Update: 10 February 2023 by Carolina Silva
Understanding Spain’s Verifactu system
The Spanish government is pursuing various routes for digitizing tax controls, including introducing software requirements on the billing system.
In February 2022, Spain published a Draft Royal Decree establishing invoicing and billing software requirements to secure Spanish antifraud regulations.
The Draft Decree ensures billing software meet the legal requirements of integrity, conservation, accessibility, legibility, traceability and inalterability of billing records. It sets standards for systems known as SIF (Sistemas Informaticos de Facturación).
To comply with SIF standards, taxpayers may use a Verifactu system – a verifiable invoice issuance system which is further detailed later in this article.
Since publishing the Draft Decree and concluding its public consultation, the Spanish tax authority has released draft technical specifications for the Verifactu system and a list of modifications to be introduced to the Draft Decree. One is the estimated date of entry into force of the billing software requirements.
What is a Verifactu billing system?
Among the many SIF requirements established in the Draft Decree is the capability to generate a billing record in XML format for each sale of goods or provision of services. This needs to be sent to the tax authority simultaneously or immediately before the issuance of the invoice.
The Draft Decree establishes two alternative systems taxpayers can adopt to comply with the technical standards of the SIF: the ordinary SIF and the Verifactu system.
A Verifactu system is a verifiable invoice issuance system, and its adoption is voluntary under the Draft Decree. Taxpayers who use computer billing systems to comply with invoicing obligations may choose to continuously send all the billing records generated by their systems to the tax authority.
A Verifactu billing system complies with all the technical obligations imposed by the Draft Decree., Taxpayers use the system to effectively send all billing records electronically in a continuous, automatic, consecutive, instantaneous, and reliable manner.
Benefits of the Verifactu billing system
A taxpayer opts for a “verifiable invoice issuance system” by systematically initiating the transmission of billing records to the tax authority. If the systems are Verifactu, invoices must include a phrase stating so.
There are several benefits for taxpayers who decide to opt for a Verifactu system:
- As companies send the billing records to the tax authority, the formal acceptance response will automatically incorporate the information from such records into the taxpayer’s book of issued invoices.
Current deadlines
Taxpayers and SIF developers must be aware of several deadlines set forth by the Spanish tax authority. These are still part of the draft development of the SIF and official deadlines are outstanding:
- From 1 July 2024: Only ordinary SIF or Verifactu-approved billing systems may be used to prepare and submit invoices. The Draft Decree deadline was 1 January 2024, but the Spanish authority postponed it following a public consultation.
- Billing software developers and sellers must offer their product fully adapted within a maximum period of nine months from the regulation’s entry into force.
- Also within nine months, the Spanish tax authority must ensure that the service for receiving billing records for the Verifactu systems becomes available.
What’s next?
Although still in draft form, it’s expected there will be official publication of the Draft Royal Decree – along with a Ministerial Order detailing the technical and functional specifications of the billing systems. Official publication of the Verifactu technical specifications is to come.
The Draft Decree explicitly states that its implementation is compatible with an electronic invoicing mandate which is also underway in Spain. Therefore, taxpayers must ready themselves to comply.
For further information on the incoming changes to tax in Spain, speak with a member of our expert team.
Update: 24 February 2022 by Victor Duarte
The Spanish Ministry of Finance has published a draft resolution that will – once adopted – establish the requirements for software and systems that support the billing processes of businesses and professionals. This law will have a significant impact on the current invoice issuance processes. It will require implementing new invoice content requirements, including a QR code, and the generation of billing records by January 2024.
The regulation is also intended to adapt the Spanish business sector, especially SMEs, micro-enterprises, and the self-employed, to the demands of digitization. For this, it is considered necessary to standardise and modernise the computer programs that support the accounting, billing, and management of businesses and entrepreneurs.
Scope of the regulation
The regulation establishes the requirements that any system must meet to guarantee the integrity, conservation, accessibility, legibility, traceability and inalterability of the billing records without interpolations, omissions or alterations.
The new rules established in the regulation will apply to:
- Taxpayers subject to corporate tax (IS), except for exempt or partially exempt entities.
- Taxpayers subject to income tax for physical persons (IRPF) who obtain income from economic activities.
- Taxpayers subject to income tax for non-residents (IRNR) with a permanent establishment in Spain.
- Entities under the income allocation system carrying out economic activities.
Companies that do not fall within the above categories do not need to comply, but those who do must ensure their computer systems are adapted to this regulation as of 1 January 2024.
New invoice content requirements: ID and QR codes
Invoices generated by the computer systems or electronic systems and programs that support the billing processes of businesses and professionals must include an alphanumeric identification code and a QR code, generated per the technical and functional specifications established by the Ministry of Finance.
Billing system requirements
The computer systems that support billing processes must have the capability to:
- Generate a billing record for each delivery of goods or provision of services, simultaneously or immediately before the issuance of the invoice.
- The computer system must be able to send all the billing records generated to the State Tax Administration Agency (AEAT) in a continuous, secure, correct, complete, automatic, consecutive, instantaneous, and reliable manner.
- The system must be provided with traceability, verifying the sequence of data creation. It will create an event log that collects all the system operations and incidents during its use.
- The records created may not be altered by the user or any internal or external means.
- The systems must add a fingerprint or ‘hash’ to the billing records, according to the specifications and the electronic signature.
To achieve these ends, all computer systems must certify that they ensure the commitment to comply with all the requirements established in this regulation through a “responsible statement”. The Ministry of Finance will establish the minimum content of this statement later in a new resolution.
Billing record content and its optional transmission
The billing records must comply with several content requirements laid down by the regulation.
The taxpayers using computer systems to comply with their invoicing obligations may voluntarily send all its billing records generated by the computer systems to the AEAT automatically by electronic means. The response of a formal acceptance message from the AEAT will automatically mean that these records have been incorporated into the taxpayer’s sales and income ledgers.
Tax administration audits
The AEAT may appear in person where the computer system is located or used and may require full and immediate access to the data record, obtaining, where appropriate, the username, password and any other security key that is necessary for full access.
The AEAT may request a copy of the billing records, which companies may provide in electronic format through physical support or by electronic means.
Application to the B2B e-invoicing mandate
The regulation doesn’t include any specific rule for the B2B e-invoice mandate draft decree currently being discussed in Congress and waiting for approval. However, if the mandate is approved, all the B2B e-invoices issued under this draft decree will have to comply with all the new rules established in this regulation.
Next steps
While this new regulation does not seem to take Spain further down the continuous transaction control (CTC) route, the proposal has clear similarities with Portugal’s invoice requirements.
The draft resolution establishing these is currently open for public consultation until 11 March 2022. Once this resolution is approved, the Ministry of Finance will publish the technical and functional specifications needed to comply with the new requirements and the structure, content, detail, format, design and characteristics of the information that companies must include in the billing records.
The Ministry of Finance will also publish the specifications of the signature policy and the requirements that the fingerprint or ‘hash’ must meet. Once these details are published, it will be clearer whether Spain is going down the Portuguese route or carving out its own path.
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