Newsroom, VAT | 30. November 2022

Spain introduces the e-invoicing process

Trend towards e-invoicing in the EU also continues in Spain by

ESP Digitalisation boosts economy
ESP Digitalisation boosts economy

Spain’s legislature has passed a new law to encourage business creation and development. However, it is not just a tax law, but a law that aims to strengthen Spanish companies and individual sectors.

What do the measures pay for?

  • Accelerate business start-ups
  • Simplification of regulations, mainly concerning business development and activities
  • Better promotion and financing possibilities

One of the measures adopted with this new law is the mandatory use of e-invoicing. This is an essential step for Spain, especially since the previous e-invoicing was voluntary – except in exceptional cases in the B2G sector.

The new law stipulates that in the B2B sector, companies, and freelancers switch to electronic invoices in their business relations. This means that e-invoices must henceforth be issued, sent and also received.

Further guidance expected

How exactly these measures are to be implemented remains to be seen: the publication of the corresponding implementing regulation, which is expected soon, is to contain further guidance for the new invoicing procedure.

This regulation is also significant because it starts the period for the e-invoicing obligation to come into force – for companies such as freelancers whose annual turnover breaks the EUR 8 million mark, this regulation will apply one year after the announcement of the law. For all other companies and freelancers, it comes into force 24 months after publication.

The regulation is eagerly awaited because there is a lively debate in Spain about what can be accepted as an e-invoice. In particular, whether a PDF document is seen as an e-invoice is the subject of controversial discussions in the media.

Only a few years ago, Spain abolished the mandatory rule that required invoices to be in a specific format to be considered electronic.

Impact on technology companies

Regarding e-invoicing at technology companies such as platform operators, the law stipulates that they must ensure system-independent compatibility: Users should be able to read, copy, download, or print their e-invoices at any time without problems. They must also be able to connect to the systems of the Spanish tax authorities. They are also required to ensure that the integrity, storage, accessibility, legibility, traceability, and immutability of invoice records are guaranteed.

Especially, companies that offer invoicing services expect an enormous additional effort to comply with and adapt to these new regulations.

In short, it is conceivable to oblige companies during the new regulation to issue e-invoices without invoice-issuing software. The authenticity of the document must be guaranteed.

Considerations of the EU

For now, it remains to be seen what this implementation order will look like. In Spain, this is eagerly awaited by the trade. Another question is how e-invoice fits into the European Commission’s proposal on VAT in the digital age. For companies, it is crucial to what extent the regional regulations favour a division of the markets, if any. Therefore, harmonisation or consensus at the EU level will inevitably be essential.

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