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

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

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

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

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

Register today

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

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

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

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

Register now.

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

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

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

The webinar will cover:

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

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

Register now.

The Electronic Invoicing Law of the Dominican Republic was published on 17 May 2023, mandating e-invoicing throughout the territory as of 18 May 2023.

The law was published in the Official Gazette, whose purpose is to regulate the mandatory use of electronic invoicing in the Dominican Republic, including the establishment of the electronic invoicing tax system and its characteristics, optimisation results and contingencies, as well as the entry periods and tax facilities that taxpayers who take advantage of this system will be granted.

The law includes a Chapter on the Criminal and Tax infractions and penalties for non-compliance and still allows using paper invoices for certain contingencies.

Scope of application for e-invoicing in the Dominican Republic

The law applies to natural and legal persons, public or private. It’s also applicable to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.

Recognition and authorisation

All electronic invoice issuers in the country shall:

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

The requirement for holographic or handwritten signatures and commercial seals for electronic invoices is fulfilled by using digital signatures supported by a digital certificate.

Electronic invoices cannot be modified once signed digitally and sent to the DGII.

Validation of the electronic invoice in the Dominican Republic

The electronic invoice must comply with the standard format established by the tax authority, which will be validated by computer systems. E-invoices will only be admissible when they comply with this validation.

Electronic invoices will be sent to the authority and the electronic receiver through electronic applications connected to the internet and in an XML file.

The electronic invoice will have a Printed Representation (RI) of the E-CF which will be delivered as a physical document to non-electronic receivers in exceptions. Otherwise, it will be delivered to electronic receivers when they are in contingency so that they can prove and report purchase transactions to the authority and third parties – as well as support tax credit or consumption, and keep the indicated documents as established by current legislation.

The General Directorate of Internal Taxes (DGII) will be the competent authority for validating and certifying the content and integrity of the electronic invoice.

Dominican Republic: Electronic Invoicing Tax System

The Electronic Invoicing Tax System is administered by the DGII and will be used to validate and accredit all electronic tax receipts resulting from electronic invoices. It will also validate legal forms or electronic tax documents that modify them and that serve as support to back up expenses and tax credits.

The DGII is also responsible for ensuring the integrity of information that is sent instantly for validation and the accreditation of electronic tax receipts (E-CF).

Issuance, conservation, types and sequence of electronic tax receipts

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

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

Online validation

The electronic tax receipts sent to the DGII will be validated online through the information system, according to the schemes published by the technical documentation and complementary standards that define their structure and behaviour.

Once they’ve been compared and validated against the criteria, the DGII will respond by delivering a response number identified as “trackID” with which the E-CF issuer can consult the document’s status.

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

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

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

Sequence of electronic tax receipts

All E-CFs must have an electronic tax receipt number (E-NCF), authorised by the DGII, which consists of an alphanumeric sequence.

The number and type of electronic tax receipt numbers will be authorised according to the economic activity registered in the National Taxpayer Registry (RNC), operational volume, and level of compliance of the taxpayer – as well as the risk profile of the taxpayer, in accordance with the parameters established by the DGII.

Duties of Electronic Issuers

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

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

Standard format for the structure

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

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

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

Implementation schedule for e-invoicing in the Dominican Republic

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

The DGII will publish the list of taxpayers required by law to issue E-CF. With the approval of the DGII, taxpayers may agree to extend the deadline for compliance with electronic invoicing regulations.

Voluntary period and incentives

A voluntary period is provided for all taxpayers who wish to be issuers of electronic invoices before implement the previous calendar. The DGII is providing incentives consisting of tax credits for MIPYMES and Large National Taxpayers.

Looking for further information on e-invoicing in the Dominican Republic? Contact our expert team.

It’s a good year to be an IT leader. After far too many years of the phrase “do more with less” being the mantra of most organizations when it came to technology spending, things are finally looking up.

According to research firm Gartner, IT spending will reach an estimated $4.5 trillion in 2022. This represents a 5.1% increase over 2021 and is a much-needed boost for businesses in need of technology updates that may have been placed on the backburner due to the COVID-19 pandemic.

IT departments are also eager to switch focus from just keeping things afloat to more long-term projects that will strategically and successfully support the future of work. This assertion is backed by numbers provided by IT management solutions firm Flexera in its State of Tech Spend Report.

When asked where budgets were being allocated to this year, 54% of those surveyed expected increased investment and resources to be applied to technology that makes it easier and more seamless for employees to work from home. Another 42% of those surveyed stated a newfound willingness to move to the cloud to support the realities of a post-pandemic world. Participants in this survey were all executives and high-level managers in IT with significant knowledge of their organizations’ overall IT budgets, weighed in on what to expect in the year to come.

These findings show the level of importance businesses are putting on hybrid and flexible work environments. The likelihood that working from home, at least in some capacity, is here to stay has IT departments rethinking their strategies to be prepared to tackle any challenges that may arise.

Could the Government Stand in the Way?

The strategies being outlined by IT departments are sound and inline with the world in which we now exist. However, there is another post-pandemic force at work with the potential to derail the best laid plans and devour a vast amount of budget and resources. Government mandated e-invoicing.

If you work as an IT leader at a multinational company, you likely fall into one of the two following categories. One, you’ve been brought into deal with the new realities of real-time oversight and enforcement from regulatory authorities. Or two, you are about to be brought into the fray with your own internal mandate, solve this problem for good.

Why am I so definitive in this declaration? Because I work with some of the biggest brands on the planet and I am witnessing firsthand the impacts these mandates are having on their IT organization.

When it comes to IT projects, most are not reactionary but the result of careful and methodical planning over a long period of time. However, the government is changing the rules here. No longer are projects and upgrades on your timeline. When they implement new laws and mandates it’s either you move quickly to address the issue and make it right or you pay the consequences which can range from hefty fines to even losing your license to operate.

What Does This Mean for Me?

As government mandated e-invoicing laws quickly ramp up around the world, they represent a credible threat to your IT budgets. IT departments must be prepared for the new realities that accompany government mandated e-invoicing. With authorities now in the data stack of your businesses examining transactions in real-time as they traverse your network, you will need a solution that enables you to deliver the information in the format required in real-time.

Bottom line, compliance is no longer a tax issue. IT leaders and other senior leadership must work together to align business functions across the board. IT needs to ensure the resources and tools are in place to meet government mandated obligations, no matter the company’s industry or location.

A failure to address the problem early will only lead to more complex and costly problems down the road that will absorb critical budgets and resources earmarked for other priority projects.

Take Action

If you aren’t sure where to start in building your strategy, reach out to our experts.

In Turkey, the Revenue Administration (TRA) published the long-awaited e-Delivery Note Application Manual. The manual clarifies how the electronic delivery process will work in addition to answering frequently asked questions. It addresses the application as well as its scope and structure, outlines important scenarios and provides clarity for companies who are unclear about the adoption of e-delivery notes.

What is the e-delivery note application?

The e-delivery note is the electronic version of the “delivery note,” currently printed on paper.  As a result, it allows the TRA to regularly monitor the movements of delivered merchandise in the electronic environment.

Electronic delivery has the same legal qualifications as the delivery note but is issued, forwarded, retained, and submitted digitally.

Who does the e-delivery note mandate affect?

According to the circular published by the TRA at the end of February, taxpayers in scope of the e-delivery note application are;

Taxpayers engaged in fruit and vegetable trade as brokers or merchants completed their transitions of January 1, 2020. Other taxpayers covered by the mandate must be ready by July 1, 2020.

Taxpayers deemed to be risky or at low levels of tax compliance by the TRA must complete their transition to the e-delivery note application within three months after being notified.

Other topics included in the e-delivery note application manual

Besides explaining the basic concepts, the manual also details the previously announced scenarios providing answers to many areas that were confusing for taxpayers.

The main scenarios are:

In addition, other topics covered include:

Full details on the Turkey E-Delivery Application Manual are available in Turkish from the TRA e-Document website.

Take Action

Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world.

Companies dealing with complex sales and use tax determination, VAT regulations and other tax challenges across the globe know that SAP alone is not equipped to support the varying requirements from country to country. As SAP sunsets support and updates for ECC and R3, companies must move to HANA to keep their systems up to date. With this inevitable change to S/4HANA or HANA Enterprise Cloud, now is the perfect time to step back and develop a comprehensive strategy to managing tax worldwide.

SAP users must migrate to HANA by 2025, but a majority have not yet started the process. Since the move requires major changes to ERP infrastructure, SAP users with global operations should take advantage of the unique opportunity to be more strategic in their implementation. With the right approach, companies can future-proof their solutions in a way that ensures they can keep pace with constant changes in tax regulations throughout Latin America, Europe and beyond.

Learn how to minimise business disruption during an SAP S/4HANA upgrade project in the wake of modern tax: Read Preparing SAP S/4HANA for Continuous Tax Compliance and don’t let the requirements of modern tax derail your company.

Governments around the world are implementing technology for tax enforcement. In order to keep up, companies must make the digitisation of tax a core pillar of their HANA migrations.

In the move to HANA, companies must consider the new world of tax, which includes:

The move to S/4HANA or HANA Enterprise Cloud requires companies to move all of their processes, customisations and third-party add-ons to the new platform. As such, there are several critical considerations.

What to migrate, and when

Since most companies’ SAP ERP systems have been built and customised over many years, many will benefit from a phased approach to HANA implementation. The less customised modules, such as Financial Accounting (FI) and Controlling (CO) will be easier to move than Materials Management (MM) or Sales and Distribution (SD), which will need a long-term plan for customisations.

What to do with customisations and third-party apps

Many SAP configurations have become a patchwork of customised code and bolt-on applications. This is especially true when it comes to sales and use tax determination, e-invoicing, and VAT compliance and reporting, since requirements are vastly different in every jurisdiction a company operates. The move to HANA gives companies the opportunity to consolidate, eliminating local configurations in favour of a global strategy. Companies that proactively plan can help to ensure that the next 15 years are simplified, without the constantly changing configurations needed in the previous 15 years as governments have gone digital.

Take Action

With an upcoming migration to SAP HANA, businesses must consider a solution that maintains SAP as the central source of the truth while keeping pace with constant regulatory change. Learn how Sovos is helping companies do just that, safeguarding the value of their HANA implementation here.