Delays on technical specifications and election results means mandatory B2B e-invoicing delays. Likely January 2025
Spain’s plans for launching a mandatory B2B e-invoicing regime in July 2024 have been set back as detailed technical specifications are still not available. Under the draft regulations, Spain is committed to give at least 12 months notice from passing the final law. And whilst infrastructure providers have been told to prepare for a 1 October 2024 launch, the added complication of last month’s inconclusive general election means that a launch before 1 January 2025 is unlikely to be practical. Spain will still likely to follow a two-phased approach, initially with large taxpayers (turnover above €8million). Then followed by all other taxpayers 12 months later.
Jun 2023: Spain publishes draft e-invoicing regime: decentralised CTC with public portal or certified third-party agent submissions
Spain’s State Tax Administration Agency (Agency Estatal de Administracion Tributaria) has updated the draft Royal Decree for its proposed VAT e-invoicing regime applicable on B2B transactions – companies and self-employed entrepreneurs. There are very limited specifications for the format of e-invoices included.
The Agency is inviting feedback on the draft regulations by 10 July 2023.
Spain has opted for a decentralised Continuous Transaction Control model with the following file options: UBL; Facturae; CII; or EDIFACT. It will be supported with both a public electronic invoicing solution which is the invoice repository with the alternative of private e-invoice exchange platforms operated by approved agents.
These regulations will only come into force 12 months after being published in the Official State Gazette. This means that the previous July 2024 launch plan is now unlikely to be met especially since there are no detailed technical speficiations. This is further complicated by Spain needing to secure permission from the European Commission to impose mandatory e-invoicing – although this should be a formality.
The plan is for two-phases :
- 12 months after Gazette of final regulations: large tax payers (turnover above €8 million); and
- 24 months after Gazette of final regulations: all other taxpayers.
This new publication includes the technical and information requirements to be included in the electronic invoice in order to verify the payment date and obtain the average payment periods, the minimum interoperability requirements between providers of technological solutions for electronic invoices, and the requirements for security, control and standardization of the devices and approved IT or ERP systems that generate e-invoices.
E-invoices may be submitted via:
- the Spanish Tax Administration Agency exchange platform with the Facturae syntax with basic authentication and identification. It is only at the point the customer accesses the invoice that the billing process is completed.
- A free app for smaller taxpayers to create and submit e-invoices
- privately-operated certified e-invoicing agents;
- a mix of the above.
The Spanish regime will be based on the EU e-invoice Directive, around the EN 16931 structured e-invoice semantic. This in accordance with the EU VAT in the Digital Age proposals by the EU. The tax authorities reserve the right to add further data requirements, including payment details. Parties involved in e-invoice transactions may also agree to added their own additional information requirements.
It may be provided by any one of the following:
- CII XML message of the CEFACT/ONU of invoice applicable to the whole industry as specified in the XML schemes 16B (SCRDM- CII).
- UBL invoice and credit note messages as defined in ISO/ IEC 19845:2015
- EDIFACT invoice message in accordance with the ISO 9735 standard
- Facturae message, in the version for invoicing between businessmen and professionals in force at all times.
Role of private e-invoicing agents
To ensure operability between all the above, private operators must have the the capacity to transform the invoice message between all the supported formats, guaranteeing the preservation of the authenticity of its origin and the integrity of
invoice content. Agents must be willing to connect to each others reporting platforms upon request. The government will approve the agents based on interoperability, digital security and continuity planning criteria.
The private operator is responsible for attaching a unique digital signature to the invoice prior to forwarding to the customer AND the tax authorities. This will contain:
- the tax identification number of the issuer;
- the number and series of the invoice; and
- the date of issue of the invoice.
The regulations exempt a number of types of transaction:
- Simplified invoices
- Where no statutory requirement to invoice
- Non-residents either customer or supplier
Recipients of e-invoices must keep the issuer informed of the status of any invoice. The different stages include:
- Commercial acceptance or rejection
- Payment status and date
- Partial payments
- Assignment of invoice to 3rd party
The above information must be provided to the receipant within 4 working days of receiving the e-invoice.
Sept 2022 – law approved for mandatory e-invoicing
Spain’s lower House of Parliament, the Congress of Spain, has ratified a technical specification Bill launching mandatory B2B e-invoices, with government pre-clearance with AEAT, the state tax agency. It was Gazetted 29 September 2022. The government now has six months to issue technical specifications and regulations.
This would only apply to resident Spanish businesses with a fixed establishment from mid-2024. B2G e-invoicing is already mandated in Spain where invoices to public bodies are above €5,000.
An invoice QR code requirement has been added. The obligation will start first for large taxpayers from July 2024 (TBC). All other businesses would be mandated early 2026.
EU VAT in the Digital Age reforms include a channel for harmonised Digital Reporting Requirements (DRR) and Continuous Transaction Controls (CTC) by EU states. This will impose mandatory e-invoicing for EU intra-community transactions from 2028.
Spain’s SII live invoice reporting regime was introduced in July 2017. This new e-invoicing regime may not replace SII since it is not part of the VAT or invoicing laws. Instead, it is being introduced to existing 2007 legislation around “promotion of the society of digital information).
2024-26 two-phase roll out of B2B e-invoices
The rollout will likely be as follows:
- July 2024 large tax payers (turnover above €8 million); and
- 2026 all other taxpayers.
It is likely that any possible government mandated plan would be based on the pre-clearance model, and be supported by the Digital Toolkit for small businesses. A public consultation is now being launched.
Spain has already indicated that it will require QR Codes included to help digitally track invoices. The Royal Decree plans a legal requirement for software developers and retailers to ensure their accounting and similar systems are able to comply with the new e-invoicing requirements and are able to transmit prescribed data to the tax authorities.
E-invoicing to fight VAT Gap
The proposal to extend mandatory e-invoices to all businesses and non-incorporated businesses for business-to-business transactions aims to improve the efficiency of business operations but also to help fight VAT fraud. The European Commission’s VAT Gap estimates that Spain lost €6.8 billion in expected Value Added Tax revenues.
Italy’s SdI e-invoice regime has shown remarkable success in closing its VAT Gap by almost 10% in just one year. France and Poland are to follow with 2023 being a big year for European e-invoice initiatives. The EU e-invoice consultation is well underway.