In less than six months, Poland is going to introduce its long-awaited CTC clearance e-invoicing mandate – a tax reform that will impact a large amount of businesses.

It has been possible to issue and receive e-invoices voluntarily via Krajowy System E-Faktur (KSeF) since January 2022, but from 1 July 2024 it will become mandatory for suppliers and buyers that are in scope of mandatory e-invoicing to do this via KSeF.

A detailed understanding of the new regime, plus timely and proper preparation, is critical for compliance. Whilst there is a six-month grace period on financial penalties, non-compliance can negatively impact your business in many other, often unexpected, ways.

In this 45-minute deep-dive webinar, Marta Sowińska from our Regulatory Analysis and Design team will cover:

Join us on 8 February at 2pm GMT | 3pm CET for a thorough review of the Polish KSeF e-invoicing mandate and the opportunity to submit your questions.

Register today

As tax authorities continue to digitize processes in their mission to reduce fraud and close their VAT gaps, they are introducing requirements that provide greater visibility into a company’s financial operations in the form of Continuous Transaction Controls (CTC).

It would be a mistake to think that being prepared to meet obligations in one of the countries where you operate can simply be replicated in another – CTCs are far from a ‘one-size-fits-all’ solution.

Join us on 24 January 2024 in our latest quarterly VAT Snapshot webinar series where regulatory experts Dilara Inal and Marta Sowinska will examine how tax authorities in Poland, Romania, Israel, Greece and Spain – all simultaneously implementing CTC regimes – are doing so with different sets of requirements.

Don’t miss this opportunity to learn more about these unique regimes and what they mean for your business.

Register now.

When it was announced recently that the introduction of a new French e-invoicing mandate had been delayed until September 2026 there was a collective sigh of relief amongst many in the tax and finance world. More time to adequately prepare, put systems and methodologies in place and have your business ready to be compliant from the get-go.

Sounds optimal, but let’s focus on reality. First, the reported delay is a bit deceiving. While it may not officially take effect until 2026, you only have a matter of months to get prepared to participate in the extended trial. Human nature may be to push it to the side and focus on more short-term deadlines. However, to not take advantage of the extra time provided would be shortsighted at best.

Here are five ways you can make this extra time work for you: 

  1. Take time to fully understand the mandate and how it impacts your organization. Be prepared to answer questions such as, where will e-invoicing and e-reporting data come from? Do we need to involve IT. Use this time to eliminate surprises.
  2. Study and consider what other aspects of the business may be impacted by this mandate. Understand what other business data is required for a smooth integration and approvals. Consider confidentiality and data privacy.
  3. Begin to align internal processes, workflows and systems in preparation for impending changes. This is your opportunity to test different approaches and workstreams to ensure a high-level of efficiency. How will you manage the process and who in your organization will have operational responsibility when extended trials go live?
  4. The first list of officially registered service providers will go live in spring, 2024. Use this time to do your research on which service providers make sense for your organization, both during the trial period and as a potential long-term partner.
  5. Evaluate your current compliance management strategy. As you begin working with a registered service provider through the trial period, consider how this differs from your approach to other government mandates. What can you learn from this experience and what other areas might you be able to improve upon?

 

More on the France B2B E-Invoicing Mandate

Note: portions of this section originally appeared in the Sovos blog, France: B2B E-Invoicing Mandate Postponed, updated 19 September 23.

Businesses will soon be able to register proactively for the pilot program, which has been designed to allow businesses to test the PDP platform. This program is intended to build knowledge and confidence and ensure businesses are on the path to readiness.

Therefore, it would be prudent to regard the delay as a mere six-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 good news is that the many software vendors helping companies to streamline their purchase-to-pay and order-to-cash processes will be eager to test the compliance of their solutions as early as possible in what has become a completely new ecosystem.

We are proud to say that Sovos is one of the first 20 candidates for service provider (PDP) accreditation in France and as such, will be fully prepared to assist your organization through the trial process and beyond.

Take action:

Looking for more information about how to comply with the French Mandate?

Download our French Mandate eBook or Contact our expert team.

E-documents or electronic documents are rapidly growing in usage across businesses of all shapes and sizes, in countries around the world.

While the automated exchange of e-documents is a relatively new phenomenon which is being adopted on a country-by-country basis, there is basic universal information that your business would benefit from understanding – and potentially utilizing.

This blog will serve as your one-stop shop for required e-document knowledge.

What is an e-document?

An e-document is an electronic transactional document or message and is typically used in an automated business process.

As the digitisation of business accelerates, so too does the use of electronic documents – whether that be an electronic invoice sent in real-time to a national tax authority or an electronic goods receipt note exchanged between companies.

The difference between electronic documents and other digital documents such as PDFs is that e-documents are machine-readable and are generally exchanged by online platforms or software.

That said, there are numerous types of e-documents and there is little standardisation as each country has its own stance and potential mandate on their adoption. The European Union has long been working on its approach to e-documents for increased interoperability with definitions and rules as part of its efforts under the eGovernment Action plan and eIDAS regulation to facilitate digital transactions and services in the EU.

In addition, the UK recently adopted the UK’s Electronic Document Trade Act which is a huge step towards the digitization of trade documents and potentially paperless global trade.

Types of e-documents

There is a wide variety of electronic documents to suit a number of applications across business, helping to streamline workflows and operations, facilitate cross-border trade and save on costs.

E-document mandates in Turkey, for example, include:

Other electronic documents that are used in some countries include:

There has been a notable implementation of e-documents in transport in recent years, with the likes of Romania adopting a system that requires taxpayers to use an electronic waybill system to obtain clearance of the transport document before the transport of goods begins. Read our dedicated blog to find out more about the global rise of e-transport documents.

One particular e-document that has had an exponential rise in utility over the past few years is the e-invoice. Electronic invoices have grown in popularity as countries develop their continuous transaction controls (CTC) and e-invoicing regulatory obligations. The likes of France, Spain and Poland all plan to introduce e-invoice mandates, requiring taxpayers to send invoices electronically.

Read our comprehensive e-invoicing guide for more information.

Why use electronic documents?

There is a host of reasons that electronic documents can be beneficial, which explains why tax administrations globally are implementing e-document mandates.

A primary reason for the use of e-documents is that they generally allow for the automation of workflows, increasing safety, accuracy, transparency and cost-saving for the involved parties. Automating the process of generating and exchanging documentation reduces the risk of error, allows for seamless transmission of information (including to tax authorities who seek greater transparency) and reduces the reliance on paper (providing an environmental benefit).

Another reason businesses use electronic documents is simply because they are mandated to do so as part of tax digitization controls. An increasing amount of tax authorities are making it an obligation to send documents electronically, and facing a penalty due to non-compliance is not desirable. As CTC regime adoption grows, so too does the need for businesses to meet their new e-document obligations.

Compliance conditions of e-documents

The compliance conditions of e-documents vary depending on the national rules, but there are some typical conditions across regimes.

In the context of tax digitization controls, the conditions that apply to some of the most regulated e-document types, such as the e-invoice, include:

What’s the difference between a digital document and an electronic document?

The difference between electronic documents and digital documents is a hot topic. It’s easy to get confused between the two considering that “digital” and “electronic” are used interchangeably by many, but it’s important to understand the difference.

Digital documents are often a digital analogue of a physical document – think a scanned document, photograph, or PDF – and oftentimes are simple for people to read and digest. An example of a digital document would be an invoice sent as a PDF via email.

Electronic documents are files of data that are generated by and for computers, making them hard for people to read due to their formatting. Such data – like that seen in a structured e-invoice (e.g. XML) – is meant to be sent from one system to another without interference from humans.

How Sovos can help

Sovos’ software allows businesses to manage CTC obligations, including e-invoicing compliance and archiving.

As the world continues its digitisation, it’s important to stay on top of evolving regulations and to keep up with best practices for your business. Working with Sovos, your business can:

Find out more about Sovos’ CTC solutions.

With the rate of change in tax digitization not set to slow down any time soon, it’s more important than ever to keep up with what’s happening where you do business.

This quarter, our VAT Snapshot webinar looks in detail at CTC and e-invoicing implementation timelines across six different countries.

Join Dilara İnal and Carolina Silva from our Regulatory Analysis and Design team for an examination of scope, key timelines and essential milestones for compliance across these jurisdictions.

The webinar will cover:

As always, please bring your questions for our experts in the Q&A at the end.

Stay up to date with the evolving landscape of tax mandates by registering today.

Register now.

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.

Who is required to issue electronic tickets?

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.

What’s required in an electronic ticket?

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.

How electronic tickets can help businesses

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.

Need help for invoicing in Chile?

Are you in financial services or working at a bank with more questions about invoicing in Chile? Speak to our tax experts.

Extension of the implementation dates of the B2B e-invoicing Mandate.

Update: 2 January 2024 

The Finance Law for 2024 has been officially adopted and published in the Official Gazette on 30 December 2023. With the finalization of the law, the new implementation dates are as follows: 

Receipt of e-invoices: Starting from 1 September 2026, ALL taxpayers, regardless of their size, will be required to be capable of receiving e-invoices. This date may be extended to December 1, 2026, at the latest, but only by decree. 

Issuing e-invoices: 

International B2B, B2C transaction and payment data transmission: 

The e-reporting obligation for international B2B (sales and purchases) and B2C transactions and Payment data follows the same timetable as that for issuing electronic invoices (September 1, 2026 or September 1, 2027 depending on the size of the company). 

The implementing decree that will formally ratify this new schedule is expected during the first quarter of 2024. 

Looking for more information about how to comply with the French Mandate? Contact our expert team.

 

Update: 19 October 2023

The long-awaited new implementation timeline regarding the e-invoicing and e-reporting within the draft Finance Law for 2024 has been unveiled on 17 October 2023. 

According to the draft amending General Tax Code and Law No. 2022-1157, the new dates are as follows: 

Implementation phases: The roll out of the mandate will now occur in two phases, as opposed to the previously planned three phases. 

Issuing e-invoices: 

Receipt of e-invoices: Starting from 1 September 2026, all taxpayers will be required to be capable of receiving e-invoices. 

E-reporting obligations: The enforcement of e-reporting obligations will follow the same revised dates. 

It is important to note that the above-mentioned dates, September 2026 and September 2027, may be subject to readjustment with the possibility of rescheduling to the 1st of December as the latest date, in the respective years. 

After the adoption of Finance Law for 2024, a Decree complementing the law is expected to be issued in the first quarter of the upcoming year for full enforcement of aforementioned obligations. 

Companies need to take advantage of the additional time through active participation in the pilot phase during which all relevant use cases should be tested so that changes to applications, processes and systems can be taken care of and fine-tuned in good time to ensure compliance.  

Looking for more information about how to comply with the French Mandate? Contact our expert team.

 

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.

Update: 23 February 2024 by Carolina Silva

Changes to Malaysia’s CTC E-invoice Reporting Mandate Announced

On 9 February 2024, the Inland Revenue Board of Malaysia (IRBM) published long-awaited updates on the upcoming continuous transaction controls (CTC) reform. More specifically, the IRBM has released its Software Development Kit (SDK), along with new versions of the e-invoicing and e-invoicing specific guidelines containing significant changes to the CTC mandate beginning in August 2024.

Updates to CTC e-invoice reporting mandate

The new versions of the e-invoicing documentation define the scope of sectors and transactions subject to mandatory e-invoicing and clearance through the IRBM platform, MyInvois.

Sectors in scope are:

Transactions with individual buyers (B2C) fall outside of the e-invoicing mandate scope. Any e-invoices for transactions not in scope are subject to the buyer’s request.

Consolidated e-invoice requirement

In cases where the buyer does not request an e-invoice, suppliers can continue to issue an invoice or receipt as they do today. Initially, this exception was only foreseen for B2C transactions, but has now been extended to all transactions besides the ones included in the mandatory e-invoice scope.

However, suppliers will be subject to an invoice data reporting obligation and will be required to issue a monthly consolidated e-invoice (within 7 days of the month end) aggregating all invoices and receipts issued during the period.

Cross-border transactions

Another scenario clarified by the IRBM is the treatment of cross-border transactions under the Malaysian CTC e-invoice reporting mandate.

Foreign parties are not mandated to implement Malaysia’s CTC system but Malaysian buyers must issue a self-billed e-invoice to document the expense. This should be in the same structured XML or JSON format and submitted to the MyInvois platform, similar to a reporting obligation for cross-border transactions.

Rejections and cancellations

The Malaysian CTC system will allow buyers to reject incoming invoices in their e-invoicing flows, as well as allowing suppliers to issue cancellations. These requests are subject to a 72 hour time limit, after that the invoice is considered issued and any correction or amendment will need to be through credit, debit or refund notes.

According to the IRBM, these functionalities were added solely for the convenience of the parties. Corrections can still be done through credit, debit or refund invoices if the supplier prefers.

Additionally, the new documentation has also clarified and explained how self-billing should be handled under the CTC e-invoice reporting mandate scope, as well as specific transactions such as reimbursements, employment benefits, profit distributions, foreign income and e-commerce transactions.

Want help with e-invoicing in Malaysia? Contact our team of experts today.

 

Update: 29 November 2023 by Carolina Silva

Timeline Changes Proposed for E-Invoicing in Malaysia

The Malaysian 2024 Budget law, which is currently pending parliamentary approval, introduces changes to the implementation timeline of mandatory e-invoicing in the country.

According to the new budget law, implementation of electronic invoicing will be delayed and start for taxpayers with an annual turnover of revenue of more than RM100 million (appx. 20 million euros) on 1 August 2024 – instead of the original planned date of June 2024.

The implementation timeline included in the e-invoicing guidelines was updated at the end of October 2023, and the Malaysian tax authority has shared a new phased timeline:

This proposal offers more time for taxpayers to prepare for the new e-invoicing mandate, although these postponements are not significant. Taxpayers in the first implementation group should start preparing imminently for the new e-invoicing system in order to comply by August 2024.

Currently, the IRBM is set to release a software development kit including the relevant technical documentation by the end of 2023.

Interested in finding out more about e-invoicing’s global rise? Read our dedicated E-invoicing Guide.

 

Update: 25 July 2023 by Enis Gencer

E-Invoicing in Malaysia Explained

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.

Scope of the Malaysian e-invoicing mandate

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.

How will businesses issue e-invoices?

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.

Key requirements for Malaysia’s e-invoicing system

Implementation Timeline

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.

What’s next?

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.

What is B2G e-invoicing in Portugal?

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.

What is a B2G e-invoice?

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.

What are the consequences of non-compliance?

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:

  1. Judicial fulfilment of the obligation: an invoice that does not comply with B2G e-invoicing rules is in breach of a legal obligation and the issuer may be required to fulfil this obligation by judicial means.
  2. Non-payment of the invoice: the public contractor must refuse to pay a non-compliant invoice since this constitutes a violation of rules applicable to the payment of public expenditure.
  3. Inability to demand payment: the supplier will not be able to demand the fulfilment of the contract by the debtor since the established legal form has not been observed.
  4. Non-performance of the contract: if the contract also includes the legal obligation to issue and receive e-invoices in CIUS-PT, non-compliance may lead to an additional breach of contract and the application of contractual sanctions. Ultimately, it may also result in contract cancellation and impede participation in future public procurement processes.

When do companies need to comply with B2G e-invoicing in Portugal?

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.

Scope of application for e-invoicing in the Dominican Republic

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.

Recognition and authorisation

All electronic invoice issuers in the country shall:

  1. Be recognised and authorised as such by the General Directorate of Internal Taxes (DGII)
  2. Have a digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by the Dominican Institute of Telecommunications (INDOTEL).

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.

Validation of the electronic invoice in the Dominican Republic

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.

Dominican Republic: Electronic Invoicing Tax System

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).

Issuance, conservation, types and sequence of electronic tax receipts

The three forms of Issuance of Electronic Tax Receipts (E-CF) are as follows:

  1. Self-developed systems: The DGII will authorise taxpayers who wish to join electronic invoicing through its own development system, if they meet the requirements established for the issuance and receipt of E-CF
  2. Electronic invoicing service providers: The taxpayer may implement an electronic invoicing system through a service provider that has been certified in compliance with the current regulations established by the DGII
  3. Free billing: The DGII will have a free technological facility for issuing electronic tax receipts, aimed at taxpayers who meet the criteria defined for the use of this tool and dictated by the means established by the DGII

Online validation

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.

Types of electronic tax receipt (E-CF) or electronic tax documents

There are 10 types of electronic tax receipts or documents as part of the law. These include:

  1. Electronic Tax Credit Invoice
  2. Electronic Consumption Bill
  3. Electronic Debit Note
  4. Electronic Credit Note
  5. Electronic Voucher for Special Regimes
  6. Electronic Government Receipt
  7. Electronic Proof of Purchase
  8. Electronic Receipt for Small Expenses
  9. Electronic Receipt for Foreign Payments
  10. Electronic Proof for Exports

Sequence of electronic tax receipts

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.

Duties of Electronic Issuers

The duties required of electronic issues, in order, consist of:

  1. Sign all E-CFs issued with a valid Digital Certificate
  2. Receive all E-CFs from their suppliers that are validly issued
  3. Comply with the technical requirements that the DGII provides
  4. To exhibit all the information that the DGII requires
  5. Keep the E-CF in accordance with the provisions of the Tax Code

Standard format for the structure

The standard format for the structure of E-CFs is as follows:

  1. Document identification data
  2. Data relating to the Electronic Issuer
  3. Data relating to the Electronic Receiving Buyer
  4. Data relating to the good or service traded
  5. Data relating to the value of the transaction
  6. Tax data
  7. Date and time of the digital signature
  8. Digital signature

Taxpayers must indicate data that modifies or affects electronic tax receipts of credit and debit notes.

Implementation schedule for e-invoicing in the Dominican Republic

  1. Large national taxpayers: 12 months from the law’s entry into force (18 May 2024).
  2. Large local and medium-sized taxpayers: 24 months from the law’s entry into force (18 May 2025).
  3. Small, micro and unclassified taxpayers: 36 months from the law’s entry into force (18 May 2026).

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.

Voluntary period and incentives

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.

Sovos is one of a short list of applicants to register as a Partner Dematerialization Platform (PDP). The company, with its 20 years of international business process and data expertise in international tax compliance, will benefit from an SAP extension, one of the few available on the market. 

London, 27, June 2023 – International tax compliance software provider Sovos announces its application for registration as a dematerialization platform partner (PDP).

France is introducing a major e-invoicing and e-reporting reform which will be rolled out in a phased approach initially to the largest companies from 1 July 2024 and run beyond 2026.  Since the beginning of May this year various software publishers and ERPs have been able to submit their applications to the French government to become an approved PDP.

PDPs are playing a key role in this VAT reform. As trusted third parties, these portals will act as the interface between companies and the French government and will be directly involved in issuing and receiving invoices. The aim is for companies to choose the methods and formats for exchanging their electronic invoices (incoming/outgoing) with the obligation to communicate invoicing, transaction and payment data to the authorities.

International e-invoicing experience 

Sovos has 20 years of business process and data expertise and a global reach with modern cloud architecture that currently processes over 6 billion compliant transactions a year.

The company has extensive experience as a delegate of tax authorities around the world, with several certifications already obtained in various countries in Latin America, as well as in Turkey, where electronic invoicing is now well established. In addition, Sovos is set to be one of the only platforms to feature an extension for SAP, which is designed to provide dematerialization operator (DO) capabilities.

“We’ve seen high demand for a demo of our solution and initial demonstrations to many of the companies that rely on Sovos have been extremely positive and have provided valuable feedback. Our solution not only integrates the legal and technical requirements for France, but also leverages all the best practices from our decades of experience, and the compliance suite we’ve built, supporting complex obligations for tens of thousands of companies in other jurisdictions” says Cyril Broutin, Product Manager at Sovos.

Providing agility and anticipating future regulatory changes 

E-invoicing regulations are regularly modified and updated and are therefore constantly evolving. In Italy, for example, the e-invoicing mandate has been revised more than 40 times. In France, the tax authorities have already published four versions of the specifications for the next reform, which are likely to be further amended or supplemented. Added to this is the European “VAT in the Digital Age” (ViDA) initiative and the many changes it will bring. Sovos intends to assert itself as a PDP capable of supporting companies over the long term, taking into account the regulatory changes which will occur after the application of the reform, at both national and European level. Indeed, the e-invoicing reform is part of a more global drive to digitalize taxation.

“Sovos believes that companies want to remain agile and not be held back by the changing compliance requirements they face in France and around the world. That’s why we’ve adopted a deliberate strategy of loosely coupling tax compliance obligations with the process automation requirements sought by businesses. Our aim is to enable companies to focus on their core business by removing the friction of complex tax digitization mandates. ” explains Cyril Broutin.

About Sovos
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting, and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe and is owned by Hg and TA Associates. For more information visit sovos.com and follow us on LinkedIn and Twitter.

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.

Scope of the Spanish B2B e-invoicing mandate

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.

Main requirements of the Spanish e-invoicing system

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:

Accepted e-invoice formats

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:

  1. XML CEFACT/ONU as specified in the XML schemas 16B (SCRDM – CII)
  2. UBL as defined in the ISO/IEC 19845:2015 standard
  3. EDIFACT per the ISO 9735 standard
  4. Facturae, in the version for invoicing between entrepreneurs and professionals in force at any given time

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.

Communication of e-invoice status

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:

  1. a) Commercial Acceptance or Rejection of the invoice and its date
  2. b) Full effective payment of the invoice and its date

Additionally, the draft regulation establishes optional statuses:

  1. c) Partial commercial acceptance or rejection of the invoice and its date
  2. d) Partial payment of the invoice, amount paid, and its date
  3. e) Assignment of the invoice to a third party for collection or payment, with identification of the assignee and the date of assignment

Implementation timelines

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.

What’s next?

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.

For an overview about other VAT-related requirements in Spain read this comprehensive page about VAT compliance in Spain.

In July 2023, the French authorities postponed the implementation timeline. A new timeline will be announced with the adoption of the finance law for 2024.

When your organisation trades cross-border, regular changes to the regulatory landscape are a given. Whether those changes are brand-new requirements in a country where you do business or the evolution of existing legislation, you must be ahead of the developments to remain compliant.

With global tax authorities continually making progress with their digitization strategies, the e-invoicing revolution continues at speed.

In this quarter’s instalment of our VAT Snapshot webinar, Kelly Muniz and Enis Gencer from Sovos’ Regulatory Analysis and Design team, will look in detail at anticipated changes in countries with emerging digital strategies and discuss updates to some of the more established regimes.

They will cover:

Join our 30-minute update on 13 July for the latest news, and for an opportunity to put your questions to our speakers.

Register today

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, outside of South Korea, is new to the tax digitization journey 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.

 

E-Invoicing in Malaysia:

In October 2022, the Malaysian Ministry of Finance announced their plans to implement a CTC model.

Malaysia appears to be following a CTC clearance model for certain transactions, 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 cover all domestic (B2G, B2B and B2C) and cross-border transactions.

The scope of transactions that are subject, per default, to mandatory e-invoicing are B2B and B2G in the following sectors: automotive, aviation, luxury goods and jewellery, construction, licensed betting and gaming, and payments to agents, dealers and distributors.

Malaysia will also follow a CTC reporting model for all other transactions where e-invoicing is not mandatory and not requested by the buyer. In these cases, taxpayers will be allowed to issue invoices and receipts as per the current practices and then report them monthly through the issuance of a consolidated e-invoice.

The mandate will be rolled out in a phased manner starting in August 2024 for taxpayers with an annual turnover or revenue of more than MR100 million, and it will apply to all businesses from July 2025.

Read more about e-invoicing in Malaysia here.

 

E-Invoicing in Thailand

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.

Read more about e-invoicing in Thailand here.

 

E-Invoicing in South Korea:

E-invoicing has been mandatory in South Korea since 2011 with the implementation of their Electronic Tax Invoice System.

The scope of the e-invoicing obligation covers all corporations as well as individual taxable persons that exceed a certain turnover threshold. Since entering into effect in January 2012, the scope for sole proprietors has been reduced from 1 billion KRW to 0.1 billion KRW in July 2023.

South Korea´s Electronic Tax Invoice System is considered to be a CTC (Continuous Transaction Control) model – not due to the e-invoicing requirements, since the Tax Authority does not interfere in the process of their issuance, as opposed to CTC clearance models. Instead, it has a CTC reporting model in place as all e-tax invoices must be reported to National Tax Service (NTS) within one day of issuance.

The scope of the mandate in the country covers only domestic transactions (B2G, B2B and B2C). Cross-border transactions are out of scope.

Read more about e-invoicing in South Korea here.

 

E-Invoicing in China:

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.

Following the recent developments in China regarding the Pilot Program for e-Invoicing, which was expanded to new provinces and cities in November 2023, the last province of Tibet has now implemented issuing fully digitalized electronic invoices (e-fapiao) for selected taxpayers.

Therefore, from 1 December 2023, the Pilot Program has expanded nationwide and all regions in China allow pilot taxpayers to issue fully digitalized invoices. This means that the selected taxpayers – or, depending on the province, newly registered ones – will be obliged to issue e-invoices (e-fapiao) after receiving notification from the tax authorities.

Read more about e-invoicing in China here.

 

E-Invoicing in Singapore

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.

 

E-Invoicing in Japan

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.

Read more about e-invoicing in Japan here.

 

E-Invoicing in the Philippines

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.

Read more about e-invoicing in the Philippines here.

 

E-Invoicing in India:

India’s Goods and Services Tax (GST) framework introduced an e-invoicing system which falls under the Continuous Transaction Controls (CTCs) category, to improve tax compliance and reduce evasion.

This system mandates the reporting of invoice data to an Invoice Registration Portal (IRP) for clearance before the exchange with the trading party. For an invoice to be legally valid, it must include an Invoice Registration Number (IRN) obtained from an IRP. This requirement applies to B2B, B2G, and export transactions. Invoice data must be submitted in JSON format to IRPs, although invoices can be exchanged in JSON, PDF, or paper form, with a mandatory archiving period of eight years.

The e-invoicing rollout began voluntarily in January 2020 for businesses with turnovers exceeding Rs. 500 Crore, gradually extending to smaller businesses. By August 2023, the mandate applies to taxpayers with annual turnovers of Rs. 5 Crore or more. Non-compliance, such as failing to register an invoice on the IRP, incurs penalties of at least Rs. 10,000 per instance, along with additional GST penalties and interest.

Read more about e-invoicing in India here.

 

E-Invoicing in Indonesia:

Indonesia has embraced digital transformation in its tax system by introducing the e-Faktur system in 2014, becoming effective in 2016. This move towards electronic invoicing is a strategic effort to combat tax evasion and narrow the tax gap through continuous transaction controls (CTCs).

Mandatory for all corporate VAT taxpayers since July 2016, e-Faktur requires invoices to be generated through approved systems and validated by the Directorate General of Taxes (DGT) before being issued. Invoices must include tax invoice series number (“NSFP”) allocated by the DGT, and a QR Code. This CTC system enforces the use of electronic signatures and mandates processing through the eFaktur platform.

Read more about e-invoicing in Indonesia here.

 

E-Invoicing in Vietnam:

Vietnam advanced its tax compliance efforts by implementing a nationwide e-invoicing mandate from 1 July 2022, aimed at combating VAT fraud and reducing the VAT gap. Initially planned for July 2020 but delayed, the new timeline was established in October 2020 with Decree 123. The rollout begun in March 2022 in select provinces and cities, moving to a full national implementation by July. The initial implementation phase involved technical solutions in six local tax administrations, and expanded to all provinces by April 2022, setting a comprehensive framework for e-invoicing compliance across Vietnam.

This mandate requires all businesses, including enterprises, organizations, business households, and individuals, to register for and issue e-invoices in XML format for transactions.

Vietnam’s e-invoicing system distinguishes between authenticated e-invoices, which require a tax authority code before being sent to the buyer, and unauthenticated e-invoices, which do not require said unique code. Most taxpayers in Vietnam must issue authenticated e-invoices to comply with this mandate. E-invoices must be digitally signed by the supplier and archived electronically with secure and reliable methods to ensure integrity and authenticity.

Read more about e-invoicing in Vietnam here.

 

What to expect in the region

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 adopting a CTC system. Businesses must prepare to adopt the new e-invoice compliance requirements trending around the world, and in particular, across Asia.

Get in touch with our tax experts for a global e-invoicing solution.

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.

Scope of the mandatory electronic retention rules in Japan

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.

How to retain e-invoices in Japan

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 retention rules for scanned invoices

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.

What’s next for e-invoicing in Japan?

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.

What is TicketBAI?

TicketBAI is a joint project of the Provincial Treasuries and the Government of the Basque Country with the objective of implementing a series of legal and technical obligations for the taxpayers’ invoicing software.

These obligations allow the tax authorities to control their economic activities, especially those in the sector of sales of goods and provisions of services. TicketBAI is a joint project, but each region has its particularities in the implementation and sending of files.

TicketBAI is an 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”.

 

Who is affected by TicketBAI?

The TicketBAI mandate applies to all taxpayers, whether a person or a business, that operate economically in a way which falls under the Basque Regional Treasuries regulations. However, the details of the mandate and implementation dates are unique across Bizkaia, Álava and Gipuzkoa.

 

What is TicketBAI in Bizkaia?

TicketBAI invoicing is one of the three elements in Bizkaia’s Batuz tax control strategy, devised with the aim of reducing tax tampering in the region.

Taxpayers subject to Batuz will be obliged to issue invoices using TicketBAI-compliant software, which must meet 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 specific requirements in each province is crucial to ensure compliance for affected taxpayers.

 

What are TicketBAi invoice requirements in Bizkaia?

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.

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).

 

How does TicketBAI affect e-invoices?

In Bizkaia, for electronic invoices for relevant transactions to be valid under TicketBAI obligations, they have to be issued by the TicketBAI invoicing software and must contain specific information. The invoices can be issued either paper or electronically in any format as per invoice requirements already established by Bizkaia regulations.

TicketBAI-compliant invoices must also include:

Which operations are subject to TicketBAI issuance rules?

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.

 

How to comply with TicketBAI invoicing in Bizkaia?

The Bizkaia government has already made the voluntary adoption of Batuz possible. Starting 1 January 2024, taxpayers will be obliged to comply.

Currently, a draft law is being discussed to postpone Batuz obligations, including TicketBAI, for:

As it is still a draft, it needs to be officially published to become effective. The draft, however, does not propose changing the go-live for large companies, which are still expected to comply starting 1 January 2024. For all other groups, a phased implementation is proposed to start on 1 July 2024 and be completed on 1 January 2026.

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.

 

How to comply with TicketBAI invoicing in Álava

TicketBAI’s implementation in Álava came in phases over 2022, starting with a voluntary period that commenced on 1 January. The mandate came into effect for all on 1 December 2022.

As a result, taxpayers in the province of Álava have to comply with TicketBAI invoicing. It is important to note that TicketBAI compliance does not exempt taxpayers who are also obliged to comply with SII.

To comply with TicketBAI, businesses must have software which generates XML files for each transaction it makes.

 

How to comply with TicketBAI invoicing in Gipuzkoa

Gipuzkoa’s implementation of its TicketBAI obligation began on 1 January 2021, starting with a voluntary period for taxpayers. The phased roll out of the mandate was made by sectors of activity and ended on 1 June 2023.

In Gipuzkoa, TicketBAI does not exempt taxpayers from their SII obligations.

As with other Bizkaia provinces, relevant taxpayers in Gipuzkoa must use software which generates XML files for transactions.

 

How Sovos can help with VAT compliance in Spain

Complying with TicketBAI is just one aspect of total VAT compliance in Spain. As previously mentioned in this blog, taxpayers are not exempt from the SII mandate when complying with TicketBAI so it is important to know the rules at play there.

It is also worth noting that TicketBAI is separate from the Spain e-invoicing mandates that are in place across B2G and B2B transactions.

If you need help with VAT compliance in Spain, don’t hesitate and speak to our experts.

5 Questions to Ask Yourself

Important NoteThe Finance Law for 2024 is presently in draft form and remains subject to ongoing modifications prior to adoption. Our blog, France: B2B E-Invoicing Mandate Postponed, is promptly updated whenever there are changes to the rollout of the French mandate .

 

Tax compliance in France is already complicated. New e-invoicing and e-reporting regulations being introduced by the DGFIP 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. 

1. Can your PDP cope with the growing compliance obligations of these new e-invoicing processes?

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. 

 

2. The only constant is change – is your PDP equipped to handle France’s e-invoicing regulations as these evolve?

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. 

 

3. Are you aware of the total impact not meeting increasingly strict compliance requirements can have?

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. 

  

4. Are you 100% confident of e-invoicing continuity?

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. 

  

5. Network size will no longer matter – is your would-be PDP saying otherwise?

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 36 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. 

 Looking for a PDP you can genuinely trust to take care of the complex obligations you face due to France’s upcoming e-invoice mandate?

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.

What is Batuz?

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:

  1. Compliant invoicing software (TicketBAI)
  2. Ledger Reporting Economic Operations (LROE)
  3. Provision of draft tax returns prepared by the tax authority

Batuz characteristics

The tax authority based Batuz on the three pillars listed above. Each one entails the following set of obligations that, together, encompass compliance:

  1. TicketBAI invoicing software: Taxpayers must adjust their invoicing software to comply with specific standards to guarantee the integrity, conservation, traceability and inviolability of records that document the supply of goods and services.
    Invoices generated by TicketBAI software must carry a unique identification code and a QR code. Additionally, for every issued invoice, the software must create a record in the XML TicketBAI format schema with a digital signature to be incorporated into the LROE.
    The compliant software must be in the TicketBAI guarantor software registry. The tax administrations of Álava, Bizkaia and Gipuzkoa, in collaboration with the Basque Government, manage the TicketBAI initiative. However, each territory has their own rules and timelines for implementing TicketBAI.
  2. Ledger of Economic Operations (Libro Registro de Operaciones Económicas): This is the electronic ledger comprised of six chapters in which income, expenses and invoices of the companies who carry out economic activities will be declared via model 240. Generally, the ledger must be transmitted quarterly to the Bizkaia tax authority. For companies under the SII mandate, however, the deadline is four days from operation completion. Nonetheless, the authority will consider the SII obligation as fulfilled by sending the LROE by the applicable deadline.
  3. Preparation of draft VAT and income tax returns: Finally, with the information from the LROE, the Bizkaia tax authority will prepare drafts of VAT, corporate and income returns and make them available to covered taxpayers.

Batuz deadlines

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.

For an overview about other VAT-related requirements in Spain read this comprehensive page about VAT compliance in Spain.