Who is required to issue e-invoices?
In this article we explain what the Create and Grow Act consists of: its new requirements and entry into force.
The Spanish 18/2022 Act of 28th September 2022 on the creation and growth of companies (known as the Create and Grow Act) introduces, among other measures, new requirements such as mandatory e-invoicing for all transactions between businesses.
According to the statement of legal grounds for the act, the objective of introducing the use of e-invoices in transactions between businesses (B2B) is to:
- Digitalise business relations.
- Reduce transaction costs.
Encourage transparency in trade and combat late payments in commercial transactions.
When will e-invoicing become mandatory?
Regarding mandatory e-invoicing, the Create and Grow Act will enter into force as follows:
- For businesses with an annual turnover in excess of €8 million, within one year of the act’s implementing regulations entering into force.
- For all other businesses, the transition period will be two years from the approval of said implementing regulations.
A Draft Royal Decree to implement the Create and Grow Act with regard to e-invoicing between businesses was announced by the Spanish Council of State on 30th June 2023 and is currently pending approval by the Spanish cabinet and its publication in the Official State Gazette.
Important points to be taken into consideration:
The obligation of businesses and professionals to issue and deliver an e-invoice for their B2B transactions with regard to which they are required to issue an invoice pursuant to the invoicing regulations. The e-invoices, which must be signed by the issuer using an advanced e-signature, will be identified via a unique code that will comprise the issuer’s tax identification number, the invoice number and series and the issue date.
The public e-invoicing system will comprise the following:
- all private platforms for exchanging e-invoices that comply with the requirements of the Royal Decree;
- the public e-invoicing solution that will be managed by the Spanish tax authority (AEAT).
The public e-invoicing solution (SEFE) will also be the archive for all e-invoices issued, including for invoices that have been issued and received through private platforms.
The obligation is established to report certain invoice statuses, such as the commercial acceptance or refusal of the invoice, which must be dated, and payment. This must take place within four calendar days, excluding weekends and national holidays.
To ensure the interconnection and interoperability of the different invoicing systems, they will be restricted to authorised syntaxes: XML, UBL, EDIFACT and Facturae.
The receivers of e-invoices may not force the issuer to use a predetermined e-invoicing services provider, platform or solution.
The B2B e-invoice will not affect Immediate Information Supply, known in Spain as SII, which means that companies must comply with their e-invoicing obligations or remain in the SII system.
Use of the e-invoice will be limited to clients and suppliers located in Spain or that are VAT registered in Spain.
Company adaptation process.
Until approval and entry into force of the Royal Decree that implements the Create and Grow Act, companies will have a period to prepare and adapt to this regulatory change.
While the details of the Royal Decree are still unknown, it has been announced that there will be several government-approved platforms. These will have to be interconnected so they can work together to facilitate invoice exchanges between clients and suppliers regardless of the platform that each of them chooses to use. Before the upcoming entry into force of the regulations on e-invoicing between companies, it is a good idea to prepare your new invoicing system to be able to adapt to the new legal requirements and avoid the fines established in the new system.
Regarding regional tax authorities.
TicketBAI is a common project between the Basque Country’s three regional tax authorities to fight against tax fraud by monitoring all invoices and receipts issued in the Basque Country.
TicketBAI is applicable to natural and legal persons with their tax residence in the Basque Country that are required to self-assess their personal or corporate income tax.
This system requires companies to use certified digital invoicing systems and to submit their invoice files to the government in accordance with specific requirements. The new system where invoices must be digitally signed prevents these invoices from being manipulated or deleted.
Other approved e-invoicing measures.
In the European Union, the European Commission has published an action plan called VAT in the Digital Age (VIDA), which comprises a set of measures designed to adapt to the current legislative framework surrounding Value Added Tax based on the new economic and digital reality. Like with the Spanish project, the European project is aimed at making a structured e-invoicing format generally applicable to transaction documentation.
The key aim of this proposal is to ensure the European single market operates correctly and to combat tax fraud within the union.
The VIDA plan is also aimed at ensuring that traditional and digital operators are treated equally, in addition to establishing new simplifications designed to lower compliance costs for companies.
Financial assistance to adapt to e-invoicing: Kit Digital Kit Digital is an initiative by the Spanish government for the purpose of subsidising the implementation of the digital solutions available on the market to make significant progress regarding the level of digital maturity.
