Indonesia E-invoicing

Indonesia made e-invoicing mandatory for all VAT-registered taxpayers on 1 July 2016, expanding upon its initial e-Faktur rollout in Bali and Java from 1 July 2015.

With its own official e-invoicing system and mandate, Indonesia has plenty for taxpayers to learn and comply with. This page is the ideal starting point for understanding Indonesia e-invoicing.

Table of contents

1. E-invoicing requirements in Indonesia

2. Timeline of e-invoicing adoption in Indonesia

3. Penalties: What happens if I don’t comply with e-invoicing in Indonesia?

4. Setting up e-invoicing in Indonesia with Sovos

5. FAQ

6. Additional resources

E-invoicing requirements in Indonesia

After experiencing challenges in its tax control system, Indonesia adopted an e‑invoicing system locally known as e‑Faktur Pajak. Leveraging data reported in real-time via continuous transaction controls (CTCs) allows the Indonesian tax authorities to reduce occurrences of fraud whilst helping to close the tax gap.

Introduced in 2014 and effective from 2016, Indonesia’s e‑invoicing system seeks to combat the tax gap. Indonesia’s solution was the implementation of an invoice clearance system, where invoices must be approved by the local tax authority prior to being sent to a customer.

E-invoicing is mandatory for all corporate VAT taxpayers. It’s compulsory for all invoices to be processed and issued electronically through the government’s official system, eFaktur.

Also known as tax invoices, e-invoices in Indonesia are typically issued for:

• Delivery of taxable goods (Barang Kena Pajak)
• Rendering of taxable services (Jasa Kena Pajak)
• Advance payment of taxable goods or services

eFaktur e-invoices should be created by applications approved by Indonesia’s Director of Taxation (DGT). Options include client desktop, web-based and host-to-host applications. Electronic invoices need to be secured using an electronic signature, and taxpayers need electronic certificates to verify their identity—the latter need to be renewed every two years. Validated invoices receive a QR code from the DGT as proof of authenticity.

It’s worth noting that the VAT return submission has been integrated with eFaktur, and VAT returns are typically required to be submitted monthly via the platform.

Timeline of e-invoicing adoption in Indonesia

Indonesia’s e-invoicing journey has plenty of key moments:

• 1 July 2014: e-Faktur is introduced
• 1 July 2015: e-Faktur becomes mandatory for VAT-registered taxpayers in Bali and Java
• 1 July 2016: e-Faktur Pajak became effective for all VAT-registered taxpayers based in the country
• 1 October 2020: New e-Faktur Pajak version 3.0 released
• 31 July 2024: The development of a Core Tax System (PSIAP) is announced to automate and digitise tax administration services

Penalties: What happens if I don’t comply with e-invoicing in Indonesia?

Indonesia penalises taxpayers who fail to meet their compliance obligations. For example, if a tax invoice is not issued (or is issued late or invalid), the taxpayer will be fined 1% of the VAT base.

FAQ

What are the requirements for e-invoicing in Indonesia?

All VAT-registered businesses in Indonesia must send and receive e-invoices via the e-Faktur platform. They must submit invoices for validation before sending to the buyer.

Is electronic invoicing mandatory in Indonesia?

Issuing e-invoices has been mandatory for corporate taxpayers since 1 July 2016.

Are paper invoices or PDF invoices still allowed in Indonesia?

No, only validated e-Faktur invoices issued via the DGT platform are legally recognised for tax purposes.

Is VAT reporting connected to the e-Faktur system in Indonesia?

Yes, the e-Faktur system is integrated with VAT reporting. The introduction of e-faktur v3.0 in October 2020 enabled the auto-population of VAT returns for taxpayers in the scope of the local e-invoicing mandate.

Setting up e-invoicing in Indonesia with Sovos

E-invoicing is a global trend, though your requirements differ by country. Indonesia is far into its e-invoicing journey, while some countries have yet to even announce any official plans.

Doing business internationally is tough, especially when you add compliance to the mix. Working with Sovos means choosing a single vendor to handle tax compliance, wherever you operate.

Let us take care of your compliance burden so you can continue to focus on growing your business.

Get in touch with us

Additional resources

Indonesia VAT

Find out more about tax compliance in Indonesia.

Learn more

Asia Pacific E-invoicing

Learn about e-invoicing across the Asia Pacific region.

Read here

E-invoicing: Your Guide

Your ultimate one-stop shop for electronic invoicing.

Learn more

Update: 26 March 2024 by Carolina Silva

The implementation of the qualified electronic signature requirement to establish the presumption of integrity and authenticity for e-invoices has been postponed, as announced in the 2024 State Budget. It had already been postponed several times in recent years.

This requirement was initially expected to be enforced on 1 January 2024. However, after the latest postponement, the eSignature requirement is now expected to be enforced from 1 January 2025.

Find out more about e-invoicing in Portugal with our dedicated overview.

Update: 19 December 2022 by Carolina Silva

New grace period for invoice reporting and postponement of stricter integrity and authenticity requirements

The Portuguese State Secretary of Fiscal Affairs (SEAF) recently issued issued Order 8/2022 XXIII, which introduces a grace period for reporting obligations, as well as yet another of the stricter integrity and authenticity (I&A) requirements for electronic invoices.

The Order aims to highlight and promote Portugal’s plans to reduce the invoice data reporting obligations time window, as established by article 3 of Decree-law 198/2012. The Order also aims to establish the constant move towards real-time transmission of invoice data, as observed in other countries throughout the world.

Additionally, the Order affects the requirements of Decree-law 28/2019, by which the Portuguese government enacted a series of measures concerning invoice issuance, processing, and archiving, with the aim of simplifying and digitizing invoicing compliance in the country.

Changes in invoice reporting obligations

Since 2019, the Portuguese government has continuously reduced the time window for the invoice data reporting obligation. Starting 1 January 2023, the deadline for the monthly communication of invoice data will be until the 5^th day of the month following the issuance of the invoice.

The new Order introduces a grace period concerning this obligation, with no penalties applied if reporting is carried out until the 8^th day of the month following the invoice issuance. This is also applicable for cases where there is non-issuance of invoices during the relevant time period, where a nil monthly submission should also be made until the 8^th day of each month.

The Portuguese government has also decided to implement a system of informative alerts by the tax authority in 2023. The aim is to promote voluntary compliance within the 5-day deadline by notifying taxpayers who don’t communicate invoice data until the 5^th of the month following the issuance of the invoice.

Postponement of the stricter e-invoice integrity and authenticity requirements

Decree-law no. 28/2019 established several measures regarding invoicing, including a stricter integrity and authenticity requirement for invoices and fiscally relevant documents issued electronically. One of these requirements is the obligation to apply a qualified electronic signature (QES) or seal or use electronic data exchange system (EDI) for e-invoices, as per the European model.

This requirement has been postponed multiple times since enacted and was due to become mandatory on 1 January 2023. The newly published Order, however, explicitly states that until the 31 December 2023 all PDF invoices are considered electronic invoices for all fiscal effects.

Therefore, from the 1 January 2024, taxpayers must comply with the requirement of applying a QES or use EDI per the European Model to ensure integrity and authenticity of e-invoices.

Additional upcoming Portuguese requirements

Besides the stricter integrity and authenticity requirement and the grace period for communication of invoice data, taxpayers are expected to comply with new e-invoicing mandates underway in Portugal.

Namely, the mandatory B2G invoicing in the CIUS-PT format starting on 1 January 2023 for medium, small and micro enterprises. No further guidance has been issued at this time regarding a postponement of the adoption of the CIUS-PT format for these last taxpayer groups, meaning that public entities may reject invoices issued in other formats after the go-live date.

Still have questions about Portugal’s e-invoicing requirements? Speak to our tax experts.

Update 31 May 2022 by Kelly Muniz

Portugal: Postponement of the Stricter Authenticity and Integrity Requirements

In 2019, the Portuguese government enacted Law Decree n. 28/2019, introducing a full reform of the rules concerning the issuance, processing and archiving of invoices, with the main goals of implementing electronic invoicing, simplifying compliance for taxpayers and reducing the VAT gap.

The expanded scope of those obliged to use a billing software certified by the Portuguese Tax Authority, the inclusion of a QR code and a sequential unique number code (ATCUD – código único de documento) and the stricter integrity and authenticity requirements when issuing invoices and other relevant fiscal documents were some of the most impactful mandates introduced by this law.

However, many taxpayers struggled to comply with the new requirements. As such, the tax authority has delayed the launch of different components of the Decree, and some of them remain to be implemented.

In a recent Ministerial Decision from 26 May 2022, the goal line for implementing the stricter integrity and authenticity requirement, this article’s focal point, has been moved yet again, now to 1 January 2023.

The stricter integrity and authenticity requirement

The Decree from 2019 established that in order to guarantee the requirements of authenticity and integrity of electronic invoices and other relevant fiscal documents have been met (per article 233 of the EU VAT Directive 2006/112/EC), taxpayers must use a qualified electronic signature, a qualified electronic seal (QES) or an electronic data exchange system (EDI) with security measures per the European Model EDI Agreement. This change is important as it limits the choice of compliance methods generally recognised within the EU to one between only QES and EDI.

To achieve this goal, the Decree determined that taxpayers would only be able to use previously accepted advanced electronic signatures or seals (the lower level of signature security) until 31 December 2020. After that, all invoices would be required to incorporate a qualified signature or seal or be issued through EDI.

When is the new deadline?

The original deadline for implementing the stricter integrity and authenticity requirements has been postponed many times. The first delay was ordained through Despacho n. 437/2020-XXII of 9 November 2020 of the State Secretary for Fiscal Matters (SEAF – Secretário de Estado dos Assuntos Fiscais). According to this, PDF invoices without a QES would be accepted until 31 March 2021 and considered electronic invoices for all fiscal purposes.

Since then, the mandate has been postponed four additional times, with the last one taking place on 26 May 2022, by Despacho n. 49/2022-XXIII of the SEAF. According to this act, PDF invoices with no specific security measures must be recognised as electronic invoices for fiscal effects until 31 December 2022, instead of the previously established date, 30 June 2022.

Therefore, from 1 January 2023, taxpayers covered by Law Decree n. 28/2019 must comply with the requirement to ensure authenticity and integrity either by applying a Qualified Electronic Signature/Seal or by using “EDI by-the-book” (EDI under the European Model EDI Agreement).

Additional upcoming requirements

Besides the stricter authenticity and integrity requirement, taxpayers must be ready to comply with additional new invoicing mandates underway in Portugal. On 1 July 2022, it will be required to only use structured electronic invoices in CIUS-PT format for B2G transactions. The B2G mandatory e-invoicing is already under implementation through a phased roll-out. It is set to be finalised and become compulsory for small and medium companies and microenterprises on 1 July 2022. Furthermore, the inclusion of the ATCUD code on invoices and other fiscal relevant documents, which has also been previously postponed, is set to become mandatory on 1 January 2023.

Since becoming the first EU country to make electronic invoicing mandatory through a clearance process in 2019, Italy has kept a steady pace in improving its continuous transaction controls (CTC) system to close the gaps in VAT compliance.

Over recent years, Italy has gradually expanded its system by introducing various mandates. The following changes reflect the government’s efforts to tie up loose ends and assert more far-reaching control mechanisms to achieve an efficient and well-rounded system.

The changes listed below become effective on 1 July 2022, with some already available on a voluntary basis and others allowing a short grace period for adjustment.

Mandatory cross-border invoice reporting through the SDI

The retirement of the tax reporting scheme, Esterometro, will require Italian taxpayers to report all cross-border transactions through the Sistema di Interscambio (SDI). Since the clearance of cross-border invoices is not within the Italian CTC system’s scope, this is a clear step towards centralisation.

Taxpayers may continue to exchange invoices in any agreed way, including the FatturaPA format. The reporting, however, must be done through the SDI using the FatturaPA format. This has been optional since January 2022.

New taxpayers in scope for the e-invoicing mandate

Italy has recently expanded the scope of its e-invoicing mandate bringing in new groups of taxpayers:

• Taxpayers who adopt the flat-rate tax regime (regime forfettario)
• Amateur sports associations and third sector entities with revenue up to €65,000

A short grace period has been established from 1 July 2022 until 30 September 2022. During this period these taxpayers may issue e-invoices within the following month from when they carried out the transaction without any penalties being applied.

The new mandate also states that microenterprises with revenues or fees up to €25,000 per year will be required to issue and clear e-invoices with the SDI, but this only starts in January 2024.

Mandatory e-invoicing between Italy and San Marino

Following the Italian CTC mandate, Italy and San Marino began negotiations to accommodate invoice exchange between the two countries through the more modern clearance-based system, which requires taxpayers to issue and clear e-invoices using the FatturaPA format. This was established by creating a “four-corner” model with the Italian SDI as the access point for Italian taxpayers and the HUB-SM platform as the SDI counterpart on San Marino’s side.

The mandate covers the sale of goods shipped to San Marino for taxpayers who are residents, established or identified in Italy. For sales of goods to Italy, an e-invoice must be issued by the economic operators with identification attributed to them by the Republic of San Marino. A significant effect of this mandate is that the reporting obligations through Esterometro will come to an end.

The voluntary transition phase started in October 2021.

Getting ready for change

The start of the second semester of 2022 will bring significant changes, and taxpayers have limited time to conform as July approaches. Understanding how these new requirements can affect your company will ensure compliance and avoid unnecessary mistakes.

Update: 30 May 2024 by Dilara İnal

Implementation waves of Phase 2 of E-invoicing in Saudi Arabia

Implementation of Phase 2 of Saudi Arabia’s e-invoicing initiative started in January 2023 with the first wave of taxpayers. Subsequent waves – which are announced by Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) – are based on the generated revenue subject to VAR in Saudi Arabia.

In addition to announcements on ZATCA’s website, ZATCA notifies taxpayers at least six months before the enforcement date of their new e-invoicing requirements.

Current timeline for Phase 2 waves

Waves dictate when taxpayers of particular revenue statures are required to take part in Saudi Arabia’s e-invoicing program. The table below details the waves, revenue threshold and applicable dates for the initiative’s second phase.

Read our overview for more information regarding Saudi Arabia’s push towards e-invoicing.

Update: 20 January 2023 by Dilara İnal

Voluntary participation in Phase 2

Taxpayers now have the option to start complying with the Phase 2 requirements on a voluntary basis before the integration enforcement date arrives.

Companies were previously not allowed to voluntarily start the implementation of Phase 2. ZATCA changed its approach to voluntary participation in December 2022.

Looking for further clarification on Phase 2 of Saudi Arabia’s e-invoicing system? Contact our experts now.

Update: 24 October 2022 by Dilara Inal

Upcoming phase 2 requirements for e-invoicing in Saudi Arabia

Phase 2 of Saudi Arabia’s e-invoicing system rollout is fast approaching. See below for details about the timeline and the requirements for the integration stage of implementation.

Rollout and timeline of Phase 2

Implementation will begin in January 2023 and taxpayers will need to issue and submit e-invoices in a specific format.

Phase 2 is planned as a gradual implementation. The first wave of implementation covers taxpayers with an annual turnover of 3 billion riyals (approximately 800 million USD) or more for the 2021 period.

Taxpayers who are in the scope of the first wave are notified by the tax and customs authority (ZATCA) about their obligations under Phase 2 – these obligations start six months after this notification, even though the official date has been announced as 1 January 2023.

The second wave of taxpayers are businesses with revenue subject to VAT which exceed half a billion riyals during 2021. Taxpayers in this group will be notified during the first six months of 2023 and their Phase 2 obligations start six months after this notification. The second wave of Phase 2 will be implemented during the period of 1 July 2023 to 31 December 2023.

Integration phase requirements

Firstly, all invoices must be issued in UBL 2.1 format. B2B invoices are subject to a CTC clearance regime, whilst B2C invoices are reported to the tax authority within 24 hours.

Under the new regime, B2B invoices can only be sent to the buyer after the tax authority’s approval which gives legal validity to invoices.

Each invoice must be generated in a single sequence and include a hash value computed from previous invoices’ elements. This hash function ensures that invoice data isn’t modified or tampered with.

Also, an invoice counter value and a globally unified identification number (UUID) must be included. The QR code is generated by ZATCA during the clearance of an invoice, and it must be shown in case B2B and B2G invoices are sent to the buyer in human-readable form. For B2C invoices, the QR Code is generated and applied by the taxpayer during issuance of the invoice. In addition, self-billing is permitted for domestic B2B transactions and the invoice must contain a statement declaring it is self-billed.

Taxpayers who are yet to be notified by ZATCA for phase 2 implementation should continue to comply with phase 1 requirements without any change.

How to prepare for the changes

We advise all taxpayers to follow upcoming updates to ensure they are prepared for phase 2’s complex requirements. Considering the impact of this CTC regime, other e-invoicing initiatives are expected to be implemented in the Gulf region in the near future

Still have questions about Saudi Arabia’s e-invoicing phase 2 implementation? Speak to our tax experts.

Update: 30 May 2022 by Selin Adler Ring

ZATCA launches e-invoicing developer portal for e-invoicing phase 2

Saudi Arabia´s e-invoicing system is being rolled out in two phases; the second phase’s requirements differ from the first phase. The first phase started as of 4 December 2021 for all resident taxable persons. The second phase will go live on 1 January 2023, and the impacted taxpayer group has not yet been announced. However, the Zakat, Tax and Customs Authority (ZATCA) has made considerable progress in kicking off phase 2.

Launch of the e-invoicing portal

Phase 2 will introduce a Continuous Transaction Controls (CTC) regime in which e-invoices, electronic credit and debit notes will be transmitted to the ZATCA platform in real-time. A clearance regime is prescribed for B2B invoices, while B2C invoices must be reported to the tax authority platform within 24 hours of issuance. Therefore, ZATCA was expected to introduce its e-invoicing platform well in advance of the launch of phase 2.

As expected, the ZATCA recently announced the launch of an E-Invoicing Developer Portal (Sandbox). Users will use the Sandbox to simulate the integration with ZATCA’s platform and can access details on the APIs and other requirements through this platform upon registration.

Proposed changes to e-invoicing rules

ZATCA has proposed specific changes to e-invoicing rules. The proposed changes are under public consultation and interested parties may submit their feedback until 10 June 2022.

The changes aim to clarify some requirements (e.g. Cryptographic Stamp, hash, counter etc.) rather than introducing new ones.

The next steps

The last clarifying changes to the e-invoicing rules are underway, and the developer portal has been launched. We’re now expecting ZATCA’s announcement of the taxpayer groups in the scope of the mandate and expect it to happen at least six months before the go-live date. As the ZATCA plans to roll out phase 2, there will be different timelines for different taxpayer groups. We expect this information within the coming months.

Update: 29 February 2024 by Inês Carvalho

Since January 2023, Romania‘s mandatory e-transport system has monitored the transport of certain goods in the national territory. The e-transport system operates in parallel with Romania’s e-invoicing system.

This blog answers frequently asked questions about Romania’s e-transport system including what and who is in scope, document format and fines for non-compliance.

What transportation is in scope?

From January 2023, the Romanian e-transport system monitors the transport of high fiscal risk goods on the national territory.

Transportation in scope includes:

• Intra-community acquisitions
• Intra-community deliveries
• Imports and exports
• Domestic transportation between different economic operators
• Domestic transportation between two locations belonging to the same economic operator
• Transport of goods subject to intra-community transactions in transit through Romania

In addition to the transportation type, the categories of road vehicles in scope are as follows:

1. Road vehicles with a maximum authorised mass (MAM) of at least 3.5 tons, and
2. Loaded with high fiscal risk goods with a total gross mass of a minimum of 500 kg or a total value of more than 10,000 Leu (appx. €2,000)

Transportation of high fiscal risk goods that don’t fall within this scope do not need to be declared in Romania’s e-transport system.

The carriage of goods intended for diplomatic missions, consular posts, international organisations, the armed forces of foreign NATO Member States or as a result of the execution of contracts, are not in the scope of the RO e-Transport system.

From December 15^th, 2023, the scope of the e-transport mandate was expanded to include the international transport of all goods. Whilst the change was effective immediately, there is a grace period in place until 1 July 2024, after which, penalties will be imposed.

What are the high fiscal risk products that must be declared in Romania’s e-transport system?

Romania’s National Agency for Fiscal Administration (ANAF) established a list of high fiscal risk products using the same criteria as the e-invoicing system (E-Factura), with a few differences.

The product categories of high fiscal risk products for the e-transport system are:

1. Vegetables, plants, roots and tubers, foodstuffs
2. Edible fruits; peel of citrus fruits or melons
3. Beverages, spirits, and vinegar
4. Salt; sulfur; earths and stones; plaster, lime, and cement
5. Knitted or crocheted garments and clothing accessories
6. Clothing and clothing accessories, other than knitted or crocheted
7. Footwear, gaiters
8. Cast iron, iron, and steel

If the transportation includes both goods with high fiscal risk and goods outside the high fiscal risk category, transportation must be declared in the Romanian e-transport system.

How does the Romanian e-transport system work?

Romania’s e-transport system is operational through the Virtual Private Space (SPV), the tax authority portal used for tax purposes, including the Romanian e-invoicing system. The e-transport system can be used through an API or a free application provided by the Ministry of Finance.

• Taxpayers declare transportation by transmitting an XML file in the e-transport system a maximum of three calendar days before the start of the transport, in advance of the movement of goods from one location to another.
• Following the transmission of the file, the system performs checks (structure, syntax, and semantics), and the Ministry of Finance applies its signature confirming receipt of the declaration.
• The system generates a unique code (ITU code) if the XML file complies with the requirements. This code must accompany the goods in physical or electronic format with the transport document to enable the competent authorities to verify the declaration and the goods while enroute.
• The ITU code is valid for five calendar days, or 15 calendar days in the case of intra-community acquisitions, starting with the date declared when the transport begins. It’s prohibited to use the ITU code once it has expired.

Who is required to report to the e-transport platform in Romania?

The entities required to report transport data in the e-transport platform are as follows:

1. the importer mentioned in the customs import declaration;
2. the exporter mentioned in the customs export declaration;
3. the recipient in Romania, in case of intra-community acquisitions of goods;
4. the supplier in Romania, in case of domestic transactions (high fiscal risk products only) or intra-community supplies of goods;
5. the depositary, in the case of goods subject to intra-community transactions in transit, both for goods unloaded in Romania for storage or to create a new consignment from one or more consignments of goods, and for goods loaded after storage or after the formation of a new consignment on the national territory from one or more consignments of goods.

What information needs to be sent to the RO e-transport system?

The declarant must submit an XML format file following the official schema including the following:

• Data relating to the consignor and the beneficiary
• The name, characteristics, quantities, and value of the goods transported
• Places of loading and unloading
• Details of the means of transport and the carrier

What are the fines for non-compliance with the e-transport system in Romania?

Noncompliance with the e-transport system rules will result in a fine reaching RON 50,000 (approx. €10,000) for individuals and RON 100,000 (approx. €20,000) for legal persons. In addition, the value of undeclared goods will be confiscated.

Concerning the international transport of goods, other than goods falling under the ‘high fiscal risk’ category, fines will only apply from July 2024, after the established grace period ends.

Automating RO e-transport reporting

Stay on top of your obligations with Sovos. Map, clear, correct, confirm and delete outbound eWaybill and much more with our specialist solution.

Lithuania’s VAT Requirements

Lithuania’s SAF-T Mandates Framework

Seeking to modernise and digitize its tax systems, the Lithuanian Customs Office of the State Tax Inspectorate announced sweeping changes to its tax system in 2016 with the introduction of the Standard Audit File for Tax (SAF‑T) and the launch of its online portal, eSaskaita.

Have questions? Get in touch with a Sovos Lithuania SAF-T mandates expert.

SAF-T mandates

Implemented with a phased approach, Lithuania’s SAF‑T mandate became mandatory for all taxpayers in 2020. Whilst there is no periodic SAF‑T reporting, businesses must maintain records for the tax authorities in the event they are requested.

Quick facts on SAF-T mandates

• E-invoices must be accepted provided its integrity and authenticity can be guaranteed from the point of issuance until the end of the storage period.
• If an invoice is in electronic form, data ensuring its integrity and authenticity must be stored by electronic means.
• Suppliers may submit documentation by:
  • Using any certified PEPPOL Access Point with an AS4 Profile
  • Manually keying in the invoice information via an online portal
  • Uploading files in XML format (this requires the economic operator’s accounting system to be suitable for storing e-invoices in this format).

• Service providers to Lithuanian taxable persons not established in an EU Member State must comply with certain additional requirements regarding the outsourcing of e-invoice issuance.
• The i.MAS, Lithuania’s “Intelligent Tax Administration System,” comprises three main parts:
  • i.SAF reporting of sales and purchase invoices on a monthly basis
  • i.VAZ reporting of transport/consignment documents
  • i.SAF-T accounting transaction report, which is only required when requested by the tax authority.
• Full SAF-T files are only submitted upon request of the Lithuanian tax authority.

SAF-T mandates rollout dates

• 1 Oct 2016 – Requirement to submit data on issued and received VAT invoices began
• 2016 -2019 – Phased rollout of SAF‑T requirements to Lithuanian businesses dependant on revenue
• Jan 2020 – All businesses required to comply with SAF‑T mandate
• 2021 – Management and archiving of documents, including invoices, became a licensed activity and must meet certain requirements for integrity, authenticity, security and management to be certified by the Lithuanian Chief Archivist

Infographic

Lithuania’s SAF-T Requirements

Understand more about Lithuania SAF-T including when to comply, submission deadlines, filing requirements and how Sovos can help.

Learn more

How can Sovos help with SAF-T mandates and VAT compliance?

Need help to ensure your business stays compliant with the SAF‑T obligations in Lithuania?

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

Learn how Sovos’ solution for Lithuanian SAF‑T and other VAT compliance changes can help companies stay compliant.

Contact Us Today

E-Invoicing Thailand: New Approach

New regulations for Thailand's e-tax invoicing solutions and receipts expected soon

Thailand’s current e-invoicing legal framework has been in effect since 2012 and follows a post-audit approach.

The Thai Revenue Department and Electronic Transactions Development Agency (ETDA) are working together to improve and further develop the e-tax invoicing system. As a result, new regulations on e-tax invoicing and receipts are expected in the future.

Get in touch with a Sovos Thailand electronic invoicing expert.

Thailand's E-tax invoicing solutions

From 2017, the Thai Revenue Department issued regulations on electronic tax invoices and receipts. Subject to approval, taxpayers can prepare, deliver and keep their e-tax invoices and receipts in electronic format. Read more about e-tax in Thailand here.

Thailand electronic invoicing: facts

• E-invoices must be digitally signed using a certificate issued by a certification authority and approved by the Thai Revenue Department.
• E-invoices must be submitted in XML format to the Revenue Department monthly.
• Outsourcing of e-invoice issuance is allowed provided the third-party service provider is certified by the Thai Revenue Department.

E-tax invoicing rollout dates

• 2012 – E-invoicing permitted
• 2017 – New regulations issued on electronic e-tax and receipts.
• 2020 – EDTA began a certification process for service providers to assess whether applicants’ solutions are secure and compliant.

How can Sovos help with invoicing solutions?

Need help to ensure your business stays compliant with emerging e-invoicing obligations?

Our experts continually monitor, interpret and codify legal changes and requirements into our software solutions, taking care of your indirect tax compliance so you can focus on your core business.

Learn how Sovos’ solutions for continuous transaction controls and VAT compliance obligations can help companies stay compliant.

Contact Us Today

The global trend in the e-invoicing sphere for the past decade has shown that legislators and local tax authorities worldwide are rethinking the invoice creation process. By introducing technologically sophisticated continuous transaction control (CTC) platforms tax authorities get immediate and detailed control over VAT, which has proven a very efficient way to reduce the VAT gap.

However, many common law countries, that don’t have a VAT system, including the United States, Australia and New Zealand, haven’t followed the same path. They have stood out in international comparisons by providing little regulation in the field of e-invoicing. The reason why there is no need to have control over the invoices is the lack of a VAT tax regime. Recent developments, however, indicate that also common law countries try to spur e-invoicing, driven by the business process efficiencies rather than the need for tax control. Accordingly, the upcoming developments will be addressed in this blog, focusing on the Unites States e-invoicing pilot program and the Australian and New Zealand initiatives to promote e-invoicing.

United States

E-invoicing has been permitted for a very long time in the United States but is still not widespread business practice. According to some sources, e-invoicing currently only amounts to 25% of all invoices exchanged in the country. With the introduction of the Business Payments Coalition (BPC) e-invoicing pilot program in cooperation with the Federal Reserve, this may be about to change.

The BPC’s e-Invoice Exchange Market Pilot aims to promote faster B2B communication and provide an opportunity for all kinds of businesses to exchange e-invoices in the US.

The BPC e-Invoice Exchange Market Pilot

The pilot program is a standardised e-invoicing network across which structured e-invoices can be exchanged between counterparties using various interoperable invoicing systems to connect and exchange documents. It’s intended to drive efficiency and productivity while reducing data errors. A federated registry services model enables authorised administrators or registrars to register and onboard participants into the e-invoice exchange framework.

The e-invoice exchange framework operates similarly to the email ecosystem. Users can sign up with an email provider to send and receive emails. The provider serves as an access point to email exchanges for their users and delivers emails between them over the internet. It allows multiple registrars to register participants within the e-invoice exchange framework. This is reminiscent of the globally established PEPPOL model, which standardizes the structure of an invoice as well as provides a framework for interoperability.

Future vision

The US is following the European e-invoicing model based on open interoperability functionality. It enables parties using various invoicing systems to connect and exchange documents through the e-invoicing network easily. The digitization process in the e-invoicing sphere will enable large and small organisations in the US to save resources, promote sustainability and provide business efficiency.

Australia and New Zealand

Similarly, to the US, the move towards e-invoicing in Australia and New Zealand is not primarily driven by tax issues but process efficiency. Neither country has any plans concerning a traditional B2B e-invoicing mandate. However, the New Zealand and Australian governments have committed to a joint approach to e-invoicing, and the first steps are ensuring that all government entities can receive e-invoices.

Australia

In Australia, all commonwealth government agencies must be able to receive PEPPOL e-invoices from 1 July 2022. Moreover, the government also seeks to boost e-invoicing in the B2B space without the traditional mandate for businesses to invoice electronically. Instead, the proposal is to implement what is referred to as Business e-Invoicing Right (BER).

Under the government’s proposal, businesses would have the right to request that their trading parties send an e-invoice over the PEPPOL network instead of traditional paper invoices. Businesses need to set up their systems to be able to receive PEPPOL e-invoices. Once a business has this capability, it would be able to exercise its ‘right’ and request other companies to send them PEPPOL e-invoices.

This reform is expected to be introduced in July 2023, by which businesses will be able to request to receive PEPPOL e-invoices only from large businesses, followed by a staged roll-out to eventually cover all businesses by 1 July 2025.

New Zealand

Following the Australian e-invoicing reform from July 2022 for the B2G sector, the New Zealand Government is encouraging businesses and government agencies to adopt e-invoicing. One step in this direction is the possibility for all central government agencies to be able to receive e-invoices based on PEPPOL BIS Billing 3.0 since 31 March 2022.

Outside of these B2G requirements, there are currently no published plans to move the full economy to mandatory e-invoicing.

To find out more about what we believe the future holds, download Trends 13th Edition.

The Italian government has taken important steps to broaden the scope of its e-invoicing mandate, more specifically by widening the scope of taxpayers subject to electronic invoice issuance and clearance obligations, starting 1 July 2022.

On 13 April 2022, the draft Law-Decree, known as the second part of the National Recovery and Resilience Plan (Decreto Legge PNRR 2 – Piano Nazionale di Ripresa e Resilienza), was approved by the Italian Council of Ministers (Consiglio dei ministri).

The Italian government-approved National Recovery Plan is part of the European Union’s Recovery and Resilience Facility (RRF), an instrument created to assist Member States financially in recovering from the economic and social challenges raised by the Covid-19 pandemic.

The expansion of Italy’s e-invoicing mandate is one element of the government’s anti-tax evasion package and addresses, in particular, the advancement of digital transformation, one of the six pillars of the RRF.

New taxpayers in scope

The draft Law-Decree PNRR 2 expands the obligation to issue and clear electronic invoices through the Italian clearance platform Sistema di Intercambio (SDI) to certain VAT taxpayers exempt from the mandate thus far. This means that from 1 July 2022, the following additional taxpayers are obliged to comply with the Italian e-invoicing mandate:

• Taxpayers who benefit from the flat-rate tax regime (regime forfettario)
• Amateur sports associations and third sector entities with revenue up to EUR 65,000

The regime forfettario is available to taxpayers who fulfil specific requirements, allowing them to adopt a reduced flat-rate VAT regime of 15%, decreased to 5% for new businesses during the first five years. These taxpayers have, up until now, been exempt from the obligation to issue e-invoices and clear them through the SDI, according to Legislative Decree 127 of 5 August 2015.

Additionally, amateur sports associations and third sector entities with revenue up to EUR 65,000 who have also been exempt from the e-invoicing mandate, are included as new subjects. Starting 1 July 2022, e-invoicing will also become mandatory for them.

The mandate still excludes microenterprises with revenues or fees up to EUR 25,000 per year, which instead will be required to issue and clear e-invoices with the SDI starting in 2024.

Short grace period introduced

The draft decree also established a short transitional grace period from 1 July 2022 until 30 September 2022. During this time taxpayers subject to the new mandate are allowed to issue e-invoices within the following month when the transaction was carried out, without being subject to any penalties. This gives the new subjects time to conform to the general rule stating electronic invoices must be issued within 12 days from the transaction date.

What’s next?

The definitive text of the decree has not yet been published in the Italian Official Gazette; only once this final step is taken will the decree formally become law, and the extended scope become binding. The start of the second semester of this year brings additional significant changes in Italy concerning the mandatory reporting of cross-border invoices through FatturaPA, also set to begin on 1 July 2022.

The Philippines continues in constant advance towards implementing its continuous transaction controls (CTC) system, which consists of near real-time reporting of electronically issued invoices and receipts. On 4 April, testing began in the Electronic Invoicing System (EIS), the government’s platform, with six companies selected as pilots for this project.

The initial move toward a CTC system in the Philippines started in 2018 with the introduction of the Tax Reform for Acceleration and Inclusion Act, known as TRAIN law, which has the primary objective of simplifying the country’s tax system by making it more progressive, fair, and efficient. The project for implementing a mandatory nationwide electronic invoicing and reporting system has been developed in close collaboration with the South Korean government, considered a successful model with its comprehensive and seasoned CTC system.

Electronic invoicing and reporting are among many components set forth by the TRAIN law as part of the country’s DX Vision 2030 Digital Transformation Program. With this, the Philippines is making headway toward modernising its tax system.

Introduction of mandatory e-reporting in the Philippines

The Philippines CTC system requires the issuance of invoices (B2B) and receipts (B2C) in electronic form and their near real-time reporting to the Bureau of Internal Revenue (BIR), the national tax authority. The EIS offers different possibilities in terms of submission, meaning that transmission can be done in real-time or near real-time. Documents that must be electronically issued and reported include sales invoices, receipts, and credit/debit notes.

According to the Philippines Tax Code, the following taxpayers are covered by the upcoming mandate:

• Taxpayers engaged in the export of goods and/or services
• Taxpayers engaged in e-commerce
• Taxpayers under the jurisdiction of the Large Taxpayers Service (LTS).

However, taxpayers not covered by the obligation may opt to enroll with the EIS for e-invoice/e-receipt reporting purposes

E-invoices must be issued in JSON (JavaScript Object Notation) format and contain an electronic signature. After issuance, taxpayers can present their invoices and receipts to their customers. The tax authority´s approval is not needed to proceed. However, electronic documents must be transmitted to the EIS platform in real-time or near real-time.

E-archiving requirements

The Philippines introduced somewhat unusual requirements in this period of digitization, when it comes to e-invoice archiving. The preservation period is ten years and consists of a system in which taxpayers are obliged to retain hard copies for the first five years. After this first period, hard copies are no longer required, and exclusive storage of electronic copies in an e-archive is permitted for the remaining five years.

What’s next for taxpayers?

With tests officially underway, the next phase should begin on 1 July 2022, with the go-live for 100 pilot taxpayers selected by the government, including the six initial ones. After that, the government plans to advance a phased roll-out in 2023 for all taxpayers under the system’s scope. Meanwhile, taxpayers can take advantage of this interim period to conform with the Philippines CTC reporting requirements.

Take Action

Need to ensure compliance with the latest e-invoice requirements in the Philippines? Speak to our team.

Luxembourg VAT Requirements

VAT in Luxembourg

Luxembourg is one of many European countries to implement SAF-T and e-invoicing to provide greater visibility into a wide range of business, accounting and tax data.

Luxembourg introduced SAF-T requirements in 2011. In 2019 the country introduced an e-invoicing legislation.

Luxembourg is part of the EU single market economy and falls under the EU VAT regime. The EU issues VAT Directives laying out the principles of how the VAT regime should be adopted by Member States. These Directives take precedent over any local legislation.

VAT law within the country is administered by the Administration de l’Enregistrement et des Domaines and is contained within the General Tax Code.

Get the information you need

Quick facts

• Just like in any other EU Member State, e-invoicing is permitted in Luxembourg, subject to the buyer accepting the exchange of electronic invoices.

• Businesses must ensure integrity of invoice content and authenticity of origin for their invoices.  Integrity and authenticity can be proved using Advanced Electronic Signatures, ‘proper EDI’ with an interchange agreement based on the EC 1994 recommendation, and Business Controls-based Audit Trail.

• In May 2019, Luxembourg adopted legislation about e-invoicing in public procurement following the EU Directive 2014/55/EU. The Directive states that e-invoices will continue to be exchanged voluntarily by suppliers to the government and the centralised PEPPOL access point will continue to be used.

• Prior authorisation is required before outsourcing to a service provider – written authorisation is recommended.

• Invoices stored in electronic form must have evidence of their integrity and authenticity stored electronically as well.

• E-invoices may only be stored in EU Member States (or other countries) of which Luxembourg has signed a mutual tax assistance treaty – prior to notification and access.

• VAT returns may be filed monthly, quarterly or annually electronically through Luxembourg’s online platform (eCDF) via PDF or XML format. Alternatively, annual filings can be made either in electronic format through the portal or via sending a paper copy of the VAT return to the requisite tax office.

• To submit tax returns electronically, taxpayers must ensure the service provider they use is certified within eCDF.

SAF-T reforms

Officially implemented in 2011, Luxembourg’s Standard Audit File for Tax (SAF-T) is locally known as Fichier Audit Informatisé AED (FAIA).

Businesses must, if requested, submit their financial data electronically in a format that is compliant with AED electronic audit file specifications (i.e., in the specified FAIA format). Only resident businesses subject to the Luxembourg Standard Chart of Accounts must file the FAIA.

Mandate rollout dates

2011 – Introduction of SAF-T, known as Fichier Audit Informatisé AED (FAIA)

2019 – Adoption of e-invoicing legislation in public procurement with 2014/55/EU Directive

How Sovos can help

Need help to ensure your business stays compliant with evolving e-invoicing, reporting and SAF-T obligations in Luxembourg?

Keeping up with VAT compliance obligations has become more difficult as Luxembourg continues to take steps to reduce its VAT gap and modernise the system.

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

Learn how Sovos’ solutions for changing SAF-T and VAT obligations can help companies stay compliant.

Contact Us Today

Transition from voluntary to mandatory e-invoicing expected from 1 April 2023

From 1 January 2022, taxpayers have been able to issue structured invoices (e-invoices) using Poland’s National e-Invoicing System (KSeF) on a voluntary basis, meaning electronic and paper forms are still acceptable in parallel. Introduction of the KSeF system is part of the digital transformation happening in Poland following the establishment of continuous transaction control (CTC) mandates all around Europe, supporting faster and more effective identification of tax fraud.

The KSeF system enables taxpayers to issue and receive invoices electronically. It is one of the most technologically advanced tools in Europe for exchanging information on economic events. Structured invoices issued via the system are prepared in accordance with the invoice template developed by the Ministry of Finance. After issuance, the invoices are sent from the financial and accounting system via an interface (API) to the central database (KSeF). Afterwards they are available in the system and can be downloaded by the recipient.

For more information see this overview about e-invoicing in Poland or VAT Compliance in Poland.

Poland’s derogation requests

On 5 August 2021, the Republic of Poland requested authorisation to derogate from Articles 218, 226 and 232 of the VAT Directive to be able to implement an obligation to issue electronic invoices, processed through the National e-Invoicing System (KSeF), for all transactions that require the issuance of an invoice according to Polish VAT legislation.

Subsequently, on 9 February 2022, Poland modified its request, asking for the authorisation to derogate only from Articles 218 and 232 of the VAT Directive and specified that mandatory electronic invoicing would only apply to taxable persons established in the territory of Poland.

Poland considers the introduction of a generalised obligation to issue electronic invoices would bring significant benefits in terms of combating VAT fraud and evasion while simplifying tax collection. Moreover, the implementation of the measure will accelerate the digitalization of the public sector.

 The European Commission derogatory decision

As derived from Article 218 of the VAT Directive, Member States are obliged to accept all documents or messages in paper or electronic form as invoices. Poland strived to obtain a derogation from the above-mentioned Article of the VAT Directive so that only documents in electronic form could be considered as invoices by the Polish tax administration.

Additionally, based on Article 232 of the VAT Directive the use of an electronic invoice is subject to acceptance by the recipient. Therefore, the introduction of an electronic invoicing obligation in Poland requires a derogation from this Article, so that the issuer no longer has to obtain the consent of the recipient to send an invoice in a paperless format. Currently, under Article 106n of the Polish VAT law, the use of electronic invoices requires the approval of the invoice recipient, which hinders the possibility to impose mandatory electronic invoicing.

As announced by the European Commission on 30 March 2022, Poland has been granted the derogatory decision both from the Article 218 and Article 232 of Directive 2006/112/EC. The decision will apply from 1 April 2023 until 31 March 2026, after receiving the last approval from the EU Council. The mandatory phase of the mandate is expected to begin on 1 April 2023.

The KSeF taxpayer application – on the horizon

To allow taxpayers to issue and make electronic invoices available using KSeF, the Polish Ministry of Finance will offer several tools free of charge:

• e-Mikrofirma, an online app accessible via smartphone and a web form to any taxpayer logged on to e-Urząd (e-Office).
• e-Urząd, will provide taxpayers with online tools that will make it easier to meet tax obligations, including paying taxes, through an online electronic payment service.

On 31 March 2022 the Ministry of Finance announced that the test version of the KSeF Taxpayer application will be made available on 7 April 2022. It will enable management of authorisations, issuing and receiving invoices from the KSeF.

Next steps

With the published decision of the European Commission Poland has entered into the next implementing stage of mandatory e-invoicing. The next steps will follow after receiving the approval from the EU Council (which is now a formality and should take place within a few weeks). Subsequently, the Ministry of Finance will implement universal electronic invoicing in Poland giving adequate time for the businesses to adapt to new solutions.

Update: 12 September 2023 by Robson Satiro de Almeida

Tax Reform in Brazil: Simplification Statute Published

Recent developments in Brazil indicate changes on the horizon, as the country continues to move towards a tax reform for simplification of e-invoicing obligations.

A significant reform of ancillary tax obligations is underway aiming to create a unified system for issuing tax documents. The government has long anticipated and discussed this project, but it now shows promise of becoming a reality.

The Brazilian government published Complementary Law no. 199 (Lei Complementar no. 199) in August 2023, establishing the National Statute for the Simplification of Additional Tax Obligations (the Statute). The Statute derives from Draft Law Proposal no. 178/2021 and seeks to streamline ancillary tax obligations, including filing tax returns, keeping accounting records and issuing electronic invoices.

What will change in e-invoicing?

The Statute’s primary change provides the unification of rules for issuing electronic invoices and fulfilling other ancillary obligations. There are currently more than a thousand different electronic invoice formats throughout the country, driving up business maintenance costs and resulting in adversities in company budgets.

Specifically, the Statute establishes integrated action at the Federal, State and Municipal levels to reach the following:

1. Unified issuance of electronic tax documents
2. Use of e-invoicing data to calculate taxes and provide pre-filled tax returns
3. Simplification of tax and contribution payments by consolidating collection documents
4. Centralisation of tax records and their sharing in accordance with legal mandates

How will changes occur?

To achieve unified e-invoice issuance and integration of other ancillary obligations, the government will assess existing systems, legislation, special regimes, exemptions and electronic tax platforms. The next step is to standardise legislation and the respective systems used to fulfil such obligations.

As per the Statute, this integration effort aims to provide benefits such as:

• Cost savings for taxpayers
• Encouraging taxpayer adherence at all federative levels
• Modernising systems and digitalising operations

The Statute also creates the National Committee for the Simplification of Ancillary Tax Obligations (CNSOA) to establish and improve the processes for simplifying tax obligations in line with a definition of a national standard process. However, the Union, States, Federal District and Municipalities may establish additional tax responsibilities related to their respective taxes, if they are aligned with the CNSOA provisions.

What’s next?

After formal composition of the National Committee, the Federal Executive Branch must adopt the necessary measures to allow it to carry out its activities as defined in the Statute. This is essential to start the official move towards national unification of e-invoicing processes and other ancillary obligations.

Additionally, the National Congress will still analyse and vote on certain points of the Statute that the President vetoed, which could result in further alignment or changes within the National Statute for the Simplification of Additional Tax Obligations.

Starting to prepare for eventual changes with e-invoicing in Brazil? Sovos can help.

Update: 21 March 2022 by Kelly Muniz

Brazil is, without doubt, one of the most challenging jurisdictions in the world when it comes to tax legislation. The intricate fiscal system that encompasses rules fromhttps://sovos.com/vat/tax-rules/brazil-e-invoicing/ 27 states and over 5000 municipalities has created a burden on companies, especially for cross-state and cross-municipality transactions.

Furthermore, taxpayers must carefully examine the numerous e-invoicing formats and requirements (and, sometimes, the lack of such). Therefore, hopes for tax reform in Brazil have existed for quite some time.

Simplifying e-invoicing compliance

In recent years, several legislative initiatives towards integrating indirect taxation mandates across the country have not met successful outcomes. Meanwhile, a feasible step into bringing forth such changes may be through the unification of rules on digital compliance with tax obligations, such as VAT e-invoicing and e-reporting.

In late 2021 a draft law proposal (Projeto de Lei Complementar n. 178/2021) was initiated by the private sector. Named the National Statute for the Simplification of Ancillary Fiscal Obligations, it has been welcomed this year by the House of Representatives. Its primary purpose is to introduce a significant reform within digital tax reporting obligations by creating a unified e-invoicing system.

By establishing national fiscal cooperation, the proposal intends to reduce costs with compliance, allow information sharing among tax authorities, and create an incentive for taxpayers’ conformity across all federal, state and municipal levels.

The principal agenda of the draft law proposal is to introduce:

• A unified national standard for e-invoicing
• A unified e-bookkeeping format, the Digital Fiscal Declaration (DFD)
• A pre-filled tax return using e-invoice data
• A unified fiscal registry file and information sharing system (RCU)

What this means for businesses

The most significant change is the introduction of the NFB-e (Nota Fiscal Brasil Eletronica), a national standard for e-invoicing. It entails the unification of the NF-e (Nota Fiscal Eletronica), NFS-e (Nota Fiscal de Servicos Eletronica) and NF-C (Nota Fiscal do Consumidor Eletronica) in one single document. This will cover Brazil’s VAT-like taxes, in this case, ICMS (VAT on products and certain services) and ISS (services VAT).

In practice, this means that instead of complying with numerous e-invoicing formats and mandates, according to the state and municipality of the transaction, one national digital standard will provide uniform country-wide compliance for e-invoicing. The NFB-e will cover invoicing of goods and services on state and municipal levels for B2G, B2B and B2C transactions.

The reform will drastically reduce the burden on taxpayers and expand the scope of e-invoicing to municipalities where such a mandate hasn’t been adopted yet.

It’s essential to add clearance requirements for e-invoicing in Brazil will be maintained, meaning that businesses will still need to comply with rules for real-time clearance of invoices with the tax authority.

What’s next?

The draft law proposal is still in early discussions and will follow to the Justice and Citizenship Constitutional Commission (CCJC) for approval and possible amendments before voting by Congress. Until then, compliance with e-invoicing rules across Brazil remains at its current challenging status.

Slovakia E-invoicing

The modernisation of tax and tax controls remains a high priority for Slovakia’s tax authority. The Slovakian Ministry of Finance plans to introduce a continuous transaction control (CTC) scheme aligned with ViDA to improve the fight against tax evasion and obtain real-time information about underlying business transactions.

Plenty is happening in Slovakia where e-invoicing is concerned, and this page is your ideal overview of the country’s journey towards obligatory electronic invoicing.

Table of contents

1. B2B e-invoicing in Slovakia 2. B2G e-invoicing in Slovakia 3. The use of Peppol in Slovakia 4. Timeline of e-invoicing adoption in Slovakia 5. Setting up e-invoicing in Slovakia with Sovos 6. FAQ 7. Additional resources

B2B e-invoicing in Slovakia

Slovakia has proposed to implement mandatory e-invoicing for B2B transactions from 2027.

The proposal would require taxpayers to issue and receive electronic invoices for domestic, business-to-business transactions. This mandate would use Peppol—the pan-European e-invoicing initiative used by many countries—to facilitate the exchange of e-invoices.

The idea behind implementing Peppol is to enable multiple certified e-invoicing providers to participate, creating a decentralised system.

In addition to mandating the exchange of electronic invoices, the proposal includes real-time reporting of invoice data to the country’s financial administration.

B2G e-invoicing in Slovakia

Slovakia currently requires central, regional and local authorities to be able to receive and process electronic invoices. This has been enforced since 1 August 2019.

E-invoicing is still not fully implemented for business-to-government transactions. However, it is expected that the new CTC regime will cover both B2B and B2G e-invoices.

The use of Peppol in Slovakia

Slovakia’s Financial Administration plans to introduce a mandate for B2B e-invoicing, utilising Peppol’s infrastructure and framework to facilitate document transmission.

The plan of having a decentralised e-invoicing system would allow businesses to exchange e-invoices uniformly and securely and therefore improving operational efficiency.

Also, by joining the Peppol network, the government would allow businesses currently offering e-invoicing solutions in the Slovakia to become Peppol-certified providers, fostering healthy market competition. Slovakia’s Financial Administration will serve as the nation’s Peppol Authority.

Timeline of e-invoicing adoption in Slovakia

Here are the key dates in Slovakia’s journey towards adopting e-invoicing:

• 19 December 2024: The Ministry of Finance unveils a proposal regarding mandatory e-invoicing and real-time reporting of invoice data to the Financial Administration
• 1 January 2027: The proposed date of the country’s B2B e-invoicing mandate
• 1 January 2027: The proposed date of the country’s requirement to report domestic transactions to the tax authorities in real time
• 1 July 2030: Meeting the requirement from the EU’s ViDA initiative to implement reporting of intra-community transactions
• 1 July, 2030: Slovakian VAT-registered businesses must comply with VAT in the Digital Age (ViDA) requirements, which include mandatory e-invoicing and digital reporting for Intra-Community B2B transactions.

Setting up e-invoicing in Slovakia with Sovos

With Slovakia well on its way to introducing mandates for e-invoicing, it’s important to be ahead of the curve to ensure compliance. However, an evolving e-invoicing landscape isn’t unique to Slovakia.

Chances are that most countries you do business in are undergoing a similar digital transformation. Sovos is a single solutions supplier to ensure your organisation complies with its tax obligations – everywhere you operate.

Choosing Sovos means choosing peace of mind and reclaiming your time.

Get in touch with us

FAQ

Is e-invoicing mandatory in Slovakia?

It is only mandatory for central, regional and local authorities to be able to receive and process e-invoices. Outside of that, Slovakia has no mandate in place for electronic invoicing.

What type of Continuous Transaction Controls system is planned in Slovakia?

Slovakia is expected to introduce mandatory e-invoicing combined with real-time reporting of invoices to the tax authority.

Is Peppol mandatory in Slovakia?

Currently, the use of Peppol to exchange e-invoices is not mandatory. However, according to the upcoming CTC reform, the Peppol network is planned to be mandatory for the exchange of e-invoices between businesses.

Additional resources

IPT in Slovakia

Ensure you’re aware of all your tax obligations with this blog.

Read here

E-invoicing: Your Guide

Learn about the global rise of electronic invoicing.

Read here

In the European Union, the VAT rules around supplies of goods, as well as ’traditional’ two-party supplies of services, are well-defined and established. Peer-to-peer services facilitated by a platform, however, do not always fit neatly into the categories set out under the EU VAT Directive (Council Directive 2006/112/EC). There are ambiguities around both the nature of the service provided by the platform operator, and the status, for tax purposes, of the individual service provider (i.e., a driver for a ride-sharing service, or an individual offering their property for rent on an online marketplace). This creates a unique challenge for VAT policymakers.

The EU Commission has recently opened a public consultation on VAT and the platform economy to address these issues. We have previously discussed other initiatives proposed by the Commission including a single EU VAT registration and VAT reporting and e-invoicing. This blog will discuss the underlying challenges policymakers face and the specific proposals set out in the consultation, which could significantly impact digital platform operators and users.

Digital platforms and existing VAT law

A threshold question for the VAT treatment of digital platforms is whether the platform merely connects individual sellers with individual customers – i.e., acts as an intermediary – or whether it actively provides a separate service to the customer. This question is significant because services rendered to a non-taxable person by an intermediary, under Article 46 of the VAT Directive, are sourced to the location of the underlying transaction.

In contrast, services provided to a non-taxable person under a taxpayer’s name are sourced either to the supplier’s location or, in certain circumstances, to the customer’s location. Whether a particular platform is acting as an intermediary can be very fact-specific and can depend, for example, on the level of control exercised by the platform over pricing or user conduct.

To further muddy the waters, there are potential ambiguities for VAT involving:

1. Whether platform operators act as disclosed or undisclosed agents of individual sellers, or
2. Whether services of platform operators, to the extent they are not intermediary services, are electronically supplied, and thus sourced to the customer’s location.

A final source of ambiguity is whether an individual service provider qualifies as a taxable person when making only occasional supplies; this could raise the question of whether said supplies would attract VAT.

These ambiguities present an obvious challenge to the consistent VAT treatment of platforms across the Member States.

Proposed solutions

As part of its public consultation on “VAT in the Digital Age”, the EU Commission has proposed several solutions to the challenges listed above. Of these, three proposals directly address the ambiguous nature of services provided via platforms:

1. An EU-wide “clarification” of the nature of the services provided by platform operators
2. A rebuttable presumption for the status of service providers who use platforms
3. A “deemed supplier regime” for digital platforms – similar to what exists now for platforms that facilitate supplies of goods

These proposals aim to provide clear guidelines to Member States on how platform services should be categorised, and, therefore, which VAT rules should apply under the Directive. Perhaps the most direct is the “deemed supplier” proposal, which would attach VAT liability to platform operators under defined circumstances.

A “deemed supplier regime” already exists for platforms that facilitate sales of low-value goods in the EU, so it is likely the Commission will seriously consider this option. Notably, the public consultation solicited comments on three different permutations of the deemed supplier regime, differing only in the scope of services covered.

Whichever direction the EU ultimately goes in, it is clear that a significant change is on the horizon for digital platforms. Platform operators and platform users should pay close attention to these ongoing consultations in the coming months.

Update: 05 January 2023 by Andres Landerretche

More taxpayers join the Electronic Invoicing System of Paraguay (SIFEN)

Since Paraguay started implementing its National Integrated System of Electronic Invoicing (SIFEN) plan in 2017, the Undersecretary of State for Taxation of Paraguay (SET) has carried out the process.

The different phases are:

1. Pilot plan
2. Voluntary phase
3. Mandatory implementation

Due to the arrival of SET resolution 105/21, numerous companies have been voluntarily incorporated into the system. This is to prepare for mandatory electronic invoicing in 2023. SET resolution 105/21 provides measures for the issuance of electronic tax documents and an implementation calendar for 10 groups of taxpayers.

More than 80 million electronic documents have been issued since the system started operating. With resolution 105/2021 coming into force, it is expected that over 5,000 taxpayers must issue their receipts electronically by 2023.

How the SIFEN Works

The SIFEN is oriented towards large and medium-sized invoice issuers, whether they join voluntarily or are mandatorily designated by the Sub-Secretary of State for Taxation (SET).

The system contemplates two moments in its operation flow:

1. Commercial operation with electronic documents
2. Transmission of electronic documents to the SET

In the first moment, because of the commercial operation, the obliged taxpayer issues the digitally signed electronic document and sends it to the buyer or receiver in XML format. The issuer must make available a graphic representation of the document (KuDE) that supports the transaction in a physical or digital format if the buyer or recipient is not operating under the SIFEN.

The second moment comprises taxpayers’ transmission of the digitally signed XML document to the SET for its approval process.

SIFEN’s operating model is deferred, meaning that the issuer of an electronic invoice must transmit the electronic documents in an XML file for their respective validation. This needs completing within 72 hours of the electronic document’s signature – any later and it will be considered as extemporaneous transmission and subject to penalties.

Electronic documents acquire the nature of Electronic Tax Documents (DTE) with legal validity and tax incidence once signed and authorised by the Tax Administration by means of an approval transaction number.

Mandatory and Voluntary Adoption

Resolution 105/2021 expands the list of those required to advance with the mass use of electronic invoicing, establishing the dates from which 10 groups of taxpayers must electronically issue all tax documents.

In accordance with the calendar established by the resolution, the companies participating in the pilot phase and voluntary adhesion became mandatory for electronic invoicing as of 1 July 2022.

The other taxpayers made up of groups 3 to 10 must implement electronic invoicing according to the schedule that begins with group 3 on January 2 January 2023, and ends with Group 10 on 1 October 2024.

More information on the taxpayer groups is available on the SIFEN web portal.

Voluntary adoption is possible for all taxpayers who wish to issue invoices electronically via the SIFEN. The minimum requirements are for companies to use software that integrates with the SIFEN and holds a valid Digital Signature certification.

Still have questions about Paraguay e-invoicing? Speak to our team of experts.

Update: 25 March 2022 by Victor Duarte

Paraguay’s New E-invoicing System to Gradually Become Mandatory From July 2022

The electronic invoicing system in Paraguay has been in development since 2017 according to the plan carried out by the Undersecretary of State for Taxation (SET) to modernise and improve tax collection and minimise the incidence of tax fraud.

The introduction of the Integrated National Electronic Invoicing System (Es. Sistema Integrado de Facturación Electrónica Nacional -SIFEN –) meant the introduction of a new e-invoicing regime in the country. The adoption of this new system is currently in its voluntary adhesion phase, which began in 2019, and has allowed entrepreneurs, merchants, and companies to issue e-invoices optionally. However, from July 2022, the use of the system will gradually become mandatory for certain taxable persons.

Electronic Tax Document types

Taxpayers in Paraguay can use the SIFEN to issue Electronic Tax Documents (Es. Documento Tributario Electrónico – DTE). The DTE is a digital version of the invoice and other traditional documents, which has tax and legal validity. The DTE has become a modern, effective, secure and transparent form to issue and manage e-invoices for distinct types of business operations.

The DTEs are validated upon issuance by the SAT to support the VAT deductions and transactions related to income tax. Among the distinct types of DTE in Paraguay, we find:

• Electronic sales documents:
  • Electronic invoice
  • Export electronic invoice
  • Import electronic invoice
• Complementary electronic documents:
  • Electronic self-invoicing
  • Electronic debit note
  • Electronic credit note

The DTE issuance process

The e-invoices issued by the taxable persons that have adhered to the SIFEN are generated in XML format. The authenticity and integrity of each document are guaranteed through the digital signature and the control code that DTEs include. Each document must be sent electronically to the tax administration for its clearance.

The SIFEN is responsible for verifying and validating each document. Once it is established that the DTE meets all the requirements, it becomes a legal e-invoice. The taxable persons issuing the e-invoice then receive the verification results through the web service system.

After the e-invoice is cleared, suppliers can send the DTE to their buyers via email, data messaging or other means.

Paraguay E-invoicing mandate roll-out

The Paraguayan Undersecretary of State for Taxation recently published a General Resolution providing administrative measures for the issuance of DTEs. This resolution also established a phased schedule of implementation, in which certain taxable persons will be required to issue e-invoices and other DTEs using the SIFEN.

The implementation schedule consists of ten stages starting on 1 July 2022 with all taxpayers who joined the pilot program to adopt the SIFEN. From January 2023, the mandate will include more taxpayers. However, it is not yet defined which companies will start in that stage. The SET aims to cover all taxpayers carrying out economic activities in the country by October 2024.

What’s next

Companies in Paraguay must get ready to issue e-invoices under the requirements of the SIFEN. From 1 July 2022, all companies in the country will be able to use this system voluntarily. The list of taxpayers required to comply with the mandate will be available on the SIFEN website and on the SET website (www.set.gov.py). The SET will notify affected taxpayers via the Paraguayan Tax Mailbox known as “Marandu.”

Governments throughout the world are introducing continuous transaction control (CTC) systems to improve and strengthen VAT collection while combating tax evasion. Romania, with the largest VAT gap in the EU (34.9% in 2019), is one of the countries moving the fastest when it comes to introducing CTCs. In December 2021 the country announced mandatory usage of the RO e-Factura system for high-fiscal risk products in B2B transactions starting from 1 July 2022, and already now they are taking the next step.

For more information in general see this overview about e-invoicing in Romania or see this overview on VAT Compliance in Romania.

RO e-Transport system

The Ministry of Finance recently published a draft Emergency Ordinance (Ordinance)  introducing a mandatory e-transport system for monitoring certain goods on the national territory starting from 1 July 2022. The RO e-Transport system will be interconnected with existing IT systems at the level of the Ministry of Finance, the National Agency for Fiscal Administration (ANAF) or the Romanian Customs Authority.

According to the draft Ordinance, the transportation of high-fiscal risk products will be declared in the e-transport system a maximum of three calendar days before the start of the transport, in advance of the movement of goods from one location to another.

The declaration will include the following:

• Data relating to the consignor and the beneficiary
• The name, characteristics, quantities, and value of the goods transported
• Places of loading and unloading
• Details of the means of transport

The system will generate a unique code (ITU code) following the declaration. This code must accompany the goods that are being transported, in physical or electronic format with the transport document. Competent authorities will verify the declaration and the goods on the transport routes.

The first question that comes to mind is what the definition of high-fiscal risk products is. The Romanian Ministry of Finance had already established a list of high-fiscal risk products for mandatory usage of the RO e-Factura system. However, it is still unknown if the high-fiscal risk product list will be the same. The Ministry of Finance will establish a subsequent order defining the high-fiscal risk products in the coming days.

If the transportation includes both goods with high-fiscal risk and other goods that are not in the category of high-fiscal risk, the whole transportation must be declared in the RO e-Transport system.

Which transportations are in scope?

The RO e-Transport system is established to monitor the transportation of high-risk goods on the national territory.

This includes the following:

• Intra-community acquisitions
• Intra-community deliveries
• Imports and exports
• Domestic transportation between different economic operators
• Domestic transportation between two locations belonging to the same economic operator
• Transport of goods that are subject to intra-community transactions in transit through Romania

The carriage of goods intended for diplomatic missions, consular posts, international organisations, the armed forces of foreign NATO Member States or as a result of the execution of contracts, are not in the scope of the RO e-Transport system.

What happens next?

The draft Ordinance is expected to be published in the official gazette in the coming days. Following the publication, the Ministry of Finance will establish subsequent orders to define the categories of road vehicles and the list of high-fiscal risk products for the RO e-Transport system. Moreover, as of 1 July 2022, using the RO e-Transport system will become mandatory for transporting high-fiscal risk products.

Noncompliance with the rules relating to the e-Transport system will result in a fine reaching LEI 50,000 (approx. EUR 10,000) for individuals and LEI 100,000 (approx. EUR 20,000) for legal persons. In addition, the value of undeclared goods will be confiscated.

Vietnam’s VAT Requirements

VAT in Vietnam

Over the last 10 years, the Vietnamese government has worked on developing a solution to tackle the country’s VAT fraud and the VAT gap, introducing an e-invoicing mandate for all companies doing business in Vietnam from 1 July 2022.

Get the information you need

Reforms

The Vietnam e-invoicing mandate was initially slated to be in force by July 2020, but ultimately was delayed. In October 2020, a new timeline was laid out through Decree 123 announcing implementation dates for the new e-invoicing mandate rules that were originally envisaged in the Law on Tax Administration.

An initial rollout will begin from March 2022 to a select number of provinces and cities. The country’s new e-invoicing requirements will come into effect nationwide on 1 July 2022.

Quick facts

• Applicable taxpayers in Vietnam will be required to issue e-invoices for their transactions from 1 July 2022.
• Legal framework must be followed for all e-invoice submissions.
• Enterprises, organisations (economic or otherwise), business households and individuals must register with the local tax administration to start using e-invoicing.
• There are two types of e-invoicing processes in Vietnam. Authenticated invoices are granted an authentication code by the tax authority before the invoice is transmitted to the buyer, whereas unauthenticated e-invoices do not require the tax authority’s authentication code.

• Electronic invoices must be issued in XML format.
• VAT, sales invoices, and the invoices used for selling public assets are among the documents under the scope of the e-invoicing mandate.
• Ensuring of the integrity and authenticity of the e-invoices is required and must be digitally signed by the supplier.
• E-invoices must be archived electronically and taxable persons may choose archiving methods guaranteeing security and integrity and authenticity during the entirety of the archiving period.
• Service providers meeting specific requirements can provide the contracting parties with e-invoicing solutions.

Mandate rollout dates

• March 2022 – Vietnam General Taxation Department (GTD) will first work with six local tax administrations: Ho Chi Minh City, Hanoi, Binh Dinh, Quang Ning, Hai Phong and Phu Tho to start implementing technical solutions for new e-invoicing requirements and construction of an IT system for connection, data transmission, reception and storage of data.
• April 2022 – E-invoicing system will be rolled out to the remaining provinces and cities.
• 1 July 2022 – All cities and provinces must deploy the e-invoicing system based on the rules established in Decree 123 and the Circular that provides guidance and clarification to certain aspects of the new e-invoicing system.

How can Sovos help?

Need help to ensure your business stays compliant with evolving e-invoicing requirements?

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

Learn how Sovos’ solutions for continuous transaction controls and VAT compliance obligations can help your company stay compliant.

Contact Us Today