Spain is currently on its way to implement mandatory B2B e-invoicing, in order to modernize the economy, combat VAT fraud, improve transparency and traceability, and facilitate timely payments between businesses. A new draft law was published recently, in which electronic invoicing was one of the key accents.
What is changing?
The new draft law stipulates that all businesses (enterprises and the self-employed) will have the obligation to issue e-invoices to their clients. This will help them with payment collection, but will also streamline and standardize business relationships, as far as invoicing is concerned.
One of the goals of the introduction of mandatory B2B e-invoicing is to give the Spanish tax office better visibility into the economic activity in the country, and also to close the VAT gap (the difference between the projected and the real VAT income). Additionally, the tax authorities will be able to supervise payment terms and reduce delays.
All businesses will have the obligation to provide electronic invoices to their clients, but also make sure that clients can access invoices, and open, download and print them as necessary. E-invoices must be accessible for a period of at least 4 years. If companies fail to provide an electronic invoice or fail to grant access to its recipient, this will be considered an administrative offense.
Spanish businesses have a grace period of 1 to 3 years to implement e-invoicing
The Spanish Ministry of Economy recognizes the fact that the new measures place a big administrative burden on Spanish businesses, and especially on small and medium enterprises and on self-employed individuals (freelancers).
For this reason, the government has decided to grant a transitional period of 3 years to businesses whose annual turnover is under €8 million, starting from the publication of the law in the Official State Gazette (Boletín Oficial del Estado, BOE). For businesses whose annual turnover is above €8 million, they’ll have 1 year to implement the necessary changes of their accounting processes and switch to e-invoicing.
The proposed draft law was open for public consultation until early September 2021. Afterward, the Government will likely forward it to Congress to begin the legislative implementation process. Additionally, the Ministry of Economy will have to define all aspects of the e-invoicing system, i.e. all technical, security, control, and standardization requirements. Spanish businesses must be prepared to act quickly and adapt to the new measures.
Fonoa Automated Real-time Invoice Reporting Solution
We are aware that new regulations have a substantial impact on how businesses operate. That’s why we built Fonoa Reporting, a solution that automatically reports sales transactions to tax authorities around the world.
If your business is affected by real-time invoice reporting obligations anywhere in the world, reach out to us, and we will help you automate the invoice reporting process.