January 2022: E-Invoicing & VAT compliance updates
Welcome to the January 2022 edition of OpenText’s E-Invoicing Regulation update. We wish all of our clients a very happy and prosperous New Year for 2022!
In order to assist our customers with the latest information related to the evolution of e-invoicing and VAT compliance regulations around the world, we are pleased to share further updates about changes in Italy and Poland, as well as news about the ongoing drive across the European Union towards e-Invoicing, with specific updates on B2B e-Invoicing in Germany, Belgium, Spain, and Romania.
In the rest of the world, Mexico is updating its XML invoice format to a new version while Australia continues its push to accelerate e-Invoicing adoption with a new public consultation that our customers in the region should take heed of and participate in.
Italy – draft law to postpone cross-border reporting
Announced back in the Italian Law no 178 of 30 of December 2020, the plan to abolish the Esterometro report – which was scheduled to go ahead on January 1st 2022 – is now under review by the Italian government and expected to be postponed until July 1st 2022.
While the draft bill for postponement has still to be officially passed into law, it’s now highly likely that the updated Italian e-invoicing cross-border requirements will indeed be postponed.
For existing customers using OpenText Active Invoices with Compliance in Italy, this means they will now have an extra 6 months to comply.
We will keep you updated on developments.
Compliance news updates
European Union: VAT gap drives towards cross-EU e-Invoicing mandate
A September study by the European Parliament expressed concerns about the ongoing VAT Gap, which was estimated at over €130 billion in 2019 across EU member states.
The study formally proposed adapting EU VAT rules in order to combat this and talks about the “use of information technology as a tool for easier compliance and a more efficient fight against fraud, by modernizing VAT reporting obligations and facilitating e-invoicing”.
With 8 EU member states already announcing mandates, it seems inevitable that an attempt to harmonize rules would follow – whether mandates will simply be permitted or enforced across all member states remains to be seen, but with such clear and demonstrable benefits for tax fraud reduction it seems
Belgium: Announces a gradual move towards mandatory e-Invoicing
The Belgian finance minister Vincent Van Peteghem has confirmed their intent to follow the increasing trend and implement a mandatory system of e-Invoicing.
Details of timeline and technical requirements are expected to be announced in a legislative proposal in 2022.
As ever, watch this space for developments.
Germany: New coalition government announces e-Invoicing mandate
The German FDP has been calling for a mandate on e-invoicing for some time. We can confirm that the new coalition federal government has included in their inaugural agreement the stated objective is to implement such a mandate. This forms part of other bold strides towards digitization which they hope will help to modernize the economy.
No detail has yet been provided as to the technical approach to be taken, we can only hope that they will learn the lessons of other governments and choose to implement a model that benefits both businesses as well as the tax agency.
More information will follow once announcements are forthcoming from the German finance ministry.
Italy: B2B mandate extended
The European Commission derogation – which allowed Italy to become the first EU member state to issue an e-Invoicing mandate for B2B invoices – officially expires on December 31, 2021. The Italian government on December 13th 2021 received authority to extend the derogation so they can continue their mandate until the end of 2024.
In addition, please note that the mandate will be extended further by removing the current exemption for small businesses and freelance operators.
Poland: New invoice logical structure published
Additional technical detail has now been published relating to Poland’s new e-Invoicing system – Krajowy System e-Faktur (KSeF).
The additional publication includes semantic descriptions of field options e.g., country codes and currency codes, as well as various other data elements.
Remember that this remains entirely voluntary starting from January 2022 with limited benefits until it is in wider usage – so no action is required at this point.
Romania: VAT Gap drives new e-Invoicing system
Romania had the highest VAT gap in the EU in 2019 – almost 35% – so it’s no surprise to see them join the many countries moving to digitize tax reporting and invoicing. They are pushing both a SAF-T (Standard Audit File for Tax) electronic reporting mandate as well as a new optional e-Invoicing system referred to as E-Factura.
E-Factura was piloted in 2020 and was based on the existing B2G framework. Government Emergency Ordinance (GEO) no. 120/2021 introduced the new legal guidelines for B2B implementation and additional documentation has been made available.
To be very clear – there is no announcement yet about a timeline for making the system mandatory – E-Factura remains optional for the foreseeable future and while some technical guidelines have been made available there are still a lot of details missing so no action is required / possible at this point.
Spain: Draft legislation for B2B e-Invoicing mandate moving towards approval
The draft legislation that would extend the Spanish B2G mandate to include B2B – as detailed in our last newsletter – is now moving through the debate in the Spanish Parliament and the draft is expected to gain approval.
Full legal and technical detail is still to follow, and we will keep you updated in forthcoming newsletters.
Mexico: CFDi 4.0 proposed by SAT for 2022
The Economic Package for 2022 included a proposal of various modifications to the Digital Tax Invoices format (CFDI) in order to drive greater control of taxpayers. The new version is CFDI 4.0 and will become enforceable from 1 April 2022.
The CFDI 4.0 documentation is available on the website of the SAT (Mexican Tax Administration) and we will be supporting this new version on our platform. We will begin instructing customers who have deployed in Mexico on actions they might need to take once it becomes necessary.
Asia-Pacific and Rest of World
Australia: Public consultation on e-Invoicing adoption
Recognizing that invoice processing is still around 90 percent manual, with significant unnecessary costs for business, the Australian government 2021-22 budget included investments in accelerating e-Invoicing adoption by businesses. As part of this process, the government has issued a follow-up consultation paper requesting stakeholder views on ways to further support and grow e-Invoicing adoption.
The initial plans discussed include leveraging the PEPPOL network through the Australian Peppol Authority (APA) which would make it mandatory for all businesses to implement PEPPOL While this can be seen as a step forwards in principle, in practice, enforcing the use of mandatory closed systems like PEPPOL tends to reduce the automation benefits for businesses since it prevents them using existing technologies like EDI and web forms which may already be established with trading partners, thereby increasing the cost of implementation.
OpenText customers trading in Australia are advised to consider taking part in the consultation process to ensure their voice is heard. The consultation is open until February 25, 2022. The consultation documentation and process can be found on the Australian treasury’s website here.
OpenText involvement with EESPA
To demonstrate OpenText Business Networks’ ongoing commitment to e-Invoicing, in November 2021 our Director Of Product Marketing for e-Invoicing, Ken Clark was elected a member of the Executive Committee of EESPA – the European e-Invoicing Service Providers Association. EESPA is an industry body whose membership includes all of the major vendors in the e-Invoicing space.
Ken has been a leading figure in the e-Invoicing community for over 15 years formerly as Product Manager and SME for e-Invoicing at IBM/Sterling and for 7 years SME at OpenText. He also held the position of Director of Global Invoice Compliance for JAGGAER.
OpenText was a founding member of EESPA over a decade ago and Ken Clark has represented us for much of that time and been an active participant in the EEPSA working groups covering Public Policy and Compliance, Interoperability, Invoice Finance, and eProcurement. The Executive Committee is responsible for guiding policy and driving strategy within EESPA.