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Spain Mandates B2B e-Invoicing

January 9, 2023

Spain has formally authorized the implementation of mandatory B2B e-invoicing in July 2024. What does this imply for your company? Here is an overview of the new digital invoicing system and the tax authorities' requirements for all businesses prior to the implementation date.

 

Spain has legally mandated electronic invoicing between firms. The e-invoicing rule will be fully implemented by July 2024 for big taxpayers (those with a revenue greater than €8 million). This is contingent on the completion of the "regulatory development" phase, which started in September 2022 and attempts to provide all the necessary technical specifications for the next mandate.

 

Therefore, the implementation of mandatory e-invoicing will be phased in based on the turnover of taxpayers and the timing of regulatory development approval. By the end of 2022, all taxpayers with a revenue greater than €8 million will be legally required to implement e-invoicing.

 

In the meantime, companies must prepare for the impending transition and comprehend how it will affect their operations. How to get complete compliance before it's too late Companies must begin to familiarize themselves with e-invoicing and all of the processes involved in the transition, as well as understand how it will affect their operations and systems.

 

A Concise Timetable for Mandated B2B Electronic Invoicing

 

September 2015: Electronic invoicing is mandated for the public sector. 

July 2024: E-invoicing becomes mandatory for big taxpayers with an annual turnover of more than €8 million. 

January 2026: small and micro-enterprises and sole proprietors with less than €8 million in total invoiced revenue

 

The Spanish Law for the Formation and Expansion of Businesses

 

The newly granted mandate comes under Spain's Crea y Crece, or Law for the Creation and Growth of Companies. The law mandates that all businesses issue, transmit, and receive electronic invoices for all transactions with other businesses. It is projected that the implementation process will run until 2026.

 

Why is Spain Adopting B2B Electronic Invoicing?

 

Since 2015, all business-to-government (B2G) transactions in Spain have been performed online. With the newly permitted requirement, Spain seeks to push all businesses toward a similar model to ensure that all VAT-paying businesses and individuals may issue and receive electronic invoices.

 

Therefore, why migrate to a digitized business transaction process?

 

First, Spain has joined other EU members, such as Italy, France, Poland, and Albania, in making electronic invoicing mandatory. The B2B e-invoicing initiative is part of Spain's Recovery, Transformation, and Resilience Plan, which seeks to promote the development and expansion of enterprises. Digitalizing the invoicing system would help businesses grow in Spain by lowering the cost of starting a new business from €3,000 to €1.

 

Therefore, with the new adoption, Spanish businesses have more control over their billing, less tax evasion, and significantly increased productivity, if adopted and handled with care. Also, process automation gets rid of mistakes made by people and makes it easier for businesses and freelancers to manage payments and keep track of them.

 

The B2B sector must establish a similar structure for charging other businesses or independent contractors, despite the fact that this is currently standard practice in the public sector. Nevertheless, these electronic invoices must adhere to certain technical standards.

 

A limited number of electronic invoicing systems have been allowed for use by Spanish VAT-paying businesses by the Spanish tax authorities. Any commercial product that does not comply with the new requirements must agree to do so. This thorough procedure entails submitting invoices to the Agencia Tributaria. The system in question will be referred to as a "verifiable invoicing system" or "VERI FACTU system" after it has been examined and found compliant.

 

B2B E-invoicing Standards for Businesses and Independent Contractors

 

In the draft phase, the entire technical requirements are still under consideration and are subject to change. Until further notice, businesses and independent contractors must continue to:

 

Send electronic invoices for all business-to-business transactions, including those with independent contractors.

Facilitate simple access to e-invoices, including the downloading, viewing, and printing of e-invoices by receivers.

Regardless of whether recipients are current customers, retain and provide access to e-invoices for six years.

 

Are you interested in learning more about the VAT treatment in Spain?

 

Would you like your firm to be fully compliant with the forthcoming mandate? Contact our specialists, and you can be confident that you are up-to-date on the most recent VAT changes in Spain.

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