Understanding European VAT Compliance

Your guide to making VAT compliance simple

Struggling to keep up with the many elements of VAT compliance? Our tax experts continually review regulations, compliance rules and tax authority updates to understand VAT requirements across Europe and beyond. This e-book is the result of their research and is ready for you to download. It’s ideal for anyone involved in VAT compliance who is keen to learn more.

  • Helps you to understand VAT
  • Covers over 40 jurisdictions within and outside the EU
  • Download for free

Navigating cross-border VAT compliance across Europe can be complicated. With requirements varying from country to country it’s important to be prepared for any upcoming changes to ensure continued compliance. The digitization of VAT continues, and our guide will help you understand and be ready for changes including SAF-T, e-invoicing and continuous transaction controls (CTCs).

Quick Links

  1. What this Guide to European VAT Compliance covers
  2. What is VAT compliance?
  3. What is a VAT number in Europe?
  4. Need help with VAT compliance now? Get in touch
  5. More VAT compliance resources

Minimise compliance risks

Essential VAT Guide

Including latest VAT trends

What this guide to European VAT compliance covers

The guide provides information on the many elements of European VAT compliance including some of the biggest trends in VAT – CTCs and e-invoicing. We also look at some of the more complex VAT requirements including Intrastat, supply chain management, the EU e-commerce VAT package and VAT for events – all in one easy to understand e-book:

  • What is VAT?
  • The global tax landscape
  • VAT reporting
  • What is SAF-T?
  • What are CTCs?
  • Optimising supply chain management
  • The EU E-Commerce VAT Package
  • What is Intrastat?
  • VAT for events
  • Global and Europe VAT reporting requirements
  • How Sovos can help

What is VAT compliance?

VAT compliance means ensuring that VAT is applied and submitted in the correct format and by the relevant deadline to the relevant tax authority.

Each Member State has its own VAT invoicing and reporting requirements. Member States have been introducing e-invoicing, continuous transaction controls and SAF-T, all requiring specific data and formats to submit to the tax authority.

VAT requirements continue to change so it’s important to be aware of upcoming regulations and prepare in advance to remain compliant with the latest requirements.

VAT is a tax on final consumption, therefore it should not represent a cost to most businesses. VAT is more efficient and less detrimental to economic growth and competitiveness than other taxes

What is a VAT number in Europe?

To obtain a VAT number a company must register for VAT in the EU. Registering for VAT in the EU remains a complicated task, with each Member State having bespoke processes and procedures to obtain a VAT number. VAT reporting includes many elements, from registration to fiscal representation and filing returns. This guide explains the VAT reporting process, as well as upcoming changes that organisations should be aware of to remain VAT compliant.

Need help with VAT compliance now? Get in touch

End-to-end, technology-enabled VAT Managed Services ease your compliance workload and mitigate risk wherever you operate today while ensuring you’re ready to handle the VAT requirements in the markets you intend to dominate tomorrow.

Sovos Managed Services can help with a range of VAT compliance requirements, including:
  • Registration – guidance on country-specific registration requirements to avoid delays
  • Audits – minimise management time, fees and exposure to penalties or interest
  • Filing VAT returns – ensure VAT returns are in the correct format and include information required by tax authorities
  • Managing VAT changes – navigate changes to minimise risk and ensure continued compliance with the latest regulations and updates
  • Consultancy services – always on-hand to advise and help with queries of any complexity

Give yourself VAT compliance peace of mind.

Ease your VAT compliance workload and mitigate risk wherever you trade with Sovos’ complete end-to-end offering, enabled by our comprehensive software, helping you stay up to date and reducing the burden on your team.

The Philippines continuous transaction controls (CTC) Electronic Invoicing/Receipting System (EIS) has been officially kicked off for the 100 large taxpayers selected by the government to inaugurate the mandate. Although taxpayers were still struggling to meet the new e-invoicing system’s technical requirements just before the go-live date, the Philippines upheld its planned deadline and went live with this pilot on 1 July 2022.

The Philippines roll-out has once again highlighted the challenges of complying with new mandates and shown that readiness is vital.

Together with one of the six initial pilot companies, which started testing early this year, Sovos has developed the first software solution to obtain approval by the EIS to operate e-invoice transmission through the government’s transmission platform. Sovos’ solution is up and running in the Philippines.

Release of new regulations

One day before the EIS go-live, the Philippines tax authority, BIR (Bureau of Internal Revenue), published Revenue Regulations n. 6-20228-2022, and 9-2022, containing the new system’s policies and guidelines and documenting the rules and procedures adopted by the EIS.

While the regulations do not represent news for pilot taxpayers who have successfully implemented their CTC e-invoice reporting systems, the same might not be accurate for those preparing to comply with the new mandate. The legislation officially establishes the country’s e-invoice/receipt issuance and reporting initiative, first introduced in 2018 by the Tax Reform for Acceleration and Inclusion Act (TRAIN), and documents relevant information.

Who needs to comply?

As of 1 July 2022, 100 selected pilot taxpayers have been obliged to issue and transmit e-invoices and e-receipts through the EIS. The BIR is planning a phased roll-out for other taxpayers within the scope of the mandate, starting in 2023, but no official calendar has been announced yet.

Taxpayers covered by the mandate are:

The mandate requires electronic issuance of invoices (B2B), receipts (B2C), debit and credit notes and transmission through the EIS platform in near real-time, that is, in up to three (3) calendar days counted from issuance date. Documents must be transmitted using the JSON (JavaScript Object Notation) file format.

Issuing and transmitting

Issuance and transmission can be done through the EIS taxpayer portal or using API (Application Programming Interface), in which taxpayers must develop a Sales Data Transmission System and secure certification before operating through the EIS. This entails the application for the EIS Certification and a Permit to Transmit (PTT) by submitting documentation with detailed information about the taxpayer’s system.

Although the regulations state that the submission of printed invoices and receipts is no longer required for taxpayers operating under the EIS, archiving requirements have not been modified. This means that during the 10-year archiving period, taxpayers must retain hard copies of transmitted documents for the first five (5) years, after which exclusive electronic storage is allowed for the remaining time.

Additionally, the legislation states that only the invoices successfully transmitted through the EIS will be accepted for VAT deduction purposes.

Taxpayers were not ready to comply

Many of the 100 pilot taxpayers struggled to comply with the country’s deadline. For this reason, the EIS has allowed alternations to the deadline for certain taxpayers, provided they submit a Sworn Statement detailing the reasons why they are not able to meet the requirement on time and a schedule with the date they intend to comply by, which are subject to the EIS’ approval.

Regarding non-compliance, the regulations state that the tax authority shall impose a penalty for delayed or non-transmission of e-invoices/receipts to the EIS and that unreported sales will be subject to further investigation.

What’s next?

After the pilot program kick-off and legally establishing the CTC framework, the government plans to gradually roll out the mandate to all taxpayers included in the scope in 2023. However, taxpayers who are not in the mandatory scope of the EIS may already opt to enrol in the system and be ready to comply beforehand.

Sovos was the first software provider to become certified, in conjunction with one of the pilot taxpayers, to transmit through the EIS, and is ready to comply with the Philippines CTC e-invoice reporting. Our powerful software combined with our extensive knowledge of the Philippines tax landscape helps companies solve tax for good.

Take Action

Need to ensure compliance with the latest e-invoicing requirements in the Philippines? Speak with a member of Sovos’ team of tax experts

As of 1 July 2022, Hungary introduced an Extra Profit Tax scheme, which levies supplemental Insurance Premium Tax (IPT) on insurance premiums. The introduction of the Extra Profit Tax scheme is a temporary measure and aims to cover the increased governmental costs caused by the conflict in Ukraine. The Extra Profit Tax scheme is applicable not only for the insurance sector but also for other sectors, including airlines, medical, energy, telecommunications and banking.

The following blog gives an overview of this tax, highlighting some interesting features and anomalies around this tax.

What is Hungary’s Supplemental IPT?

On 4 June 2022, a Government Decree was published in the Hungarian Official Gazette, numbered 197/2022, with the title “About Extra Profit Taxes”. One may wonder why a government decree regulates a new tax method. To answer this question, we need to research and read the Hungarian Constitution and another law about special measurements in case of catastrophes. Adding two new sections to the mentioned law on 25 May 2022 made it possible for the government to introduce the Extra Profit Taxes in a government decree instead of adjusting the relevant laws. The Extra Profit Tax scheme includes the Supplemental IPT. Although the Government Decree refers to particular tax laws, such as the 102/2012 IPT Law, the Extra Profit Tax regulations are not and will not be built into these tax laws.

Overview of the Supplemental IPT

Supplemental IPT is a temporary tax effective as of 1 July 2022 for 18 months and will end on 31 December 2023. This tax is due on non-life and life insurance policies written by both Freedom of Establishment and Freedom of Services insurers. A similar sliding scale system on the income collected is applicable for this new supplemental IPT as it is for the existing IPT. The scales for 2022 are as follows:

  1. Under 1 billion Hungarian Forint (HUF)
  2. Over 1 billion and below 18 billion HUF
  3. Over 18 billion HUF

While for 2023, the scales are the following:

  1. Under 2 billion HUF
  2. Over 2 billion and below 36 billion HUF
  3. Over 36 billion HUF

The rates vary depending on when the taxpayer collected the premium and the type of insurance policies. In 2022 the rates are higher for non-life and life insurance policies than in 2023, also noting that the life rates are half of those applied to non-life policies. For further details about the rates, please read our tax alert, Hungary: Supplemental IPT Introduced Due to Ukraine Conflict.

The declaration and the payment are due by 31 January 2023 and 31 January 2024, respectively. There is also a prepayment obligation for both years with due dates of 30 November 2022 and 31 May 2023. For further details about the prepayment, please also refer to the abovementioned tax alert.

Interesting features about the Supplemental IPT

The introduction of this tax is one of the features which is unique in taxation. In Hungary, in normal circumstances, taxes are introduced, or the existing taxes are modified via laws. Generally, tax laws should be published at least 30 days before they come into effect. In the case of the Extra Profit Tax scheme, the legislative body fulfilled none of the above.

Another interesting feature to mention is that although it is called supplemental insurance premium tax, it is also due on life insurance policies. In Hungary, there is no existing insurance premium tax on life policies as these policies are exempt.

No prepayment is due for the existing IPT, but prepayment is due to be paid for the supplemental IPT.

Supplemental IPT is a type of Extra Profit Tax, but it seems that there is no separate tax code given to it. The Supplemental IPT should be declared on the IPT declaration form and paid to the same Hungarian Tax Office account as the existing IPT.

Anomalies and open questions around Supplemental IPT

The base period to calculate 2022 prepayment is one year, although the supplemental tax is due only for the second half of 2022. On the other hand, the prepayment for the whole 2023 year is equal to the amount of the half-yearly 2022 supplemental tax. As such, insurance companies will likely overpay the tax with the 2022 prepayment. This overpaid tax will then need to be reclaimed or can be offset against the existing IPT or used for the 2023 prepayment or 2023 supplemental IPT. Is it for purpose or just a mistake and it will be amended?

In the guidance issued by the Hungarian Tax Office on 1 July 2022 on supplemental insurance tax rules for 2022, the tax authority mentioned that taxpayers should declare the supplemental tax on the standard IPT tax declaration form, 2220. However, the tax authority did not update the form by 1 July 2022. As the due date of the prepayment and the supplemental tax differ from that of the existing IPT, there is still an open question of how the form will look to make the distinction between the existing IPT, the prepayment and the supplemental tax. Hopefully, a new return template will be published soon to answer these questions.

As explained above, there is still ambiguity and questions around this new tax. Sovos is dedicated to keeping our clients up to date and informing you as soon as the clarified information is available. Please contact our dedicated IPT compliance team if you have any questions.

Take Action

Still have questions about Insurance Premium Tax? Download our IPT Guide, written by our team of IPT experts.

The EU and the UK use the Economic Operators Registration and Identification System (EORI) to identify traders.

What is an EORI number?

Businesses and people wishing to trade in the EU and the UK must use the EORI number as an identification number in all customs procedures when exchanging information with customs administrations. The EU has one standard identification number across the EU, while the UK requires a separate GB EORI number for trade in the UK post-Brexit.

The purpose of having one standard ID in the EU is that it creates efficiency for both traders and the customs authorities. However, it’s vital to ensure all aspects of the system are considered.

Who needs an EORI number?

The primary need for an EORI number is to be able to lodge a customs declaration for both imports and exports. Guidance is that a trader should obtain an EORI number in the first country of import or export. Carriers will also require an EORI number.

EORI number format

The EORI number exists in two parts:

The UK has also adopted this format, with both GB EORI numbers for trade into Great Britain (GB) and an XI EORI number for trade via the Northern Ireland protocol. The UK and EU have online databases where it is possible to check the status of an EORI number.

GB and XI EORI numbers

Since the UK left the EU, it is now required to have a separate GB EORI number to import and export from GB. This number will not be valid in the EU. However, should businesses be trading from Northern Ireland, then due to the Northern Ireland protocol, it is possible to apply for an XI EORI number to import into the EU.

Initially, after the introduction of the XI prefix, there were several reported issues. They included tax authorities being unable to recognise XI EORI numbers or link them to existing EU VAT numbers. Often it is the case that businesses have found it simpler to cancel an XI EORI number and apply for an EU EORI number in a Member State, particularly if that Member State is the main point of entry for imports into the EU.

Practical issues around EORIs

Some of the most common issues we see at Sovos include:

How Sovos can help

Sovos provides an EORI registration service for traders who must apply for an EORI number. We can also link any existing EU VAT numbers to the EORI to ensure that customs declarations can be logged correctly, ensuring a smooth process and avoiding delays.

Take Action

Contact us if you need help with VAT compliance.

The complexities of Spain’s insurance premium tax regulations can be daunting for anyone responsible for IPT reporting and compliance for this country.

Apart from the different tax authorities involved with Spanish IPT reporting and various submission processes, there are also many different declarations that tax compliance teams must be aware of.

Here we’ll look at some of the more challenging aspects of IPT reporting.

What is a Modelo 480 form?

Although the Spanish tax authorities receive declarations monthly for insurance premium tax they also require an annual declaration. The annual declaration form is referred to as a Modelo 480. This form contains a monthly summary of information by class of business and a section to provide exempt premiums. Modelo 480 is also due to the four tax authorities for the Basque region provinces, which are different formats but contain the same information. The deadline remains in January alongside the December declarations.

What is the Modelo 50?

Most of the insurance classes include a charge for the Fund for Winding up of Insurers (or the Modelo 50) even if the policy is exempt from IPT. The Modelo 480 acts as another form of review by the Spanish authorities to ensure they receive the correct amount of tax. They can cross reference the premium amount declared for the Fund for Winding up of Insurers against the premium reported on Modelo 480.

Spain’s Fire Bridge Charge

Another of the more notorious annual reports is the Fire Brigade Charge. The Fire Brigade Charge report can take around four years to complete one tax period. With prepayments and adjustments, incorrect submissions can take equally as long to fix. Reports require careful attention to detail as taxpayers cannot make corrections after submission.

Historically, an insurer could apply either a 2.5% for a multi-risk policy or a 5% rate for pure fire and be confident that the total requested by the tax authority would be around that number. More recently, this is no longer the case with the change in economic climates and more instances where the claims are higher.

How to comply with Spain’s Fire Brigade Charge reporting

The process begins with a report concerning Property and Fire policies written in the previous year. At the beginning of the following year, the taxpayer makes a prepayment based on that report. The year after, the taxpayer submits a report with the actual premiums written during the previous year. Finally, in the fourth year, the difference between the prepayment and actual premiums written is confirmed and adjusted should there be any discrepancies. Simply put, the 2022 Fire Brigade tax period will be closed in 2026!

Modelo 0-6 becomes obsolete

Another of the more complicated annual reports was the Modelo 0-6, which became obsolete with the introduction of the new reporting system. This report focused on the Extraordinary Risk taxes due on Property Damage, Fire, Business Interruption and Accident. The new system allows real-time information to be accessed should a claim against a policy be made.

Take Action

Still have questions about IPT in Spain? Get in touch with Sovos’ team of IPT experts or watch our webinar on The Complexity of Insurance Premium Tax in Spain.

On 1 January every year, taxpayers operating in Peru must assess their monthly income over a certain period determined by law to verify if they fall under the obligation to keep electronic ledgers. Taxpayers above the established threshold or who wish to voluntarily keep their ledgers electronically may do so by using the Electronic Ledgers Program (Programa de Libros Electrónicos – PLE), which covers all electronic books, or through the System of Electronic Ledgers (Sistema de Libros Electrónicos Portal – SLE), exclusively for the records of sales and purchases.

Earlier this year, however, the Peruvian tax authority (SUNAT) approved a new system specifically for the records of sales and purchases, the Integrated System of Electronic Records (Sistema Integrado de Registros Electrónicos – SIRE). Through the new Resolution 40-2022/SUNAT, the Electronic Record of Purchases (Registro de Compras Electrónico – RCE) was introduced, a module similar to the Electronic Record of Sales and Earnings (Registro de Ventas e Ingresos Eletrónicos – RVIE) created in 2021 and already in use by taxpayers.

The two modules, RVIE and RCE, compose the SIRE. This new system will be rolled out gradually, starting in October 2022, obliging taxpayers to migrate from the PLE and SLE to generate their records of sales and purchases exclusively through SIRE while maintaining the PLE for other ledgers.

How the SIRE works

The primary purpose of the SIRE is to simplify the generation of records of sales and purchases for taxpayers. Through the SIRE, a proposal for the RVIE and the RCE is automatically generated. It is available from the 2nd calendar day of every month. The taxpayer may accept, modify or replace it with the information they wish to present to SUNAT. If there are no transactions during the monthly period, the taxpayer must still submit a blank file to SUNAT.

Under the current systems (PLE and SLE), SUNAT doesn’t generate a proposal; the taxpayer enters all sales and purchases information and generates the records. With the SIRE, however, SUNAT uses information from its Electronic Invoice System (Sistema de Emisión Eletrónica – SEE) to create a proposal of the RVIE and RCE, which the taxpayer submits in each declaration period. The record is updated daily with the information received on the previous day.

The RCE has certain peculiarities compared with the RVIE, already in use. The RCE requires the generation of two separate files, the records of domestic and cross-border purchases. Even if no cross-border transactions are carried out, a blank RCE must still be submitted to SUNAT. Additionally, taxpayers may exclude specific purchase invoices and include them in the RCE at any time for 12 months from the invoice issuance date.

After the taxpayer’s revision, the RVIE and RCE are filed in conjunction, and a receipt status message (Constancia de Recepcion), containing relevant information, is delivered to the taxpayer’s electronic mailbox.

The SIRE can be accessed through the SUNAT portal, using the SIRE application installed on the taxpayer’s computer or through SUNAT’s API web service.

What changes for taxpayers?

Once taxpayers become obliged to the exclusive maintenance of sales and purchase records through the SIRE, they must discontinue keeping such records in the PLE, SLE or paper ledgers. However, because the SIRE covers the RVIE and RCE exclusively, taxpayers will still need to maintain the PLE, which contains all other ledgers.

This means taxpayers must be aware of the distinct set of rules applied to the PLE and the SIRE. An example is that the SIRE allows modification of an already “closed” record from a previous period without waiting until the next period, as with the PLE and SLE. In the SIRE, adjustments can be made at any time using the different annexes provided by SUNAT, with no limitations on the year the record was generated.

Another significant change is that taxpayers will no longer have to store, file and preserve electronic records since SUNAT will do this for them.

Gradual roll-out of the SIRE

Implementation of the SIRE will happen gradually, according to the following schedule:

Taxpayers may also start using the SIRE voluntarily if they are obliged to keep the Records of Sales and Purchases and are enrolled in the SUNAT operations portal (clave SOL), according to the following calendar:

What’s next for the SIRE?

Resolution 40-2022/SUNAT becomes effective on 1 October 2022. However, because most companies in Peru are already obliged to keep Records of Sales and Purchases, the largest groups of taxpayers must be ready to comply with the new mandate starting 1 January 2023.

Take Action

Speak to our team if you have any questions about the latest tax requirements in Peru. Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world.

According to European Customs Law, non-EU established businesses must appoint a representative for customs purposes when importing goods into the EU. In particular, the Union Customs Code establishes that non-EU resident businesses must appoint an indirect representative.

At the end of the Brexit transitionary period, many UK businesses suddenly needed to appoint an indirect representative to clear goods into the EU. In this article, we will look in further detail at this requirement’s challenges.

Who can act as an indirect representative?

Indirect representation implies that agents are jointly and severally liable for any customs debt (import or export duties), which is why it’s harder for businesses to find freight companies and customs brokers willing to act on their behalf than for direct representation imports.

The conditions to be an indirect representative are that the customs agent must have a registered office or permanent establishment in the EU. An agent would require a Power of Attorney that enables them to act for the company. The main characteristic of indirect representation is that the agent will act in their own name but on behalf of the company that appointed them, essentially transferring the rights and obligations of customs procedures to the representative.

On the other hand, agents act in the name and on behalf of the company in direct representation.

Joint responsibility of the indirect representative

In addition to the customs implications, agents acting as the importer of record or declarant may also be considered liable for complying with regulatory requirements. For example, any error in the declarations (ex. Article 77 paragraph 3 Union Customs Code (UCC), if the agent was aware of incorrect information or if they “should have known better”).

The European Court of Justice recently expressed its opinion on this matter with the ruling on the case C-714/20, UI Srl. This ruling determined that the indirect representative is jointly and severally liable from a customs law perspective, but not for VAT (contrary to a previous interpretation of Article 77 (3) UCC). The court specified that it’s up to the Member States to expressly determine if other persons, such as indirect representatives, may be considered jointly and severally liable for VAT of their importer clients. However, according to the principle of legal certainty, this should be clearly expressed in the local legislation before courts can enforce said responsibility.

What are the options for UK businesses?

For these options, each alternative solution will have economic and administrative implications to be considered. It is recommended that businesses carefully review their overall strategy before deciding what can be adjusted to comply with customs formalities.

Take Action

Contact Sovos’ team of  VAT experts for help with meeting VAT compliance obligations.

Romania has been taking steps toward introducing a continuous transaction controls (CTC) mandate since 2021. Although the Romanian tax authority only established the legal framework for implementing the e-invoicing system less than a year ago, it is set to go live soon. At the same time, the e-transport system, introduced even later, will also be rolled-out. Both systems will become mandatory as of 1 July; however, there are still open questions that taxpayers hope will be addressed by the Romanian authorities. By international comparison, taxpayers in Romania have a relatively short time window to comply with the new obligations.

RO E-Factura system

Suppliers of high-fiscal risk goods are obliged to use the RO E-Factura system as of 1 July 2022. Suppliers must transmit structured invoices issued in XML format to the system. The Ministry of Finance will apply its electronic seal as proof of clearance. This XML with the Ministry of Finance’s seal is considered the legal invoice according to Romanian regulation.

Romania requested a derogation from EU VAT Directive 2006/112/EC to introduce mandatory e-invoicing. ANAF (The National Agency for Fiscal Administration) is authorised with Law no. 139 to issue an order in 30 days following the expected derogation decision from the EU VAT Directive to establish the scope and the timeline of the B2B e-invoicing mandate according to Law No. 139. However, the Romanian authorities are silent on whether the 1 July mandate to use the e-Factura system for high fiscal risk B2B supplies also requires a derogation decision from EU VAT Directive.

Regarding the technical documentation, ANAF recently published the OAUTH (Open Authorization) 2.0 procedure within SPV (Virtual Private Space), allowing taxpayers to produce an authentication token and pass it to third-party applications, which will enable third-party applications to authenticate towards the SPV. However, even if the complications with the authentication process seem resolved after the recent documentation, the May date of these documents’ publication raised questions on whether the Romanian authorities gave reasonable time to businesses to comply by 1 July.

RO e-transport

The RO E-transport system is another Romanian digitalization project. It requires taxpayers to use an IT system and issue an e-transport document before transporting of certain goods begins. Just like e-invoicing, taxpayers are required to issue an XML file and send it to the tax authority through SPV.

The requirement to issue e-transport documents concerns categories of high fiscal risk products; as mentioned above, this also comes into force on 1 July 2022. While the mandatory go-live date for the e-transport system is imminent, the legislative process has not been completed by ANAF yet. In addition, the technical documentation, including the APIs, schema, and validation rules, was completed only two weeks ago.

What’s Next?

The emergency ordinances that introduced the obligation of e-invoicing and e-transport system for high fiscal risk products as of 1 July have not yet been approved by law.

However, as both systems are currently due to become mandatory on 1 July 2022, businesses have been preparing to comply with the requirements while trying to deal with many uncertainties.

We’ll see in the coming days how Romanian authorities will manage the implementation of both systems, either by keeping the 1 July deadline or by postponing the mandates until further clarification and guidance on open questions are provided.

Take Action

Need to ensure compliance with the latest regulations in Romania?  Get in touch with our tax experts. Follow us on  LinkedIn  and  Twitter  to keep up-to-date with regulatory news and updates.

Serbia E-invoicing

Serbia is in the process of introducing mandatory e-invoicing for all taxpayers

Over the coming years, Serbia is set to gradually make e‑invoicing mandatory for all taxpayers.

The Law on Electronic Invoicing that came into force in May 2021, introduces the clearance e-invoicing system and presents the centralised continuous transaction controls (CTCs) platform called SEF (Sistem E‑Faktura) for sending, receiving, capturing, processing and storing structured electronic invoices. Additionally, there is a system to help taxpayers with the processing and storage of invoices called the Sistem za Upravljanje Fakturama (SUF).

The new legislation aims to replace paper invoices with electronic invoices and outlines the requirements for the issuance of e-invoices in B2B and B2G transactions.

Have questions? Get in touch with a Sovos Serbia VAT expert.

Reforms

Under the new e-invoicing framework, e-invoices must be sent and received in accordance with Serbian e‑invoicing standards (custom application of the standard EN 16931-1). All e‑invoices are to be submitted via a centralised platform to the recipient who must accept or reject the invoice.

For B2C transactions specifically, on 1 January 2022 Serbia implemented a security-based approach to ensure the registration of B2C transactions. This approach ensures the Electronic Fiscal Device hardware used by the taxpayer submits data to the tax authority in real‑time.

Quick facts

  • Serbian e-invoices must be issued in an XML format and comply with UBL 2.1 Standard
  • Invoices must be sent and received to EN 16931‑1 standard
  • Taxpayers must register first via the eID.gov.rs portal to start using the SEF platform
  • The Ministry of Finance needs to give consent to the service provider, who needs to be registered in Serbia
  • B2C transactions requiring the Electronic Fiscal Device must be certified and consists of:
    • POS application (certification is mandatory)
    • Fiscal receipt processor
    • Security element
    • The integrity and authenticity of electronic invoices is ensured by issuing electronic invoices through SEF

Mandate rollout dates

May 2021: Law on Electronic Invoicing entered into force

1 May 2022: All suppliers in the public sector must send invoices electronically and the Serbian government must be able to receive and store them. (G2G/B2G)​

1 July 2022: Serbian public entities are obliged to send e‑invoices to companies, who must be able to receive and process them. (G2B)​

1 January 2023: E‑invoicing will be extended to the entire B2B sector. (B2B)​

How can Sovos help?

Need help to ensure your business stays compliant with the emerging mandatory e‑invoicing for all taxpayers in Serbia?

Our experts continually monitor, interpret and codify legal changes into our software, reducing the compliance burden on your tax and IT teams.

Learn how Sovos’ solution to address the changing VAT compliance requirements in Serbia can help companies stay compliant.

In 2020, the Zakat, Tax and Customs Authority (ZATCA) in Saudi Arabia announced the introduction of an e-invoicing mandate consisting of two phases. The first phase of Saudi e-invoicing requires all resident taxable persons in the Kingdom to generate and store invoices electronically and has been enforced since 4 December 2021. The second phase, which ZATCA will roll out as of 1 January 2023, brings additional requirements and will not be mandatory for all taxpayers to begin with. However, the ZATCA plans to gradually roll out and require all resident taxpayers to comply with phase-2 e-invoicing requirements.

Who should comply with phase 2 of Saudi e-invoicing?

The ZATCA is set to roll out phase 2 in stages, starting with a smaller taxpayer group. Just a few days ago, on 24 June 2022, the first group of taxpayers who must comply with e-invoicing rules beginning on 1 January 2023 was published. According to the ZATCA announcement, taxpayers whose annual revenue exceeds 3 billion riyals (approximately 800 million USD) for the 2021 period are in scope.

So far, only the first group threshold has been revealed. The ZATCA will announce other taxpayer groups and new deadlines later. The ZATCA will notify each taxpayer group at least six months in advance.

How to comply with phase 2 of Saudi e-invoicing?

In phase 2, taxpayers must generate all e-invoices and electronic notes (credit and debit notes) in XML format (UBL 2.0). There are unique invoice content requirements. All e-invoices and e-notes must include:

However, the e-invoicing requirements concerning tax invoices (B2B) and simplified invoices (B2C) are different, and as a result, different APIs have been made available for different types of invoices.

Tax invoices will be subject to a Continuous Transaction Controls (CTC) regime. More specifically, the system can be categorised as clearance e-invoicing. After generating the XML invoice, including all necessary content, the invoice will be transmitted to the tax authority portal (the ZATCA platform) for clearance through the clearance API. The ZATCA platform will apply ZATCA’s seal as proof of clearance, after which the invoice will gain legal validity. The signed XML will be returned to the supplier, allowing the supplier to choose whether to send the signed XML invoice or a human-readable version, including the XML (PDF A-3 with embedded XML). The human-readable version must be PDF A-3 (with embedded XML) format.

Simplified invoices will be subject to a CTC reporting regime. After generating the XML invoice, including all necessary content, the invoice will be signed using the cryptographic stamp of the supplier. Afterwards the seller will present a paper copy of the invoice to the buyer. Within 24 hours, the taxpayer must report the signed XML to the ZATCA platform through the reporting API

Taxpayers must store e-invoices in electronic form. There are specific requirements concerning the storage, including, for example, mandatory local storage as a main rule and storage abroad only being permitted under certain conditions. E-invoicing solutions must further allow taxpayers to download e-invoices for offline storage.

Take Action

Need to ensure compliance with the latest VAT and e-invoicing requirements in Saudi Arabia? Get in touch with Sovos’ team of tax experts.

Identifying the location of risk for Insurance Premium Tax (IPT) purposes is the first step to ensuring IPT compliance in a given territory. This area perhaps isn’t as straightforward as it first seems for marine insurance.

As with the location of risk rules for all classes of insurance in Europe, the starting point for marine insurance is the Solvency II Directive (2009/138/EC), in particular Article 13(13). Article 13(13)(b) refers to ‘vehicles of any type’, which is generally understood to include not just motor vehicles but also ships, yachts and aircraft within its scope. Based on this, the location of risk for marine insurance is identified by the ‘Member State of registration’. As this phrase is not defined in the Directive, there has been some confusion about what ‘registration’ refers to in this context. This is illustrated nicely by a case heard in the European Court of Justice (ECJ) in April last year.

North of England P&I Association v German Federal Central Tax Office (C-786/19)

This case involved insurance contracts with companies established in Germany and entered into the register of companies held by the District Court in Hamburg. The owners entered the vessels into the shipping register maintained by the same court in Germany. The case arose because the vessels were temporarily authorised to fly the national flags of Malta and Liberia. The German tax authority argued that German IPT was due on these contracts because the vessels remained on the German shipping register throughout the flagging out period.

In contrast, the insurer contested that the risk location should be determined by the Member State that certified that the ship is fit for use and whose flag the ship flies. Malta treats marine insurance as exempt from its Stamp Duty regime, so if the insurer was successful with its argument, then no taxes on its insurance premiums would be due in the European Union.

The ECJ held that the location of risk was in Germany despite the temporary flagging out of the vessels. This decision was because the vessels remained on the Hamburg District Court’s register, which had the primary function of proving ownership. As the owner has the primary interest in insuring the vessel to protect their financial interest in it, the register evidencing ownership was key.

What next for the marine insurance location of risk rules?

It is worth highlighting that it is unclear how much weight should be placed on this case. This is for a couple of reasons. Firstly, the Ordinance for the implementation of the relevant German legislation refers specifically to ‘shipping registers kept by the local courts’ as being determinative, which differs from the position of other territories. Additionally, a significant issue not addressed by the case is what happens when a Member State doesn’t have a shipping register.

We at Sovos haven’t seen a major shift in the approach taken by insurers since the judgment, meaning in many instances that the ship’s flag is continuing to be seen as pertinent by the market. It will be interesting how the ECJ deals with similar future cases.

We’re happy to help any insurers writing business in Europe that have questions about the location of risk rules, whether concerning marine insurance or any other insurance to ensure taxes are correctly declared.

Take Action

Contact Sovos’ team of experts for help complying with marine location of risk rules or download our Location of Risk Rules for IPT eBook for more information.

Meet the Expert is our series of blogs where we share more about the team behind our innovative software and managed services.As a global organisation with indirect tax experts across all regions, our dedicated team are often the first to know about regulatory changes and developments in global tax regimes, to support you in your tax compliance.

We spoke with Manisha Patel, senior compliance services representative – Insurance Premium Tax (IPT), about their role, how they support Sovos clients and their top compliance tips for captives.

Can you tell me about your role and what it involves?

I’m a senior compliance services representative – IPT at Sovos. I joined the company over five years ago.

My role at Sovos is multi-faceted. My primary responsibility is to oversee IPT compliance for an extensive portfolio of clients, specifically within the captives practice.

I help ensure that all clients’ tax requirements are met, including checking and signing off tax returns and ensuring that correct payments are made to relevant tax authorities within specified statutory deadlines. Additionally, I help advise clients on more complex or urgent queries that have been escalated within the team.

What is a P&I Club?

A P&I Club is a non-profit cooperative association of marine insurance providers that provides P&I insurance to all its member companies. A P&I Club covers a broad range of liabilities, including loss of life, personal injury, cargo loss or damage, pollution via hazardous substances, wreck removal, collision and property damage.

These clubs offer ship owners the highest limits and broadest ranges of coverage. Through their participation in a P&I Club, the member clubs share claims above an individual’s retention via a pooling structure. Pooling together allows members to provide the insurance

cover needed by ship owners and their ships to trade while meeting compulsory insurance and financial security requirements.

What are your tips for captives to ensure IPT compliance?

Increasing numbers of global tax authorities are switching to digital submissions and, in some cases, require more detailed information to complete these submissions.

My tip for captives would be to invest time learning about these ever-changing requirements for your relevant territories and organise yourself in a way that you can easily and readily have the information you need to hand. This will reduce your business’s risk of errors and non-compliance when settling IPT.

What are the most common ways Sovos helps captives?

Sovos’ Captives Team caters to the specific needs of captive insurers. Our team can review any program a client may have before the program’s renewal, where we can assist with premium tax calculations, validate applicable country tax rates and prepare payment summaries. Due to limited in-house expertise, we recognise that sometimes additional guidance is needed.

Our IPT Managed Services Team offers a vast amount of knowledge, providing the expertise to our Captive clients through webinars, tax alerts and newsletters to boost their confidence with tax filing and reporting. Additionally, our Consultancy Team can assist with any further queries.

Take Action

Have questions about IPT compliance? Speak to our experts or download our e-book, Indirect Tax Rules for Insurance Across the World.

Due to the economic crisis and the necessity of the government to take measures aimed at economic growth and efficient tax collection, on 29 November 2021, the Organic Law for Economic Development and Fiscal Sustainability after the COVID-19 Pandemic was published in Ecuador’s Official Gazette. According to this law, taxpayers obliged to issue invoices must be incorporated into the electronic invoicing system within one year from the publication.

To comply with such measure, on 27 May 2022, the Internal Revenue Service (SRI) published Resolution NAC-DGERCGC22-00000024. It establishes the obligation to issue e-invoices to taxpayers who are required to issue invoices, and the obligation for these taxpayers, qualified as agents of withholding, to issue the Simplified Transactional Annex (ATS) version of withholding documents. These taxpayers will have to adopt the e-invoicing scheme.

New taxpayers in scope for the e-invoicing mandate

1. Income Tax taxpayers who are obliged to invoice but not obliged to issue invoices, sales receipts, withholding and complementary documents in the electronic modality must adopt the e-invoicing scheme into their activity until 29 November 2022, at the latest.

2. Natural persons and companies that are not considered taxpayers of the Income Tax and are obliged to invoice – but not obliged to issue invoices, withholding and complementary documents in the electronic modality – must adopt the e-invoicing scheme into their activity until 29 November 2022, at the latest.

3. Taxpayers required to issue invoices, withholding and complementary documents under the electronic modality, according to numerals 1. and 2. who are qualified as withholding agents by the SRI, must implement the ATS version of withholding documents, following the technical documentation made available by the SRI, until 29 November 2022.

For purposes of the application of this resolution, the subjects obliged to invoice are all taxpayers registered in the Single Taxpayer Registry (RUC) and who must issue and deliver invoices, withholding and complementary documents according to current tax regulations.

Persons with an annual gross turnover below USD 20,000 are not in the scope of this resolution. These taxpayers are known in Ecuador as Popular Businesses (Negocios Populares).

Other measures adopted in the new resolution

• As of 30 November 2022, only taxpayers responsible for issuing bills of sale (notas de venta) may request authorisations, modifications or renewals for the issuance of receipts through registering machines.

• As of 30 November 2022, taxpayers required to issue invoices, retention and complementary documents in the electronic modality may request authorisations for pre-printed documents only after they have obtained the authorisation to issue electronic documents in the production environment of the e-invoicing system.

New limit for pre-printed document issuance

The resolution introduces a limit for invoices or receipts issued under the pre-printed modality, which may not exceed 1% of the total receipts issued in the previous fiscal year.

Pre-printed documents should only be issued in exceptional cases of contingency when, due to force majeure or fortuitous event, taxpayers authorised to issue documents under the electronic modality cannot generate them electronically.

Free tool maintenance will be optional for SRI

According to this resolution, the SRI may keep a free tool available for taxpayers to generate electronic documents without prejudice to taxpayers using their computer systems. There was a significant change compared with the previous resolution, which established that the SRI will “maintain” this free tool, indicating that the maintenance of said tool is now optional for the SRI.

What’s next?

According to the original plan of implementation, the SRI had plans to gradually expand the e-invoice mandate for all taxpayers in the country, with more taxpayers scheduled to start issuing e-invoices from 2023 and 2024. However, with this resolution, the schedule of mandatory e-invoicing implementation has been modified. All these taxpayers must start adopting the e-invoicing system this year until 29 November 2022 at the latest.

Take Action

Need help ensuring your business stays compliant with the evolving e-invoicing obligations in Ecuador? Contact us today to learn how Sovos’ solution for VAT compliance changes can help companies stay compliant in Ecuador and around the world.

The recent popularity of non-fungible tokens (NFTs) has captivated investors, governments and tax authorities. An NFT is a digital asset that represents real-world objects such as a piece of digital art, an audio clip, an online game or anything else. NFTs are purchased and sold online and are typically encoded with the same software as cryptocurrencies. They are stored in the blockchain to authenticate and track ownership of the NFT.

NFTs are generally one of a kind and can fetch tens of millions of dollars for a single NFT. The total market value of NFT sales skyrocketed into the billions in 2021. The high values and increase in sales have inspired several governments to introduce VAT legislation to define and tax these digital assets.

NFT VAT legislation

Multiple countries have announced specific VAT measures for the treatment of NFTs:

Spain: Spain is the first country in the EU to apply VAT to NFTs. The General Directorate of Taxes in Spain issued a ruling stating the supply of NFTs is an electronically supplied service subject to the standard VAT rate of 21%.

Belgium: The Belgian Finance Minister confirmed that the supply of NFTs is an electronically supplied service subject to the standard VAT rate of 21%.

Norway: The Norwegian tax administration defines the supply of NFTs as an electronically supplied service. It’s important to note that the creation or mining of an NFT will not attract VAT in contrast to a sale.

Washington State (U.S.): The Washington Department of Revenue is expected to announce that NFTs are subject to the state’s sales and business taxes as a digital product. This ruling will make Washington the first state to issue sales tax policies on NFTs.

In other countries, such as Switzerland, the supply of NFTs is generally considered an electronic service; however, there is a Swiss VAT exemption for electronic works of art directly sold by a creator that may apply to NFTs. VAT treatment of works of art may create implications for tax authorities when classifying NFTs.

Place of supply for NFTs

Another area of VAT concern surrounding NFT transactions is the place of supply. Place of supply for VAT purposes typically requires buyers and sellers to exchange domicile information such as a billing address. NFT transactions conducted through blockchain can avoid sharing personal information with intermediaries via an anonymous ‘wallet,’ which may lead to privacy concerns and other issues for tax authorities as they attempt to bring these transactions within the scope of VAT.

The VAT treatment of NFTs is still in its infancy and will continue to evolve alongside the digital asset industry. More insight into the classification of NFTs and the determination of the place of supply of such transactions will come as more tax authorities issue rulings analysing these unique digital assets.

Take Action

To find out more about what the future holds, download the 13th Annual VAT Trends whitepaper. Follow us on LinkedIn and Twitter to keep up to date with regulatory news and updates.

Tax compliance in Italy – where do we start? From monthly tax settlements to an annual declaration, prepayment, additional reporting and treatment of negative premiums – all these factors make Italy unique and one of the most challenging jurisdictions from an insurance premium tax (IPT) compliance perspective.

Let’s break it all down:

Insurance taxes

IPT rates range from 0.05% to 21.25%, depending on the class of insurance written. In addition to Italian IPT, there are also several insurance parafiscal charges:

Filing and settlement frequency

Monthly payments are due by the end of the month following the reporting month, except in December. The payment for November liabilities is brought forward to 20 December. Whilst, the annual declaration is due by 31 May following the calendar year.

IPT books

Although tax liabilities are paid monthly, and declarations filed annually, there is a legal obligation to maintain IPT books. IPT books are a chronological ledger on a policy level that must be readily available should the Italian tax authorities request the company records. IPT books are mainly requested for tax office audits, investigations or to support formal requests by an insurer.

Additional reporting

In addition to the monthly payments and annual declaration, the following reports are also required in Italy:

We explained additional reporting requirements in Italy in a previous blog.

Prepayment

Insurers are required to make an annual prepayment to the Italian tax authorities in anticipation of future tax liabilities. Prepayment is due by 16th November each year. It is calculated as a percentage (100% for 2022) of total IPT and Consap contribution made in the previous year, deducting any IPT paid in respect of Motor Third-Party Liability business. Once settled, this prepayment can be offset against IPT liabilities (excluding Motor Third-Party liabilities) arising from February, when the January tax liabilities are due.

In some cases, insurers can be required to hand over significant amounts of money to the tax office who will hold those amounts, in some cases for several years. Although prepayment should not represent an additional cost to insurance transactions, it can pose some cash flow considerations for insurers. Important to note is that the prepayment is due on a historical basis and cannot be settled based on an estimate of future tax liabilities. Businesses can use excess prepayment to offset tax liabilities in the next period or offset against the next prepayment.

Return premium

IPT credits relating to policy cancellations or adjustments are not permitted and should not be reclaimed from the Italian tax authorities nor offset against current liabilities. According to art. 4. Law 1216/1960, IPT “does not cease to be due even if the premium is fully or partially returned to the policyholder for any reasons”. Therefore, if the insurance company receives a premium, IPT is due even if this is subsequently reimbursed to the insured.

ANIA (the Italian trade body) has provided some clarifications to the market on the applicability of this provision, permitting tax reclaims only if the tax has not been fairly collected. This provision includes clerical errors or an incorrect qualification of the risk/scope of the insurance contract based on the information available when the policy was written.

An example of this is if the insurer mistakenly overcharged the policyholder, and the policyholder overpaid the tax. In such instances, the overpaid IPT can be deducted from tax liabilities arising in the same reporting period, i.e. the calendar year.

Penalties and interest

Italy is known for its strict application of laws and harsh penalty regime – up to 400% of the tax liabilities due. Furthermore, penalties and interest for late payments are time sensitive and are calculated daily. Additionally, penalties and interest are payable alongside tax liabilities.

Given its unique reporting standards, we recommend that insurers underwriting business in Italy are familiar with the intricacies and requirements in this jurisdiction. This will help them maintain compliance and avoid costly mistakes that could take significant time to resolve.

Take Action

At Sovos, our experienced IPT specialists can help your business ensure its IPT compliance in Italy. Get in touch about the benefits a managed service provider can offer to easy your IPT compliance burden.

Sovos recently hosted an online webinar on VAT recovery where we covered reciprocity agreements between the UK and EU Member States when making 13th Directive VAT refund claims. One of the questions that kept coming up is what are reciprocity agreements and why do they matter?

Reciprocity

When making 13th Directive refund claims, each EU Member State has different rules or conditions to meet before agreeing to a VAT refund. One of the conditions that EU Member States may require is a reciprocity agreement. A reciprocity agreement is a deal to reciprocate VAT refunds between two countries.

Therefore, VAT is only refundable when a similar tax is refundable for local businesses in the applicant’s country. For example, suppose a Spanish business was allowed to obtain a VAT refund in Norway through a similar scheme to the 13 Directive. In that case, Spain would likely have reciprocity with Norway and will allow the Norwegian businesses to make a 13th Directive Refund Claim in Spain.

There are currently around 19 EU Member States that require reciprocity agreements for non-EU businesses to make VAT refund claims. Of those, Greece and Slovenia currently only have reciprocity agreements with two countries (Norway and Switzerland), whilst Italy has three (Norway, Switzerland and Israel). When making EU VAT refund claims, businesses should review reciprocity and not assume they will automatically be approved.

UK businesses

Before Brexit, UK businesses could make VAT refund claims through the EU VAT Refund Directive (also known as the 8th Directive) which was built to allow reciprocity freedom for all EU Member States. However, post-Brexit, this mechanism for VAT refund claims no longer applied, and the UK fell within the 13th Directive Refund Scheme as a non-EU business.

Whilst the UK and EU have a Free Trade and Cooperation Agreement in place, there was no specific mention of reciprocity in VAT refund claims as these should be agreed between those particular EU Member States and the UK. Therefore, it may be more difficult for UK businesses, that make refund claims around the EU, to recover VAT incurred in some countries.

Regarding current reciprocity agreements with the UK, the only official announcements we have seen to date have been from Germany, Spain and Hungary. However, we are aware of ongoing discussions between the UK and other EU Member States.

HMRC states they will only refuse a claim if the reciprocal country has a scheme for refunding taxes but refuses to allow UK traders a refund. Therefore, HMRC is willing to allow VAT recovery in the UK for EU businesses providing UK businesses receive the same treatment as the EU. It would therefore be in the interests of EU Member States to allow VAT recovery for UK businesses for businesses in their own country to benefit from the same treatment.

Why does it matter?

Most EU Member States require reciprocity when making VAT refund claims. Therefore, the law of reciprocity is an integral factor when looking to make a VAT refund claim in any jurisdiction. It’s important to understand these reciprocity laws to prevent wasting time and money on making a VAT refund claim from a country that doesn’t allow it.

Take Action

To find out more about what we believe the future holds, download the 13th Annual VAT Trends whitepaper. Follow us on  LinkedIn and  Twitter  to keep up to date with regulatory news and updates.

E-invoicing was introduced in Peru in 2010, following the continuous transaction controls (CTC) trend in Latin American countries for a more efficient collection of consumption taxes. Since then, the government has rolled out measures to encompass a significant number of taxpayers under the country’s mandatory e-invoicing regime and advance new technical and institutional structures within its System of Electronic Emissions (SEE – Sistema de Emisión Electrónica).

June 2022 marked the final deadline for including the last group of taxpayers in the country’s e-invoicing mandate. However, the government continues to expand its system, with the latest update proposed by a draft resolution introducing important changes to the Peruvian e-transport document, the Guía de Remisión electronica – GRE.

Changes in the E-transport Document

The Peruvian tax authority (SUNAT) published on 2 June 2022 a draft resolution introducing changes to the GRE, the electronic transport document that must be issued in connection to invoices (comprobantes de pagos) for the control of goods under transportation. The GRE is only vital while the goods are in transit but is a document commonly kept by companies to maintain internal controls of transported goods.

The new draft resolution aims to regulate the issuance of the e-transport document further, introducing several changes, mainly to optimise the control of goods and eliminate the use of paper.

Among the many changes introduced by the draft, the main are:

What this means for taxpayers

Taxpayers must be ready to issue GREs remitente and transportista exclusively through their own systems using a software provider (PSE – proveedores de servicios electrónicos) or the SUNAT Portal. This requirement may represent quite the impact on taxpayers that regularly issue a large volume of GREs through the electronic services operator’s channel, the SEE-OSE (Operador de Servicios Electrónicos).

The most impactful change, however, is that taxpayers will only be able to use the GRE as a support document for the transport of goods. Under current legislation, besides the GRE, the factura guía and the liquidacion de compras, which are regular invoices with additional transport information, can also be used to support transporting goods. Issuance of the factura guía is a common practice since it entails the generation of one single document that serves both the sales transaction and transportation. However, the draft resolution only allows the use of the GRE for this purpose.

The introduction of the QR code is the government’s approach to a modern and efficient control method. The bidimensional code is generated by SUNAT once the CDR (constancia de recepción) acquires accepted status and may be presented in either digital or printed format.

Although taxpayers may still support transportation by providing their registration number (RUC), the series and the GRE number, it is expected that the QR code will become the principal method to support transit, and the RUC will only be used as a contingency method.

A new type of e-transport document has also been introduced. The guía de remisión por evento may only be issued through the SUNAT Portal and is used to complement a previously issued GRE in the case of unforeseeable events not attributable to the issuer. In these cases, current regulation supports the transfer with the same document. The draft resolution, however, requires that the GRE por evento is issued before restarting the transportation of goods.

Another change that taxpayers must be aware of, as it might give rise to complex scenarios, is the creation of a new catalogue of measure units applicable only to GREs, found in Annex III. The already existent measure unit catalogues for all other invoices will not apply to the GRE, which is bound to cause a lack of uniformity since the same concept would use two different catalogues.

Rollout Dates

The draft resolution sets 13 July 2022 as its date of entry into force when taxpayers already in the scope of the GRE may start to issue through the appropriate channels and voluntarily start using the QR code as the support for transportation.

However, until 30 September 2022, taxpayers may exceptionally issue GREs remitente through the SEE-OSE, considering the conditions and requirements in place before the publication of the resolution. The draft also establishes a list of certain taxpayers (issuers and transporters) who will become obliged to issue the GRE and the corresponding dates, in Annex X, according to taxpayer types and the goods in transport, starting 1 January 2023.

What’s next?

As this is a draft resolution, the changes only become definite with the official publication of the final version of the resolution. However, as 13 July 2022 approaches, the resolution is expected to be published in the following weeks. Therefore, taxpayers who are already under the obligation to issue GREs must be ready to comply with the new mandates within a month.

SUNAT accepts comments to the draft resolution, which can be sent via email until 16 June 2022, to the following address: RPATRICI@sunat.gob.pe.

Take Action

Speak to our team if you have any questions about the latest e-invoicing requirements in Peru. Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world

In line with the obligations set by the European Directive 2014/55 on electronic invoicing in public procurement, Belgium introduced a mandate for public entities to receive and process electronic invoices in 2019.

For Brussels, Flanders, and Wallonia the initiative went beyond the bare minimum of the EU Directive requirements and introduced obligations to also issue e-invoices for suppliers to public sector entities in these regions.

With recent legal changes, Belgium is now preparing to extend the e-invoicing obligation to even more businesses by introducing mandatory e-invoicing in the B2B sector.

E-invoicing in public procurement

On 31 March 2022, the Belgian Official Gazette published the Royal Decree of 9 March 2022, which intends to expand the obligation to issue electronic invoices to all suppliers of public institutions in the context of public contracts and concession contracts.

As previously mentioned, such obligation was already present in multiple regions including Brussels, Flanders, and Wallonia, however, now the mandate covers suppliers of public bodies in all regions. The dates concerning issuing electronic invoices in the public contracts, based on their value are:

Only public contracts and concessions, which estimated value is less or equal to €3,000 excluding VAT are exempt.

E-invoicing in the private sector

As reported previously, Belgian authorities have indicated the ambition to move beyond B2G e-invoicing. On 11 May 2022, the Belgium Chamber of Representatives published a draft law amending the law of 2 August 2002 on combating late payment in commercial transactions, as last amended by the law of 28 May 2019, with the aim to implement electronic invoicing between private companies (B2B).

The rationale behind the proposal is the need to enable companies to invest in electronic invoicing, after already supporting the digitalization of invoicing in the B2G sector. The benefits that will follow are a much faster invoicing process, which is more secure and minimises the risk of errors and missing data.

Moreover, the chances of fraud will decrease while privacy protection increases, without the need for human intervention in the invoicing process.

Lastly, the environmental aspect concerning less paper consumption is highlighted. In terms of financial gain, as calculated by the Administrative Simplification Service (DAV), full digitalization of invoices in Belgium could reduce the administrative burden by €3.37 billion.

Based on the draft law, companies (with the exception of micro-enterprises) will be obliged to send their invoices in structured electronic form (in line with the European standard for electronic invoicing EN 16931-1:2017 and CEN/TS 16931-2:2017) as well as receive and process invoices electronically.

Nothing in the draft law describes the involvement of a centralised clearance platform, or the reporting of e-invoice data to the tax authorities. At this time, there is therefore no formal indication that the proposed mandate would be designed as a Continuous Transactions Control (CTC) e-invoicing system, however it is possible that the system will evolve to connect with PEPPOL.

The law will come into effect on 1 January 2025 regarding SMEs, thereby ensuring that companies have adequate time to prepare for the transition. If it comes to large enterprises, it is expected that mandatory e-invoicing will be present from January 2024. Originally the date concerning large taxpayers was July 2023, and small taxpayers from 2024, therefore those dates will most likely be postponed.

Take Action

Get in touch about how Sovos can help with your e-invoicing compliance challenges.