When considering motor insurance, it’s worth remembering that everything is high – from tax rates to the amount of administration required.
This blog explains motor insurance in Europe, covering the types of applicable taxes, how they are calculated, vehicle exemptions and more.
According to Annex 1 of the Directive 2009/138/EC of the European Parliament and of the Council of the EU, often known as the Solvency II Directive, motor vehicle insurance policies are classified as Class 3 Land vehicles (other than railway rolling stocks).
This business category covers any damage or loss to:
Class 10 Motor Vehicle Liability is another business class that covers motor-related risks. This business class covers all risks associated with liabilities deriving from the operation of motor vehicles on land.
A third-party motor vehicle insurance coverage guarantees that if an accident happens and/or damage occurs to another person’s vehicle, the expenses of the accident or damage are covered by the insurer of the person who caused the accident or damage.
We must not forget Directive 2009/103/EC on civil liability insurance for motor vehicles which governs mandatory motor insurance policies throughout Europe. One of the directive’s main principles is that all motor vehicles in the EU must have third-party liability insurance.
We should also mention that the European Parliament and the Council adopted the Directive (EU) 2021/2118 on 24 November 2021, aiming to modernise and amend the aforementioned directive with a deadline for the transposition of 31 December 2023.
In this blog, we outline the main characteristics of the taxation of motor-related insurance policies.
Premiums derived from motor-related policies are often subject to several types of insurance premium taxes. Class 3 risks are primarily subject to insurance premium tax (IPT), whereas mandatory third-party liability (MTPL) policies are subject to a wide range of taxes.
This may include IPT and/or payments to guarantee funds, as well as additional levies, charges, or contributions such as:
There is also the traffic safety fee, Automobile Rente (CAR) payment, automobile insurance bureau levy and rescue tax. This list goes on.
The disclosure and payment rules are also diverse. These fees can be paid yearly, monthly, quarterly or in instalments – with or without prepayments or final adjustments.
If IPT is charged on the motor hull or the MTPL policies, it is typically based on the premium amounts received, with the tax being a percentage of the premium. This is not the case in Austria, for example, where the computation of MTPL taxes is complicated.
The tax is calculated based on the engine’s horsepower and CO2 emissions. It also varies depending on the registration date of the vehicle, the frequency of payment and whether the 2017/1151 EU law applies to the vehicle. On top of that, no payment is due if the size of the engine does not reach 24kW or 65 kW. Contrary to the Austrian example, the IPT rate in Hungary is 23% – based on the premium amount.
Contributions to the Guarantee Fund are typically calculated as a percentage of the premium, as in France, Greece or Sweden. However, this fee can also be fixed as it is in Denmark, for example.
Most countries exempt premium amounts from policies covering motor hull or MTPL risks based on the following:
If the vehicle is operated by the authorities – such as police vehicles, fire trucks, or ambulances – or the armed services, it is typically exempt. Cars driven by disabled individuals and buses used for public transportation are likewise excluded in most cases. Insurance policies covering electric or hybrid vehicles may be excluded as well.
Sovos can provide advice on motor-related insurance premium taxation. Our compliance team may be able to help you in settling IPT in various countries across Europe, contact us today.
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.
Intrastat thresholds are value thresholds which decide if companies in an EU Member State qualify to file a return to tax authorities, based on their intra-community trading. These thresholds change annually, prompting businesses to conduct an annual recalculation to know their obligations.
This blog contains all the Intrastat reporting thresholds for 2023, as well as important information for businesses trading within the EU. It will be updated to reflect any changes as soon as they are implemented.
Level up your Intrastat knowledge with our handy Intrastat guide, which covers reporting requirements, returns and declarations, commodity codes, how Sovos can help and more.
Intrastat thresholds are annual value thresholds that decide whether businesses must declare their intra-EU trades to the relevant national tax authorities.
While Intrastat is based on a European Union regulation, Member States have implemented the rule differently. As such, companies trading across the EU must be aware of the exemption threshold for each country they trade in – whether that’s acquiring or dispatching goods.
When a business exceeds the threshold in a Member State, it must continue to file Intrastat returns with the country until the applicable January-to-December period has concluded.
Intrastat thresholds must be calculated each year as they change annually, and there are separate values for arrivals and dispatches.
To make it easy for your business, we have listed all the Intrastat thresholds below in a table – country-by-country. Find out whether your company needs to file an Intrastat return in EU Member States where you do business.
The current Intrastat thresholds have been in place since the beginning of the year. They are due to change again in 2024. For the current applicable thresholds for your business, view the table below.
The table will be kept updated with the latest threshold values.
| Country | Arrivals | Dispatches |
| Austria | EUR 1.1 million | EUR 1.1 million |
| Belgium | EUR 1.5 million | EUR 1 million |
| Bulgaria | BGN 700.000 | BGN 1 million |
| Croatia | EUR 400.000 | EUR 200.000 |
| Cyprus | EUR 270.000 | EUR 75.000 |
| Czech Republic | CZK 12 million | CZK 12 million |
| Denmark | DKK 22 million | DKK 11 million |
| Estonia | EUR 400.000 | EUR 270.000 |
| Finland | EUR 800.000 | EUR 800.000 |
| France | No threshold | No threshold |
| Germany | EUR 800.000 | EUR 500.000 |
| Greece | EUR 150.000 | EUR 90.000 |
| Hungary | HUF 250 million | HUF 140 million |
| Ireland | EUR 500.000 | EUR 635.000 |
| Italy | EUR 350.000 (goods) EUR 100.000 (services) |
No threshold |
| Latvia | EUR 330.000 | EUR 200.000 |
| Lithuania | EUR 500.000 | EUR 300.000 |
| Luxembourg | EUR 250.000 | EUR 200.000 |
| Malta | EUR 700 | EUR 700 |
| Netherlands | The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities. | The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities. |
| Poland | PLN 5 million | PLN 2.7 million |
| Portugal | EUR 400.000 | EUR 400.000 |
| Romania | RON 1 million | RON 1 million |
| Slovakia | EUR 1 million | EUR 1 million |
| Slovenia | EUR 200.000 | EUR 270.000 |
| Spain | EUR 400.000 | EUR 400.000 |
| Sweden | SEK 15 million | SEK 4.5 million |
| United Kingdom | GBP 500.000 | GBP 250.000 |
Businesses that trade within an EU Member State but at figures lower than those listed in the above table are not required to file Intrastat returns. There are additional nuances that exist on a country-by-country basis that may change the obligations of a company.
The Netherlands removed its threshold in 2023. Its tax authorities will notify taxpayers subject to submitting Intrastat returns. They monitor intra-community transactions performed by domestic taxpayers monthly.
Italy and France differ from other countries as it has combined Intrastat returns and ECSL returns into a single declaration.
It can be difficult to stay on top of Intrastat, especially with the variety among countries, but Sovos can help. Contact our team of experts to find out how we can assist.
If you are interested in learning more about European VAT compliance, download our free eBook.
Sovos’ Advanced Periodic Reporting (APR) is a cloud solution. It mitigates the risks and costs of compliance, futureproofing and streamlining the handling of your periodic reporting – including Intrastat.
Our solution automates, centralises and standardises the preparation, reconciliation, amendment and validation of summary reports to make meeting your obligations simple.
Intrastat is an obligation created in 1993 that applies to certain businesses that trade internationally in the European Union. Specifically, it relates to the movement of goods – arrivals and dispatches – across EU Member States.
The requirements of Intrastat remain similar across the EU, though certain Member States have implemented rules differently. As a result, it can be confusing when trading cross-border in the region.
From reports and returns to thresholds and specific codes, knowing what applies to your business and how to comply is important. Consider this your go-to guide to understand Intrastat rules, requirements, reporting and terminology.
Intrastat reporting largely involves statistics but does occasionally require fiscal data. The information needed depends on the threshold of the EU Member State that your business is established within.
The mandatory data in Intrastat reports were originally regulated by Article 9 of Regulation (EC) No 638/2004, which is no longer in force, though it also lists optional elements for reporting consistency across the EU. Typical data requirements included:
In 2022, a project for the modernisation of Intrastat was introduced, Regulation (EC) No 638/2004 was abolished, and a new Regulation 2019/2152 entered into force. In addition to the data mentioned above, it made the following information mandatory in all Member States:
Optionally, Member States can also opt to ask for:
An Intrastat return, also known as an Intrastat declaration, replaced customs declarations in 1993 to serve as the source of trade statistics within the European Union.
These returns provide the European Commission, as well as EU National Customs Authorities, with detailed insights into the goods being traded in the European Union. Due to the information required in the declarations, authorities can identify the kinds of goods that are circulating, as well as the volume of such goods.
If a company does not submit Intrastat returns when qualifying to do so it might be liable to hefty fines.
It’s important to understand how Intrastat works with other compliance obligations in general, such as submitting VAT returns, recapitulative statements (EC Sales Lists) and, notably for e-commerce sellers in the EU, schemes like Union OSS.
Intrastat returns are required when your business dispatches goods to or acquires goods from another EU Member State when the value exceeds the country’s threshold. Each Member State sets the deadline for the submission of declarations to its respective national tax authority.
In Germany, for example, applicable businesses must report every month, with each declaration required within 10 days after the end of the reporting period ending. This can be done online or through the Germany statistics authority portal.
Your business should check the value of goods traded within EU Member States for the past year to see whether they exceed national thresholds.
Qualifying thresholds dictate whether a business must register for Intrastat or not. These thresholds must be calculated each year, with each EU Member State having its own figure that changes annually.
When a threshold is exceeded in a country, businesses should continue to file Intrastat returns until the applicable January-December period is complete.
Read our blog for a comprehensive Intrastat threshold table containing each country’s qualifying figure.
Otherwise known as commodity codes or Combined Nomenclature (CN), Intrastat numbers are part of a system allowing authorities to identify the types of goods traded across the European Union. The requirements for Intrastat numbers are largely the same across EU Member States, with just a few exceptions.
These numbers, or codes, are part of an eight-digit system that is comprised of Harmonized System (HS) codes and EU subdivisions. They contain complete nomenclature for the description of goods and are subject to annual revisions, ensuring they are up to date with technology and trading patterns.
The European Commission published the Intrastat numbers for 2023 in October 2022.
Sovos’ SAP Framework for periodic reports including Intrastat takes care of the extraction of data required to generate periodic reporting for businesses. Sovos’ solution generates compliant Intrastat reports by extracting data from required SAP modules. Using SAP with this add-on provides a framework for periodic returns including Intrastat, EC Sales Lists and SAF-T.
In turn, this increases the ease of compliance and reduces the risk of penalties from incorrect filings – producing cost and time savings for your business.
Speak to our team about how we can help with Intrastat compliance.
Intrastat returns are still required by businesses registered for VAT in the UK, even after Brexit, with respect to supplies of goods from the EU into Northern Ireland and vice-versa.
Businesses in the EU that trade goods with other EU countries – whether they’re dispatched or received – need to file Intrastat returns if the annual trade value exceeds the applicable country’s threshold.
Intrastat is a system which allows the European Union to track traded goods between its Member States. It was devised to replace customs reporting on the movement of goods within the EU, which stopped in 1993.
Intrastat divides goods into categories that are identified by eight-digit codes. These categories are typically referred to as Intrastat codes, commodity codes or Combined Nomenclature (CN).
Want to learn about EU VAT compliance? Our Introduction to EU VAT is a great place to start. We also have specific guides to help you understand important EU tax requirements, including the EU VAT e-commerce package and VAT between European countries.
The speed at which regulations and requirements evolve can make it difficult to stay abreast of VAT Reporting and SAF-T.
Remaining knowledgeable about recent changes enforced by tax authorities is the initial stride towards readiness for repercussions.
In Sovos’ most recent quarterly update webinar on VAT Reporting and SAF-T, Inês Carvalho, Regulatory Counsel, delves into the freshest legislative revisions concerning VAT reporting and SAF-T and the potential implications for your business.
In this webinar, our expert will cover updates on:
Are you in search of a new Insurance Premium Tax (IPT) provider? Need guidance on making a smooth transition? Join our exclusive live Q&A webinar, “Choosing a New IPT Provider,” where we’ll address all your inquiries and help you confidently navigate this important decision.
Changing IPT providers can be a daunting process, but we’re here to simplify the transition for you with our industry expertise and hands-on experience. Our team has successfully assisted numerous clients in finding the right IPT solution that aligns with their needs, and we’re excited to share our knowledge with you.
Sovos’ recent observations of audits by EU Tax Authorities are that Tax Officers are paying more attention to the contents of One Stop Shop (OSS) VAT Returns. They have challenged, and even excluded, companies from this optional scheme.
OSS VAT returns must contain details of supplies made to customers in each Member State of consumption by the taxable person. Supplies that need to be reported are as follows.
Supplies of services to non-taxable persons taking place in the EU. This includes supplies of services taking place in the Member State of identification.
Supplies of services made to non-taxable persons taking place in a Member State in which the supplier is not established. This includes the intra-community distance sales of goods.
Additionally, a taxable person can also declare domestic supplies of goods for which they are a deemed supplier in the Union scheme.
A taxable person might be excluded by the Member State of identification from the scheme for several reasons. Considering the most common reasons, it’s important to note the following:
Let’s look at two case studies to further demonstrate the above.
A taxable person submits a quarterly OSS return and pays the VAT owed by the last day of the month, following the end of each quarter. If they have not sold any goods in the EU during a tax period, they should submit a nil return.
Taxable persons must submit their quarterly OSS VAT returns according to the following schedule.
If the due date falls on a weekend or bank holiday, the deadline is not moved to the next workday.
A company, established and VAT registered in Spain, applied to the optional OSS Scheme under the Union scheme.
This company has an e-commerce store and customers can request delivery to their premises in any EU Member State. Under the terms and conditions on the website, the company clarifies that this channel is only for private individuals.
However, during an audit carried out by the German Tax Authorities, it has been noticed that some supplies are carried out in favour of business customers.
In some cases, the business customers have just shared their company name. In other cases, the companies have included their German VAT number in the purchase order on the internet (e.g. under “Additional comments”) and this information has been included on the invoice issued by the Spanish company.
Under these circumstances, the German Tax Office has provided the Spanish company with a warning as:
A company established and VAT-registered in Turkey applied to the optional OSS Scheme under the Union scheme in Slovakia.
This company has an e-commerce store and customers request delivery from Slovakia, where the main supplier of the Turkish company is located, directly to their premises in any EU Member State.
Due to financial issues, the Turkish company has not paid its VAT liabilities despite submitting the OSS VAT returns on a timely basis.
Slovakian Tax Authorities have decided to exclude the company from the OSS Scheme.
Under these circumstances, the Turkish company:
The information about the supplies, available from EU Tax Authorities, will increase massively with the implementation of the Central Electronic System of Payment information (CESOP).
On 18 February 2020, the EU Council adopted a legislative package requesting payment service providers to transmit information on cross-border payments originating from Member States and on the beneficiary (“the payee”) of these cross-border payments.
Under this package, payment service providers offering services in the EU will have to monitor the payees of cross-border payments. They will have to transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of the Member States.
As mentioned by the Tax Authorities:
Payment Service Providers in the EU will need to report cross-border payments on a quarterly basis as of Q1 2024, with the first report due by 30 April 2024.
We suggest double-checking the quality of the data included in your OSS Returns to the possibility of exclusion from the scheme.
Sovos’ experts are at your disposal to support you through a pre-audit of your data or corresponding with the Tax Authorities. Contact our team for more information.
The Chilean Internal Revenue Service (SII) recently published version 4.00 of the document describing the format of electronic tickets for Sales and Services.
The electronic ticket (or Boleta Electrónica) is an electronic receipt issued for the sale of goods or services to individuals, consumers or end users.
The document includes basic information about the transaction, such as:
The electronic ticket is for less formal, business-to-consumer (B2C) transactions and is subject to less rigorous reporting requirements than electronic invoices (Factura Electrónica). It is often used for smaller transactions, such as retail purchases or services rendered to individuals.
Businesses must use certified invoicing software to generate electronic tickets. These software solutions need to be approved by the Chilean tax authority, the Servicio de Impuestos Internos (SII).
The generated electronic invoices must be digitally signed using an electronic signature to ensure their authenticity and integrity.
Taxpayers authorised as issuers of electronic tickets must digitally send all the electronic tickets issued and generated to the SII. These should follow the Technical Instructions provided in Annex 1 of Resolution 74 of 2020, and any future updates.
In accordance with the Technical Instructions, the electronic ticket must contain the following information:
After generating the electronic tickets, businesses submit them to the SII. Since the SII must validate both the XML format of the document and its electronic signature, the SII has established a limit of 500 ballots per batch.
On the other side of the transaction, the recipient of an electronic ticket can access and verify the invoice through the SII’s online platform. They can accept or reject the invoice, which helps maintain transparency and accurate transactions.
The data generated by this electronic receipt system drives efficiency. For example, businesses can obtain important information, such as:
Businesses must maintain records for six years in the XML format established in version 4.00.
Non-compliance with the electronic invoicing requirements or submitting inaccurate information can lead to penalties. The SII has the authority to audit businesses to ensure compliance with tax regulations.
Are you in financial services or working at a bank with more questions about invoicing in Chile? Speak to our tax experts.
Our latest webinar delves into the intricacies of VAT and reveals key insights into both Business-to-Consumer (B2C) and Business-to-Business (B2B) transactions.
Sovos’ VAT expert Francisco Gomes will share insights for businesses seeking to expand their reach and streamline operations.
In our free 30-minute webinar, you will learn more about:
Don’t miss this opportunity to enhance your understanding of VAT in cross-border trade and unlock the growth potential. Find out more details in our webinar filled with practical insights and expert advice to propel your business forward, and bring your questions to the Q&A session at the end.
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.
Value Added Tax (VAT) recovery is a matter of great significance for businesses; therefore it is crucial to understand the correct procedures for ensuring successful recovery. Businesses can recover their incurred VAT through either their VAT return or by submitting a refund claim.
The deadline for submitting claims under the 8th Directive is rapidly approaching on 30 September 2023. Failing to meet this deadline could result in the rejection of your claim, emphasising the importance of thorough preparation in handling VAT recovery for your business.
To streamline the process and alleviate complexities associated with VAT compliance, utilising the services of a reputable provider like Sovos is highly recommended. By choosing Sovos, you gain access to language capabilities and valuable resources that facilitate your VAT compliance workload.
Participate in Sovos’ VAT expert-led session to enhance your understanding of the following key aspects:
In October 2022, the Malaysian Ministry of Finance announced in its state budget plans to launch a pilot e-invoicing program in 2023 – starting with selected taxpayers.
The budget statement views e-invoices as the main strategy to improve the country’s tax revenue and digital services infrastructure. The Inland Revenue Board of Malaysia (IRBM) and the Malaysian Digital Economy Corporation (MDEC) have been working on the e-invoicing project to meet this goal. They have organised engagement sessions with stakeholders to share details regarding the project.
Following the engagement sessions, the IRBM has published a guideline regarding the implementation details of the upcoming e-invoicing system. The Malaysian e-invoicing system will be a CTC clearance model scheduled to begin in June 2024, with approximately 4,000 companies exceeding the determined threshold.
Read this blog for more information about e-invoicing in Asia.
The new e-invoicing system, called MyInvois, will require all taxpayers engaged in commercial activities to issue invoices electronically in Malaysia. This applies to all individuals and organisations including, but not limited to, associations, corporations and limited liability partnerships.
The transactional scope of the requirements covers all B2B, B2G and B2C transactions – both domestic and cross-border.
The following will be subject to e-invoicing:
A separate guideline will provide further details on the treatment of cross-border transactions.
B2B and B2G e-invoicing will follow a similar workflow, as described below.
For B2C transactions where end consumers do not request e-invoices, suppliers will be allowed to issue receipts or invoices as per the current practices. However, taxpayers must aggregate the receipts or invoices issued to consumers and report them through the e-invoicing system within a set timeframe.
To generate e-invoices, taxpayers must use the MyInvois platform through the free solution provided by IRBM or via APIs. The authentication with the platform is based on digital certificates issued by IRBM.
Taxpayers must create and submit their e-invoices in either XML or JSON format to the MyInvois platform. After successful submission, the platform performs schema checks and assigns a unique ID to each e-invoice.
It’s important to understand that the exchange of e-invoices will not be handled by the MyInvois platform. Instead, suppliers will be responsible for including the validation link provided by IRBM, in the form of a QR Code, on the e-invoice and sending it to buyers. Buyers will utilise this QR Code to validate the existence and status of the e-invoice via the MyInvois platform.
The roll-out of the mandate will follow this schedule:
The annual turnover or revenue will be based on audited financial statements or tax returns from 2022. Once a taxpayer’s implementation timeline has been set using the 2022 financial statements, any subsequent changes to their annual turnover or revenue will not impact their go-live date.
With more detailed information now available about the implementation of e-invoicing in Malaysia, taxpayers must begin preparing their systems for the upcoming changes.
In Q4 2023, the IRBM is set to release a Software Development Kit including the relevant technical documentation and APIs. Furthermore, additional guidance on certain aspects of the implementation and anticipated legislative changes are expected in due course.
Looking for further information on e-invoicing in Malaysia? Contact our expert team.
The Portuguese government has been working on introducing mandatory B2G (Business-to-Government) electronic invoicing in recent years, alongside other obligations for the digitization of VAT compliance in the country.
This aligns with the European Union’s efforts towards harmonising the adoption of e-invoicing in public procurement. To achieve this goal, the EU has implemented Directive 2014/55/EU to outline the responsibilities and criteria for e-invoicing in public procurement processes. The EU requires Member States to enforce an obligation for the Public Administration to receive invoices electronically.
However, several Member States, such as Portugal, have taken a step forward by making the issuance of electronic invoices mandatory for suppliers of the Public Administration. The Portuguese mandate, known as “Electronic Invoicing to the Public Administration” (Fatura Eletrónica à Administração Pública – FEAP), was introduced to streamline invoicing processes and improve efficiency in transactions between businesses and the public sector.
In Portugal, Law Decree 111-B/2017 and subsequent amendments established the beginning of the obligation to issue, receive and process electronic invoices in public procurement. ESPAP (Entidade de Serviços Partilhados da Administração Pública) is the Portuguese entity responsible for the implementation and management of B2G e-invoicing.
This obligation is also present in the Public Contracts Code and requires suppliers of the Public Administration to issue all invoices to public sector entities in electronic format. This excluded contracts declared secret or accompanied by special security measures and contracts concluded following the simplified direct award process (contracts below EUR 5,000).
The implementation of this regime was gradual, starting with the mandatory receipt of electronic invoices by the Public Administration in April 2019. This was followed by a phased introduction of compulsory issuance of e-invoices for suppliers of the Public Administration, starting with large companies in January 2021. The implementation calendar has been postponed several times for small, medium and microenterprises. Currently, only large companies are required to issue invoices electronically.
An e-invoice, according to the EU Directive on e-invoicing in public procurement, is an invoice issued, transmitted and received in a structured electronic format.
Electronic invoicing requires data creation in a structured format and its transmission from the seller’s system to the buyer’s system in an automated manner. As a result, the invoice can be automatically imported into the public entity’s system.
As per Portuguese regulations, the e-invoicing model to be adopted is the semantic data model proposed for the Portuguese standard known as CIUS-PT. There is no obligation to send a PDF document attached to the electronic invoice. An invoice in PDF format is not considered an electronic invoice as they do not comply with European standards.
Suppliers must also archive electronic invoices and ensure they are accessible for the period required by the tax authority, which is typically 10 years.
Considering the general obligation to issue e-invoices in the B2G sector, it is possible to identify four main legal consequences for non-compliance with this legal obligation:
Currently, all public administration entities are obligated to receive e-invoices in the structured CIUS-PT format. Additionally, all large company suppliers to the public administration must issue e-invoices in the same format.
Although B2G e-invoicing became mandatory on 1 January 2023, Law Decree no. 54/2023 published in July 2023 postponed the obligation for micro, small and medium-sized enterprises once again – granting taxpayers a new deadline for compliance.
The postponement was first announced during the press conference of the Council of Ministers, without a new deadline for the entry into force of the obligation. However, with the decree’s publication, the new deadline of 31 December 2023 has been established.
Until then, micro, small and medium-sized companies can use invoicing mechanisms other than e-invoicing in the structured CIUS-PT schema when contracting with the Public Administration.
Need more information on B2G e-invoicing in Portugal? Speak with our expert team.
With the publication of Resolution 097-2023, the National Superintendency of Customs and Tax Administration of Peru (SUNAT) has established the procedure for refunding the general sales tax (IGV) to tourists.
The establishment of this facility previously required a series of reforms and adjustments to Peruvian regulations. This regulation is preceded by Supreme Decree No. 226-2020-EF which modified the regulations of the General Sales Tax and Selective Consumption Tax Law to incorporate tax refunds for tourists – defined as foreign natural persons not domiciled in the country and who remain for no more than 60 days.
At the beginning of 2023, SUNAT published Resolution 005-2023 through which the regulation of payment vouchers and the rules on electronic issuance were modified. The administration changed the rules to allow the issuance of invoices to tourists entering the country.
This invoice can be issued at authorised establishments when goods are sold. In this case, the identification data of the purchaser will not be RUC but a passport.
SUNAT published Resolution 091/2023 in April 2023 to establish rules for the Register of Authorized Establishments (REA) to regulate the registration, permanence and exclusion of taxpayers for the right to return the IGV to tourists.
On the date of their departure from Peru, tourists who have not exceeded the authorised time of stay in the country can initiate the return procedure with the collaborating entity. Tourists can use the self-management kiosk or the mobile application, which is available inside international air or sea terminals.
The VAT refund procedure for tourists is as follows:
The payment to the credit or debit card will be made within five calendar days from the request being registered, discounting the commission that the collaborating entity charges for this service.
The checkpoint has been enabled since 2 May 2023 in the pre-boarding control area on the first floor of the Jorge Chávez International Airport.
Seeking more information on this change in Peru? Contact our team of tax experts.
The Electronic Invoicing Law of the Dominican Republic was published on 17 May 2023, mandating e-invoicing throughout the territory as of 18 May 2023.
The law was published in the Official Gazette, whose purpose is to regulate the mandatory use of electronic invoicing in the Dominican Republic, including the establishment of the electronic invoicing tax system and its characteristics, optimisation results and contingencies, as well as the entry periods and tax facilities that taxpayers who take advantage of this system will be granted.
The law includes a Chapter on the Criminal and Tax infractions and penalties for non-compliance and still allows using paper invoices for certain contingencies.
The law applies to natural and legal persons, public or private. It’s also applicable to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.
All electronic invoice issuers in the country shall:
The requirement for holographic or handwritten signatures and commercial seals for electronic invoices is fulfilled by using digital signatures supported by a digital certificate.
Electronic invoices cannot be modified once signed digitally and sent to the DGII.
The electronic invoice must comply with the standard format established by the tax authority, which will be validated by computer systems. E-invoices will only be admissible when they comply with this validation.
Electronic invoices will be sent to the authority and the electronic receiver through electronic applications connected to the internet and in an XML file.
The electronic invoice will have a Printed Representation (RI) of the E-CF which will be delivered as a physical document to non-electronic receivers in exceptions. Otherwise, it will be delivered to electronic receivers when they are in contingency so that they can prove and report purchase transactions to the authority and third parties – as well as support tax credit or consumption, and keep the indicated documents as established by current legislation.
The General Directorate of Internal Taxes (DGII) will be the competent authority for validating and certifying the content and integrity of the electronic invoice.
The Electronic Invoicing Tax System is administered by the DGII and will be used to validate and accredit all electronic tax receipts resulting from electronic invoices. It will also validate legal forms or electronic tax documents that modify them and that serve as support to back up expenses and tax credits.
The DGII is also responsible for ensuring the integrity of information that is sent instantly for validation and the accreditation of electronic tax receipts (E-CF).
The three forms of Issuance of Electronic Tax Receipts (E-CF) are as follows:
The electronic tax receipts sent to the DGII will be validated online through the information system, according to the schemes published by the technical documentation and complementary standards that define their structure and behaviour.
Once they’ve been compared and validated against the criteria, the DGII will respond by delivering a response number identified as “trackID” with which the E-CF issuer can consult the document’s status.
There are 10 types of electronic tax receipts or documents as part of the law. These include:
All E-CFs must have an electronic tax receipt number (E-NCF), authorised by the DGII, which consists of an alphanumeric sequence.
The number and type of electronic tax receipt numbers will be authorised according to the economic activity registered in the National Taxpayer Registry (RNC), operational volume, and level of compliance of the taxpayer – as well as the risk profile of the taxpayer, in accordance with the parameters established by the DGII.
The duties required of electronic issues, in order, consist of:
The standard format for the structure of E-CFs is as follows:
Taxpayers must indicate data that modifies or affects electronic tax receipts of credit and debit notes.
The DGII will publish the list of taxpayers required by law to issue E-CF. With the approval of the DGII, taxpayers may agree to extend the deadline for compliance with electronic invoicing regulations.
A voluntary period is provided for all taxpayers who wish to be issuers of electronic invoices before implement the previous calendar. The DGII is providing incentives consisting of tax credits for MIPYMES and Large National Taxpayers.
Looking for further information on e-invoicing in the Dominican Republic? Contact our expert team.
VAT regulations can be complex and change often, posing significant challenges for companies operating in the distribution industry.
In this informative on-demand session, Sovos’ Senior Consulting Manager Russell Hughes and Sales Director Alexis Desjardins delve into the implications of VAT for distribution businesses, sharing valuable insights, real-life case studies and strategies to overcome these challenges.
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Don’t miss the opportunity to learn more about achieving VAT success. Watch our on-demand session on strategies for distribution today.
Implementing certified add-ons in SAP S/4HANA on-premise or a private cloud environment will allow you to expand the capabilities of your system. However, it is necessary to maintain a pristine core by strictly adhering to the most effective procedures.
This blog details the most important steps companies should take to design an add-on with a clean core.
Ensure that all umbrella modules of the add-on have been SAP certified for SAP S/4HANA compatibility. This will prove that the add-on satisfies the requirements for integration and avoid investment risk for non-certified modules that use objects forbidden by SAP.
For each major release from SAP, non-certified modules may no longer work to the expected requirement. At Sovos, we make it a point to guarantee that all of our SAP modules are certified against the latest releases. Examples of these modules include VAT Determination (Sales, Purchasing, Monitoring & Reporting, and VAT ID Validator) and continuous transaction controls (CTC) frameworks.
It is important to provide comprehensive user training on the add-on’s functionalities and document changes or upgrades made throughout the installation.
Using the appropriate software is essential for compliance and efficiency when dealing with indirect taxes. Avoid taking quick routes. Make a choice based on accurate information that helps tax procedures run smoothly.
By adhering to these standards, businesses can successfully implement certified add-ons into SAP S/4HANA while keeping the system core clean. This method, which restricts the use of customisations, prioritises the employment of standard functions and ensures an uninterrupted connection – resulting in the production of an SAP S/4HANA system that is highly effective and optimised.
Are you a SAP user that cares about tax compliance? Download our free eBook today.