether this PDP can take care of your compliance needs beyond France too.
Trust is everything. A seasoned partner with experience navigating and solutioning for diverse e-invoicing obligations is important for your business. As government interest in business data grows, it’s essential to avoid blind spots, often created by complex supply chains, across multiple countries, within and beyond the EU. You’ll need a holistic view of your data that’s broader than e-invoicing and CTCs (continuous transaction controls). Think SAF-T and the other domestic obligations you face, alongside compliance challenges like VAT determination and periodic reporting.
If you’re also doing business beyond France, these need your attention too.
Let’s be clear. Despite what you may have heard about France’s e-invoicing mandate, this is not more of the same.
Yes, electronic invoice requirements used to be relatively manageable. They needed to be readable and unalterable, providing clear proof of the original supplier’s identity.
The scheme that will be introduced with France’s mandate complicates matters, adding requirements for:
Failure to meet the exact stipulations of the reform will result in invalid invoices.
Without legally valid invoices, not just VAT collection and VAT recovery are jeopardised: This would impact your company revenues and your trading partners, creating cash flow and profitability risks.
Make no mistake, the commercial and reputational impact of not meeting these minimum requirements are even more significant than the potential penalties.
French companies may be used to correcting e-invoice errors at a later date, but soon that will no longer be an option. The mandate ushers in continuous transaction controls, so any data or syntax errors will be glaring. If problems arise with e-invoicing, it won’t be possible to revert to paper or PDFs producing a significant cash flow risk for suppliers. E-invoices must be correct and compliant first time, every time.
Reliance on an experienced and knowledgeable PDP for e-invoicing and associated compliance obligations doesn’t just join the dots in your data. It makes good business sense.
For traditional e-invoicing, a large business network has been a supply chain advantage. A large network allows any one business to connect with a multitude of suppliers and buyers that choose to automate billing and invoice payments.
However, the interoperability requirements of the upcoming mandate erode the power of network size. Every supplier and buyer will need to connect through France’s e-invoicing system (Portail public de facturation or PPF) either directly, or indirectly through a PDP. Giving you more freedom when selecting the right PDP for your business.
While each registered PDP is required to cover both inbound and outbound invoice flows, they’re not required to cover all 35 specific use cases mentioned in the official documentation so far. Each use case needs an adapted treatment, which creates complexity that PDPs must address.
It’s important to ask any PDP you’re considering about their plans to address these use cases and any future ones that could arise as requirements evolve.
Our experts remain close to the requirements of the French Mandate. Especially as these evolve. Make it easy for yourself; connect with us.
Speak to us about our future-proof tax compliance solution, for the French Mandate and beyond, or download our deep dive guide on preparing for France’s mandatory continuous transaction controls.
Bizkaia is a province of Spain, and a historical territory of the Basque Country, with its own tax system. Before the approval of the Batuz strategy, the Bizkaia tax authority developed different approaches to implement a comprehensive strategy that would reduce tax fraud. The goal was to stop fraud from affecting revenue generated from economic activities.
This initiative started in the early 2010s when the authority introduced requirements for maintenance of the ledgers of economic operations for individuals with economic activities via model 140, and later by imposing the Immediate Supply of Information (SII) obligation to certain taxpayers in the region.
Batuz represents a significant advancement towards achieving an integral digitized tax control system, covering individuals and entities that carry out economic activities regardless of size. As this article outlines, the system establishes new models that facilitate compliance with fiscal obligations.
Batuz is a tax control strategy implemented by the Bizkaia government that applies to all companies and self-employed persons subject to the regulations of Bizkaia – regardless of their size and volume of operations – comprising the following requirements:
The tax authority based Batuz on the three pillars listed above. Each one entails the following set of obligations that, together, encompass compliance:
Voluntary adoption has been possible since 1 January 2022, with tax incentives for those who commit to early compliance.
From 1 January 2024, Batuz will become mandatory in Bizkaia for all taxpayers in scope – meaning there will not be a phased roll-out, as is usually the case.
For more guidance on the nuances of tax in Bizkaia, speak to our experts.
Update: 8 March 2023
South Korea has recently approved a tax reform which introduces several measures for 2023, among which is the possibility of issuance of self-billing tax invoices.
This tax reform amends the current VAT law to allow the purchaser to issue invoices for the supply of goods and services.
However, this will only be allowed in specific circumstances, such as when the supplier cannot issue the invoice. The purchaser can claim a deduction for the related input VAT by issuing a self-billing invoice.
Therefore, issuing self-billing invoices for VAT-exempted supplies of goods and services will not be permitted. However, the issuance of self-billing invoices by the purchaser depends on confirmation from a district tax office.
This amendment will enter into force and apply to all supplies of goods and services from 1 July 2023.
This South Korean tax reform will expand the transactional scope of the country’s e-invoice issuance and continuous transaction control (CTC) reporting system (e-tax invoicing), as the transactions in the scope of e-tax invoicing are generally the same as those in the scope of VAT invoicing.
Interested in learning more about e-invoicing in South Korea? Contact a member of our expert team today.
Update: 17 January 2021 by Selin Adler Ring
Collection of real-time fiscal data is becoming one of the core public finance decision making tools. Transactional data provides a timely and reliable overview of the business sector, enabling governments to rely on analytical data in the decision-making process.
This is what has led many governments to adopt CTC regimes that require taxpayers to transmit their transactional data in real/ near-real time to government services. South Korea was one of the first countries to appreciate the benefits of a CTC regime and mandated reporting of e-invoice data to the government for certain taxpayers as early as 2011.
The year after the first implementation, the South Korean authorities expanded the mandate scope and the e-invoicing system became mandatory for more taxpayers. 2014 saw another expansion of the CTC mandate to reach its current scope.
The current system requires any business that is a corporate entity or an individual whose aggregate supply value for the immediately preceding tax year is KRW 300,000,000 or more to issue an e-invoice to the recipient of goods or services subject to VAT, as well as to report the invoice data to the government.
The South Korean e-invoicing system mandates the issuance of an e-invoice to the recipient and reporting of this invoice data to the government portal within a day of its issuance. Before e-invoices are transmitted, suppliers must digitally sign them with a PKI electronic signature. E-invoices are reported in an XML format to the National Tax Agency (NTS) Portal. Due to the near-real time reporting time-limit, the South Korean e-invoicing system falls under the category of CTC.
South Korea has implemented a comprehensive e-invoicing system from the beginning and as a result there haven’t been any major changes to the requirements or practices. This is a big relief for taxpayers in South Korea compared to other CTC jurisdictions where there are constant changes.
In addition to the benefits for taxpayers, a considered CTC regime is also less burdensome for the state as the implementation costs of the constant regulatory changes can be significant.
More and more governments are considering the adoption of CTC regimes and should look to South Korea as a success story for this approach which has worked well for both the government and taxpayers.
Please get in touch to discuss how Sovos can help your business comply with CTC regime reporting in South Korea or other jurisdictions subject to e-invoicing mandates.
The European Commission’s VAT in the Digital Age (ViDA) proposal continues to unfold with the latest details published on 8 December 2022. As a result, many EU countries are stepping up their efforts towards digitising tax controls – including mandatory e-invoicing.
While we see different approaches to initiate this transition across Northern Europe, the trend towards continuous transaction controls (CTCs) and e-invoicing mandates has accelerated.
Recent statements indicate that Germany is taking steps towards a B2B e-invoicing mandate, however, without a centralised reporting or clearance element – at least for now. During a VAT conference on 10 March, the Federal Ministry of Finance announced that a draft paper will be published in a couple of weeks for the introduction of the e-invoicing mandate.
It is worth noting that Germany had previously requested a derogatory decision from the European Commission to implement a mandatory e-invoicing regime, as announced by the Ministry of Finance in November 2022.
Sweden is another country where it would not be surprising to see an e-invoicing requirement emerge. The Swedish Agency for Digital Government (DIGG) has expressed the desire to implement mandatory e-invoicing in the country.
With the Swedish Tax Agency and the Swedish Companies Registration Office, DIGG has requested the government research the conditions for mandating e-invoicing in B2B and G2B flows, which would be added to the current B2G e-invoicing mandate.
The reasoning behind this request is that if the European Commission’s ViDA proposal is adopted, it will result in mandatory e-invoicing in cross-border flows. Therefore the national system should align for efficiency purposes. DIGG does not believe that alignment will occur voluntarily, but a mandate will be necessary.
In Finland, no mandatory B2B e-invoicing mandate is in place. However, buyers can receive a structured electronic invoice from their suppliers if requested. This regulation has been in effect since April 2020 for all Finnish companies with a turnover exceeding €10,000.
Furthermore, the Finnish government recently demonstrated their support of electronic invoicing by sending a letter to Parliament outlining its benefits. The government sees electronic invoicing as a means of increasing business efficiency and combatting VAT fraud through the ViDA package.
Lithuania is laying the groundwork for the broader use of e-invoices. It has announced plans to build a technological solution that complies with the European standard for the transmission of electronic invoices.
The platform is expected to be available free of charge to businesses for at least five years and should be ready by September 2023. Additionally, the platform will meet Peppol Network requirements and comply with Peppol BIS 3.0.
Denmark has also been working on digitizing the business processes by implementing a new bookkeeping law. The Danish Business Authority has initiated implementing the Bookkeeping Act’s digital bookkeeping provisions by adopting draft executive orders for standard digital bookkeeping systems and their registration.
As a result, providers of standard digital bookkeeping systems must adapt their systems to the new requirements by 31 October 2023 at the latest. The new provisions stipulate that traditional digital bookkeeping systems must support the automatic sending and receiving of e-invoices in OIOUBL and PEPPOL BIS format.
While Denmark has not announced the final dates, it expects taxpayers to adhere to the digital bookkeeping rules between 2024 and 2026.
Speak to a member of our team if you have further questions about e-invoicing.
Update: 4 October 2022 by Enis Gencer
The recent EU Commission report on the VAT in the Digital Age Initiative indicates that continuous transaction controls (CTCs) will become more prevalent across Europe. The final report suggests introducing an EU-wide CTC e-invoicing system covering both intra-EU and domestic transactions as the best policy option. While Eastern European countries have been at the forefront of local implementations, acting swiftly and introducing CTCs, it’s also worth keeping an eye on some of the developments in Northern Europe.
Following the 2021 national elections, the new coalition government in Germany identified VAT fraud as a policy question. It announced its intention to introduce a nationwide electronic reporting system as soon as possible, which will be used for the creation, checking, and forwarding of invoices. Although there are no details about the nature of the system, discussions are ongoing with stakeholders from the private sector, mainly focusing on the implementation timeline and the government’s role in such a system.
B2G e-invoicing has been mandatory for invoices issued to the federal administration since 2020. The scope was expanded from 1 January 2022 to include state-owned authorities in Baden-Wurttemberg, Hamburg, and Saarland, with the next states joining in 2023 and 2024. Moreover, the IT Planning Council, the Central Body for the digitization of administration in Germany, issued the decision 2022/31 advising all contracting authorities to accept electronic invoices via the PEPPOL network by 1 October 2023 to connect the entire public area in a uniform manner.
Denmark is also aiming to introduce new requirements to digitize the business processes of Danish companies. On 19 May 2022, the Danish Parliament passed a new accounting law requiring taxpayers to make their bookings electronically using a digital accounting system. The mandate will take effect gradually between 2024 and 2026, depending on the company’s form and turnover.
While the new accounting law doesn’t introduce any mandatory e-invoicing or CTC obligations, it is envisaged that the digital accounting systems must support continuous registration of the company’s transactions and the automation of administrative processes, including automatic transmission and receipt of e-invoices. The Ministry of Finance has been authorised to adopt rules requiring companies to register purchase and sales transactions with electronic invoices as the documentation of the transactions, which in practice would amount to an e-invoicing mandate.
The Danish Business Authority, Erhvervsstyrelsen, has prepared drafts for three executive orders concerning the new digital bookkeeping requirements. According to draft regulations, digital accounting systems are required to support the automatic sending and receiving of e-invoices in OIOUBL and PEPPOL BIS format. These systems must be able to share the company’s accounting data by generating a standard file, which is the Danish SAF-T Standard recently published by Erhvervsstyrelsen.
The draft regulations will be available for public consultation until 27 October and the requirements are expected to enter into force on 1 January 2023. There will be a conversion period until 1 October 2023 for digital accounting systems to comply with the requirements.
Sweden is another country looking at introducing digital reporting requirements. The Swedish Tax Administration, Skatteverket, is considering different ways to ensure the correct collection of VAT while obtaining useful economic data from businesses. The project is still at an early phase, and while such requirements could mean introducing Standard Tax Audit File (SAF-T) requirements or a type of CTC, e-reporting, or e-invoicing, the tax authorities would still strive to implement a smooth system for businesses.
The Latvian Ministry of Finance has been working on digitizing invoicing processes for a while. They conducted a public consultation and took into consideration opinions of companies and non-governmental organizations to find out the readiness to start using e-invoices in Latvia.
As a result, the Ministry of Finance prepared a report discussing the current situation and the implementation of e-invoices, and possible technological solutions. The report focuses on different e-invoicing systems, such as post-audit e-invoicing, centralised e-invoicing, and decentralised e-invoicing, comparing the advantages and disadvantages of such systems.
The report favours the PEPPOL BIS standard for the introduction of mandatory e-invoicing in B2B and B2G transactions and proposes the use of e-invoices must be defined as an obligation in Latvian regulations, setting a mandatory requirement for the use of e-invoices to start no later than 2025.
The Latvian government approved the report, and the necessary regulatory acts, hence implementation of technological solutions are expected to take shape in due course.
It’s clear that CTC initiatives are becoming increasingly popular among governments and tax authorities in Europe, with the Northern European countries starting to follow this trend, even if they seem to be acting more cautiously. It will be very interesting to see how and when these CTC projects take shape and be affected by the upcoming results from the EU Commission on the VAT in the Digital Age project.
Need help with e-invoicing requirements? Get in touch with our tax experts.
Update: 6 July 2023 by Enis Gencer
The Israel Tax Authority has released a set of guidelines encompassing technical details and other relevant information regarding the implementation of the Israeli Invoice model.
The guidelines state the new model will be a phased implementation that begins with a pilot program in 2024. A key objective of this new model is to address and mitigate the long-standing issue of fictitious invoices in Israel.
Under the newly introduced Israeli Invoice model, taxpayers involved in B2B transactions which exceed a specific threshold will be required to obtain an invoice number. This will be done by contacting the designated tax authority service via APIs and sending the invoice information prescribed by the tax authority.
The guidelines define the set of information that must be reported to the tax authority, including:
Once acquired, the invoice number must be included on the tax invoice. Without this number, taxpayers will not be eligible to deduct input VAT. It is important to note that the tax authority reserves the right to not assign the invoice number if there is reasonable suspicion of any legal inconsistencies concerning the invoice.
Buyers can use the invoice number to access invoice details through the tax authority service. This feature is designed to optimise the process of incorporating the invoice into the taxpayer’s accounting system.
The Israeli Invoice model will be a phased implementation, beginning with a pilot program in January 2024 for invoices exceeding 25,000 NIS (approximately 6,500 euros). During this phase, the tax authority can only reject the request for invoice numbers in cases of technical errors.
As implementation progresses, the threshold will be gradually reduced as follows:
Israel is quickly taking steps towards the introducton of its invoicing system by publishing technical details and its implementation timeline soon after introducing the system formally in February 2023. Taxpayers should now prepare their systems according to the legal and technical guidelines that the tax authority has recently published.
Looking for more information on Israel’s upcoming regulations? Contact our team of experts.
Update: 26 May by Enis Gencer
More details have emerged regarding the implementation of the continuous transaction control (CTC) model in Israel, which was announced to be introduced in the country in February 2023.
As we reported earlier, Israel’s government approved the 2023-2024 budget on 24 February 2023, setting the stage for the adoption of the CTC model. Since then, the proposal has gone through the standard legislative process and it has recently received approval from the Finance Committee, with some modifications.
According to the latest announcement, the modified plan introduces a CTC e-invoice clearance model for invoices exceeding NIS 25,000 (approximately 6,500 Euros) in business-to-business (B2B) transactions. Under this model, invoices must be issued through the tax authority’s system and obtain real-time approval. Taxpayers will not be allowed to use unvalidated invoices for deducting input tax.
The implementation of the CTC e-invoicing model is scheduled to start in January 2024, and by 2028, the threshold will be reduced to NIS 5,000, thus covering smaller amount transactions.
Despite the short implementation timeline, it is important that the authorities publish regulatory and technical specifications in time for taxpayers to prepare their invoicing systems to fully comply with the new requirements by January 2024.
Find more information about Israel’s current e-invoicing system here.
Update: 14 March 2023 by Enis Gencer
Israel’s government approved the 2023-2024 budget on 24 February 2023 to introduce a continuous transaction control (CTC) model in its tax system.
This long-awaited move will have significant implications for businesses operating within the country. It is essential to know the changes that may impact your company.
The new plan, prepared by the Ministry of Finance and approved by the government, envisages an e-invoice clearance model for invoices over NIS 5,000 (appx. 1300 Euros) issued between businesses. Under this model, invoices must be issued through a tax authority system and receive real-time approval.
The tax authority system will issue a unique number as proof of clearance for each invoice, which businesses can then use to deduct input VAT. The government has also proposed that the tax authority be entitled to refuse a request to assign a number and not clear the invoice if there is a reasonable doubt that the invoice is not issued legally.
While this plan is an exciting development, it is only the beginning of a long journey towards implementing a CTC model. The above proposal is currently only outlined in a budget document, which will be subject to further readings and approvals before the government can implement it.
Additionally, an amendment to VAT Law and the publication of technical details will be necessary to make it legally and technically enforceable.
For further information on the digitization of tax in Israel, speak to a member of our team.
Update: 9 April 2020 by Joanna Hysi
With the long-lasting problem of fictitious invoices in Israel, a move towards some form of mandatory e-invoice clearance might be the answer. After having been withdrawn once due to failing support, the idea of a continuous transaction control (CTC) model is being revived by the Israeli tax authority. The proposed model, similar to Chile’s e-invoicing system (clearance), would include a direct connection between the tax authority and businesses in real time for each transaction. The proposal, which is currently being reviewed with interested stakeholders, will be presented to the Knesset Finance Committee, with the hope of promoting legislation for implementing the planned reform measures as soon as a new government is formed.
Subject to final adoption in law, the core points of the reform are:
It’s an interesting observation that for years Israel appeared to be heading towards the EU approach of a post-audit system, yet recently they seem to have pivoted and be heading towards the more Latin American style of continuous transaction controls.
Either way, the Israeli tax authorities are now taking firm measures to combat VAT fraud, as to whether they go for a model similar to Chile, or something close to home in India or Turkey, we will have to wait and see.
Electronic invoicing in France (to enter into force from July 2024) requires using a (partner) dematerialization platform. The already enacted legislation leaves the choice of which platform up to companies.
Should you use the public platform (‘PPF – Portail Public de Facturation’, i.e. Public Invoicing Portal) or a third-party private platform (‘PDP – Plateforme de Dématérialisation Partenaire’, i.e. Partner Dematerialization Platform)? And which organisation registered as a PDP should you opt for?
There is a lot to consider – including the type of invoices, data management, customer/supplier relations, transmission, functionalities, and more – this blog will help you make a decision.
The electronic invoicing process includes formatting, controlling, reporting, routing tracking, transactions, whether between trading parties (domestic B2B e-invoices) or with the PPF (domestic B2B e-invoices, cross-border B2B sales and purchases, B2C sales, payments received on services). In this respect, PDPs are essential.
French legislation allows companies to choose their dematerialization platform for submitting and/or receiving domestic B2B invoices and reporting transactions. A public solution exists, the PPF, alongside which other PDPs position themselves.
What parameters should you consider when choosing a dematerialization platform? What are the conditions for becoming a PDP and when will they be operational?
This blog discusses the elements that enable companies to understand the role of dematerialization platforms in managing electronic invoicing. If you wonder how to choose the right PDP for your organization, read this blog about Choosing the right PDP – 5 Questions to ask Yourself.
The need to use a dematerialization platform is part of the electronic invoicing requirements, which come into force on 1 July 2024 for business-to-business (B2B) transactions.
Mandate postponed: France postponed the e-invoicing mandate on 28 July 2023. Read our blog to understand what this means for businesses.
July 2024: Mandatory receipt of dematerialized invoices and choice of platform
January 2025: These obligations will apply to a further 8,000 medium-sized businesses (Entreprises de Taille Intermédiaires).
January 2026: The mandate scope extends to all other medium-sized and small companies.
An electronic invoice must be delivered in a structured format, leaving it to the trading parties and their PDPs to agree on the standard. By default, PDPs must be able to process the three core set formats, UBL, CII, or UNCEFACT, with the obligation for the platforms to produce a legible version of each invoice, or Factur-X hybrid format (XML+PDF/A-3).
PDPs may also offer to process any other structured formats (e.g. EDI formats such as EDIFACT), subject to acceptance by both the buyer and the seller. In both cases, PDPs will have to extract mandatory data from the issued e-invoice and map it into one of the core set formats – and then report them to the PPF within 24 hours of the e-invoice issuance.
The corresponding flows can be exchanged under various communication protocols (EDI, API, etc.)
Using a PDP isn’t mandatory from a legal point of view. However, using a PDP will be necessary for companies who want to exchange invoices in specific formats due to the specificities of the invoice flow (not supported by the PPF).
The PPF will be used for the obligatory transmission of invoice data to the tax authorities.
It will manage the following for companies:
The PPF performs other functions including management of the Central Directory (in which any registered company subject to VAT will be identified), data collection and transmission to the tax authorities, and retention of e-invoices.
Like the PPF, a Partner Dematerialization Platform (PDP) ensures the submission of invoices and conversion into one of the three core-set formats – CII, UBL or Factur-X.
But, contrary to the PPF, they will allow the exchange of invoices in any EDI format (other than the three core-set formats).
The PDPs will allow the following:
In addition to these mandatory functionalities, they may also offer the following:
A PDP is a platform registered and authorised by the French tax authorities. The official registration number will be issued based on an application file submitted by an operator. This file will have to document how the regulation requirements (decree and order published in October 2022) are met, particularly the ability to perform the functions expected of a PDP.
In addition to the guarantee provided by this registration (mainly from the point of view of compliance with stringent security rules), what distinguishes a registered platform from a simple dematerialization operator is the possibility of transmitting invoices to other dematerialization platforms (PPF or other PDPs).
This registration is valid for three years and then must be renewed, based on audits to be regularly provided by the PDPs (first audit to be conducted no later than 12 months after the registration entering into force).
The first certified PDPs should be announced in June or July 2023 and will be published.
Find out how Sovos can help you comply with e-invoicing regulations by speaking with one of our experts.
Thailand has permitted e-invoicing since 2012. From 2017 – following regulations issued on e-tax and e-receipts – taxpayers may prepare, deliver, and keep their invoices and receipts electronically, subject to prior approval from the Thai Revenue Department.
Currently, the Revenue Department and the Electronic Transactions Development Agency (ETDA) are working together to improve the e-tax invoicing system in Thailand. As a result of this joint effort, they’re developing new regulations.
Thailand´s voluntary e-invoicing system aims to promote and support their e-payment policies and electronic transactions, reduce the cost and management of the government and private sector and increase confidence and safety according to international standards.
According to the Revenue Code documents that can be voluntarily issued electronically are tax invoices (known as e-tax invoices), credit notes, debit notes and receipts.
E-tax invoices are electronic tax invoices, including regular invoices and debit and credit notes prepared in a specific electronic format.
Formats may include a Microsoft Word file, a Microsoft Excel file, PDF, PDF/A-3, XML or other forms established by the Revenue Department. Finally, the e-tax invoice must be signed using a digital signature or time stamp before being delivered to the buyer.
Thailand currently has two e-invoicing systems for taxpayers to adopt voluntarily. These are e-tax invoices and e-receipt RTIR, and e-tax invoices by email.
Any taxpayer can voluntarily register for this system without a turnover threshold.
Entrepreneurs can prepare electronic tax invoices and electronic receipts in an XML file or other electronic formats with a digital signature. However, to submit the data to the Revenue Department, the information should only be in an XML file format (Bor Thor. 3-2560). They must also have an electronic certificate provided by a Certification Authority.
In this system, the supplier must submit the e-invoice to the Revenue Department by the 15th day of the subsequent tax month after delivering it to the buyer.
This system is designed for small entities with an annual turnover of less than THB 30 million. Taxpayers can email the invoice to the buyer and include the central system of the agency that develops electronic transactions in the CC field for time stamping.
The system then sends both trading parties an e-tax invoice with a time stamp. In this system, the file format is PDF/A-3. Information is automatically sent to the Revenue Department.
It’s important to note that once approved by the Thai Revenue Department to issue electronic invoices, taxpayers must comply with all the regulations and rules for preparing and storing electronic invoices and receipts.
The Thai Revenue Department has recently published new announcements from the Director-General of the Revenue Department regarding VAT, namely: no. 48, 247, 248 and 249.
E-tax invoices and credit and debit notes should include specific statements from those announcements. As of January 2023, they must specify that electronic invoices were prepared and sent to the Revenue Department electronically.
The Thai Revenue Department also set forward new standards in the Announcement of the Director-General of the Revenue Department No.48 regarding forms, method of delivery, storage and documentary evidence or books and information security for operations relating to electronic invoicing.
These new standards entered into force on 19 August 2022.
This regulation reinforces the need for prior approval and permission from the Revenue Department to connect with the electronic systems to issue e-tax invoices. It is subject to the requirement that a data security system can ensure the fulfilment of e-tax invoices and e-receipts.
The taxpayers opting for e-invoicing must follow the rules and conditions for this process. They need to inform the Revenue Department of the e-tax invoice by submitting a receipt for the tax invoice and the certificate used for digital signature.
The Thai Revenue Department also issued new standards in Announcement No. 48 for storing and archiving e-tax invoices and e-receipts.
Taxpayers who are obligated to issue an invoice and choose to do so electronically have to keep the electronic invoice or receipt according to specific criteria:
(a) Use reliable methods to maintain message integrity from the time the message is completed and can display that message later.
(b) Keep information on tax invoices or receipts, which can be accessed and reused, and the meaning does not change.
(c) Keep the information of tax invoices or receipts in the format in which they were created, sent, or received – or in a form that can display messages correctly, and
(d) Retain information indicating the origin and destination of the tax invoice or receipt and the date and time they sent the message.
According to the Thai Revenue Code, electronic invoices must be stored electronically for no less than five years but no more than seven years. Taxpayers must keep tax audit e-invoices until the completion of the audit.
These were significant steps towards the digitalisation of taxation in Thailand. Although there is no future timeline or mandate, they’ve taken more measures to solidify and mature the e-invoicing mandate.
While e-invoicing is still not mandatory in Thailand, the government intends to promote e-tax invoices to help businesses to increase efficiency and decrease costs. These measures could be applicable in a future compulsory e-invoicing mandate.
If you want to learn more about e-tax in Thailand or have any other question please feel free to get in touch with a tax expert today.
Update: 28 March 2023 by Maria del Carmen
On Friday 31 March 2023 the grace period granted by Mexico’s Tax Administration Service (SAT) in the Miscellaneous Tax Resolution 2023 (RMF) ends. Taxpayers must transition to version 4.0 of CFDI, Comprobante Fiscal Digital por Internet, the electronic billing schema.
Document formats that will no longer be accepted following the end of the grace period include:
Authorized CFDI Certification Service Providers (PSCCFDI) must update their integration mechanisms to remain compliant with the new CFDI 4.0. Taxpayers must align their technologies with the changes that their PSCCFDI notifies.
The authority has the power to impose fines for non-compliance with the new CFDI tax provisions, when executing verification powers or within are fund application process.
These fines range from $ 19,700.00MXN ($ 1000.00 USD approx.) to $ 112,650.00MXN ($ 5500.00 USD approx). Repeated non-compliance can result in the tax authority preventively closing the taxpayer’s establishment for a period of three to fifteen days.
Fines of $ 400.00MXN ($ 20.00 USD approx) to $ 600.00MXN ($ 30.00 USD approx) will be issued for tax receipts that don’t include the relevant supplements as outlined in the SAT’s guidelines.
In extreme cases where damage to the federal treasury is proven, this is considered comparable to tax fraud. This would involve when CFDI is used for taxes calculation with non-compliance requirements of Articles 29 and 29-A of the Federal Tax Code.
The CFDI Version 4.0 became the only way to invoice, the tax authority has updated the following documents ahead of CFDI v4.0 transition:
Companies will need to be mindful of these changes and how to implement them to ensure ongoing compliance during the transition to CFDI 4.0.
Need to discuss compliance with Mexico’s e-invoicing requirements? Speak to our experts.
Update: 1 February 2023 by Maria del Carmen
CFDI, which stands for Comprobante Fiscal Digital por Internet, is the electronic billing schema defined by the Mexican federal tax code. It has been mandatory for companies that do business in Mexico since 2011.
CFDI aims to increase visibility into companies’ tax liabilities so the government can ensure it is receiving accurate payments. It has been successful, with audits based on the legislation revealing a 34% increase in VAT collected in a single quarter.
Tax legislation in Mexico requires additional information when companies make certain transactions. Named “complementos” or supplements, the additional information must be attached to the main CFDI.
There are 30 main CFDI ‘complementos’, each with its own essential components and requirements. There is also a validation process and cancellation process to follow and a wide range of penalties for non-compliance.
Read our Mexico e-invoicing guide to learn more and ensure compliance with this complex VAT landscape.
On 27 December 2022, the Mexican Tax Administration Service (SAT) published the Resolution Miscellanea Fiscal (RMF) 2023. Each annual revision sets outs rules and adjustments for CFDI, a key component of Mexico’s electronic invoicing system.
The RMF entered into force on 1 January 2023.
Among the most important rules is the extension of the grace period for issuing certain documents. Now extended to 31 March 2023, the provision covers the following documents:
The RMF 2023 states cancellations of the CFDI cannot be made later than the month in which the annual declaration of the ISR (tax on income) must be submitted. That’s in April for individuals, and in March for companies.
The resolution also states that corrections to the payroll payment CFDI (CFDI de nómina) can only be made once and no later than 28 February 2023.
Taxpayers that carry out volumetric controls of hydrocarbons and petroleum products may continue to issue a daily, weekly, or monthly CFDI for all operations carried out with the public, until 31 December 2023.
Including supplement “Hidrocarburos y Petroliferos” in the CFDI will become mandatory 30 days after the SAT publishes the complement on its website.
The RMF states until 31 July 2023 no fines will be imposed and it will not be considered under the crime of smuggling if the Carta Porte supplement does not have all the requirements indicated in the CFDI Filing Guide.
To prove the transport of goods or merchandise, the intermediary or transport agents must now issue the CFDI type income (CFDI tipo ingreso) with the Carta Porte Supplement – instead of the CFDI type Traslado.
Taxpayers involved in the motor transport of dedicated services are subject to additional rules. Those who provide the service to a single client or contractor through the specific assignment of vehicle units may issue the CFDI type income (CFDI ingreso) to cover the entire service provided without the Carta Porte Supplement.
In these instances, the client or contracting party must issue the CFDI of transport (CFDI de transporte). This includes the Carta Porte supplement for each trip, which must be related to the CFDI type income (CFDI ingreso) issued by its carrier.
Additional regulations are established regarding the issuance of CFDIs related to bareboat charter services, for a specific time, per trip, and ferry modality.
The RMF includes information about the Resource Identification Supplement and Expense Bill of Third Parties provision, this will become mandatory 30 days after the tax authority publishes it on its website.
For further questions don’t hesitate and get in touch with our experts today.
Update: 22 March 2023 by Marta Sowińska
Poland published the second draft law amending the VAT Act and certain other laws on the Government Legislation Centre on 15 March 2023.
The presented amendments mainly confirm previously announced changes, though some additions are worth noting. The government heavily based the shape of the new draft law on the comments gathered by the Ministry of Finance (“MoF”) during the public consultation. The essential clarifications concern:
The draft Act confirmed the mandate postponement to start from 1 July 2024 (half a year delay from the previous go-live date of 1 January 2024) with some exceptions:
The mandatory scope of the KSeF system will exclude invoices issued between businesses and non-business individuals (B2C transactions).
Accordingly, invoices issued and settled under the special procedures for OSS and IOSS will be consistently excluded from KSeF, as taxpayers under special procedures provide cross-border supplies and services primarily to non-business consumers (B2C transactions).
Foreign taxpayers with a fixed establishment on the territory of Poland – performing activities that are required to be invoiced according to Polish VAT law – will be obliged to issue their invoices via KSeF to the extent that this permanent place of business relates to the supply of goods or services which are invoiced.
The draft law entirely withdraws the possibility for buyers to issue corrective notes. Buyers cannot propose corrections to the original invoices through or outside KSeF, which the previous draft law presented. Accordingly, changes in the issued invoice can be made only by issuing a corrective invoice.
In line with the previous draft proposal, the current draft law specifies the possibility of issuing e-invoices in offline mode, i.e. outside of KSeF in a structured format and delivering to KSeF on the next business day, in case of a failure on the taxpayer side.
Moreover, the Ministry of Finance will communicate relevant information to the public regarding any maintenance work conducted in KSeF or any system failure. During this time, taxpayers can issue invoices outside of KSeF and deliver them to the buyers in the agreed format.
Such invoices must follow the structured format, be assigned with a QR code and, after the failure ends, be delivered to KSeF within seven days. The date of issuance will be the date stated in the P_1 field, while the buyer’s receipt date will be the date when KSeF assigned the unique ID.
The government has added a new requirement for including a QR code on the invoices issued during a failure of the KSeF system. As previously announced, the QR code must also be included in the invoices issued outside of KSeF, for example, to foreign buyers and on the VAT RR invoices and corrections to them.
The Ministry of Finance responded to feedback about the lack of a self-billing process for cross-border transactions. Therefore, a method of authentication in KSeF for foreign buyers will be included in KSeF, allowing foreign buyers to issue structured invoices on behalf of the suppliers.
The exchange rate used for converting foreign currencies into PLN currency can be maintained from the day preceding the date indicated in the P_1 (date of invoice issuance).
The exchange rate will be calculated based on the date when an e-invoice was issued (stated in the P_1 field), provided that an e-invoice is sent to KSeF no later than the day after the date indicated in the P_1 field.
Sanctions will apply from 1 January 2025 (previously 1 July 2024) up to 100% of the amount of VAT indicated on the invoice or up to 18.7% of the total amount due shown on the invoice. However, no minimum penalty amount will apply – previously, it was 1000 PLN – approx. 200 EUR.
The draft law is expected to be published in Q3 of 2023, with most provisions applying from 1 July 2024.
Accordingly, the associated final schema FA (2) and FA (RR) are also planned to be published at the end of June or beginning of July, as announced by the Ministry of Finance during a conference on 16 February 2023. Therefore, we are still waiting for the legislative process to be completed for the e-invoicing mandate to take effect.
Speak with our team if you need more information on the upcoming e-invoicing changes in Poland.
Update: 3 February 2023 by Marta Sowińska
According to an official announcement published by the Ministry of Finance on 2 February 2023, the go-live date of Poland’s mandatory e-invoicing system is now 1 July 2024 – delayed six months from the previous date.
More than a year since the roll-out of the voluntary phase and following extensive testing of the KSeF system by taxpayers, the Ministry of Finance responded to the feedback submitted by businesses and entrepreneurs in the public consultation by announcing the delay of the mandate and relaxing certain requirements.
The expected changes are:
Taxpayers should not treat the postponement of the e-invoicing mandate as a reason to pause the implementation process. Instead, taxpayers should treat the delay as an incentive to implement complex legislative and technical requirements before the go-live date and adapt their accounting and invoicing processes considering any errors that may appear.
The proposed changes will need to be adopted by law to become effective. Such legislation, considering the often-lengthy legislative process, is expected to be published just in time for the mandate roll-out in July.
Looking for more information on e-invoicing in Poland? Speak with our expert team.
Update: 15 December 2022 by Marta Sowińska
On 1 December 2022 the Ministry of Finance in Poland published the draft legislation amending the VAT Act regarding the introduction of mandatory e-invoicing in the National e-Invoicing System (KSeF). It is the second stage of the implementation of mandatory CTC e-invoicing in Poland, which will take effect from 1 January 2024.
Due to the Council Implementing Decision (EU) No 2022/1003 of 17 June 2022 authorising Poland to apply a special derogatory measure from Articles 218 and 232 of Directive 2006/112/EC on the common system of value added tax (OJ. UE L 168/81), Poland is now able to propose amendments to the VAT Act that leads to full implementation of mandatory e-invoicing in the country.
KSeF is the centralised e-invoicing platform for issuing, exchanging and archiving structured invoices. We are currently in the voluntary phase of issuing invoices through the KSeF system; the system has been available for transactions since 1 January 2022.
From 1 January 2024, with the implementation of the mandatory mandate, suppliers and buyers will be obliged to issue and receive their invoices through the KSeF.
The obligatory e-invoicing will cover activities that currently require documenting an invoice issued in accordance with the VAT Act. Therefore, the transactional scope will include the supplies of goods and services made between entrepreneurs (B2B), to public authorities (B2G), and to consumers (B2C).
Taxpayers will need to mark structured invoices with the verification code (QR code) if issuing them outside of KSeF. The code will need to be displayed when visualising e-invoices in commercial programs or free tools provided by the Ministry of Finance (meaning in PDF or paper formats too).
KSeF will provide functionality enabling verification of the correctness of the invoice issued via KSeF. After scanning the QR code, the information contained in the code will be read, and data identifying this invoice will be displayed with information from KSeF about their correctness. The implementing regulation to the VAT Act will provide further information regarding the method of marking e-invoices.
Contrary to the previous position of the MoF, corrective invoices issued after the entry into force of the draft Act will be issued in KSeF if they are issued by a taxpayer with a registered office or permanent place of business in Poland, regardless of whether they were issued using KSeF or outside KSeF.
Also, buyers will be able to propose corrections to the original invoice (except to the NIP number). After seller acceptance it will become a corrective e-invoice (alternative corresponding to the corrective note, which can only be issued by the buyer and used when the invoice recipient finds a mistake in the delivered invoice).
From 1 January 2025 invoices issued via cash registers will be in scope of the KSeF system. Taxpayers keeping sales records using cash registers will be required to issue a fiscal receipt for each sale, but they should not issue an invoice from the cash register, as this document will not be considered an e-invoice.
Also, from 1 January 2024, a receipt with NIP number up to PLN 450 will not be considered an e-invoice.
In case of KSeF system failure, taxpayers will have to issue e-invoices in accordance with the schema, but instead transfer them to the recipients outside the KSeF. The date of issue of such e-invoices will be the date specified in the P_1 field.
After the failure is over, taxpayers will have seven days to send invoices issued in this way to KSeF. Also, it is possible to issue e-invoices outside of KSeF in the event of a crisis.
According to the draft law, failure to comply with the obligations introduced in the amended VAT Act will lead to financial administrative penalties.
The head of tax office will be able to impose:
Penalties can be imposed when the taxpayer:
It’s vital to highlight that the introduction of the administrative penalties with the half year delay isn’t hindering the introduction of mandatory e-invoicing in Poland. This postponement should not be viewed as a delay to the introduction of the mandatory e-invoicing obligations. Invoices issued between 1 January 2024 and 30 June 2024 outside of KSeF will not be treated as structured invoices, and therefore penal and fiscal sanctions will apply.
With the draft regulation published, the Ministry of Finance also presented the new logical structures of FA(2) and FA_RR. The public consultation on the substantive and logical correctness of the schemas is open until 23 December 2022, coinciding with the public consultation regarding the draft regulation on the mandatory implementation of KSeF.
The draft regulation amending the VAT Act is available on the Government Legislation Centre website and the draft schemas can be found: FA (2) and FA_RR.
Want to ensure compliance with the latest e-invoicing requirements in Poland? Get in touch with our tax experts.