Welcome to the February 2022 edition of OpenText’s E-Invoicing Regulation update.
We are delighted to announce an important change to our ongoing e-Invoicing and VAT compliance newsletter. As the expansion of e-Invoicing mandates and the rate of change in existing legislation increases, we will respond with a more frequent release schedule to better support our clients with the latest news as it happens.
Please refer to our “Hot topics” section for items which may require imminent consideration on your behalf, for example about the EU public consultation on e-Invoicing and tax, as well as the latest news on technical requirements for the upcoming French B2B e-Invoicing mandate, and news of a new mandate for B2G eInvoicing in Luxembourg.
For more general information see the “Compliance news and updates” section for brief updates about proposed B2B e-Invoicing mandated in both Belgium and Romania.
In “Other news” we are excited to announce a new addition to our e-Invoicing and compliance team here at OpenText Business Network. Kamila Ferhat joins us as e-Invoicing and e-Reporting subject matter expert bringing extensive tax expertise, especially around the impending French B2B mandate.
Finally, those interested in a more comprehensive understanding of the e-Invoicing and tax compliance market and its evolution should note the new reports recently released by our e-Invoicing partner SOVOS, and industry analysts Billentis.
European Union – VAT in the digital age – public consultation
On 15 July 2021, the European Commission adopted a new Tax Package called “Fair and simple taxation” that includes a set of 25 initiatives that will be implemented between now and 2024. One of the initiatives is related to a legislative proposal for 2022 on “VAT in the digital age”, which aims to address the ways that technology can be used to fight tax fraud and benefit business, and this will cover e-Invoicing and related obligations around VAT reporting.
The “VAT in digital age” initiative is panned in a two-step approach: a preparation step that will occur between January and April 2022 and an adoption step planned for the third quarter of 2022. Stakeholders can give their feedback on this initiative until 15 April 2022.
- Phase 1- the call for evidence. During this step, stakeholders can describe the problem to be tackled and objectives to be met, explain why EU action is needed, outline policy options, and describe the main features of the consultation strategy, including whether a public consultation with a questionnaire is needed.
- Phase 2 – The public consultation seeks stakeholders’ views on whether the current VAT rules are adapted to the digital age, and on how digital technology can be used both to help Member States fight VAT fraud and to benefit businesses.
In order to give your feedback or respond to the public consultation, you can use this link.
France – updated technical requirements
On January 18th 2022 OpenText attended a presentation of the updated technical requirements for the upcoming French e-Invoicing and e-Reporting mandate. These new requirements were published at the end of December 2021 by the Agency for State Financial Data Processing (Agence pour l’Informatique Financière de l’État – AIFE) in charge of the e-Invoicing Public Portal.
This new version of the technical requirements added some clarifications regarding the content of an e-Invoice (new information will be mandatory from 2024 such as SIRET number of the receiver and issuer of the invoice, etc), e-reporting (scope, options regarding the format, the content of the e-report data, etc), the possible transmission approaches for both e-Invoices and e-Reports, connection protocols between companies, private platform considerations (such as OpenText) and the public portal, etc.
The updated documents can be found on the French Government portal here.
An updated FAQ on their implementation has been published here.
Further updates to the technical requirements are expected in the coming months and several additional presentations are planned by the agency – we will continue to participate and keep you informed.
Meanwhile, France has now received the necessary derogation from the EU required to proceed with the mandate. This decision takes effect from 1 January 2024 and is valid until 31 December 2026. All EU member states must seek ongoing special permission for such mandates, since the VAT directive (directive 2006/112/EC) explicitly prohibits member countries from forcing buying organizations to accept e-Invoices.
Customers wishing to discuss the French mandate in more detail should reach out to their account representatives to arrange a consultation with our resident expert. See our “Other News” section below for more information.
Italy – cross-border e-Reporting mandate update
As we reported in our January 2021 newsletter, the proposed abolition of the Esterometro report which is used today by Italian companies with cross-border operations transacting invoices internationally has been postponed until 1st July 2022.
From that time, data related to non-domestic purchase and sales invoices (except for certain specific cases) must be transmitted to the Italian tax authorities in electronic format (fatturaPA) and using the SDI portal, just as regular domestic B2B invoices are today.
There are a few additional points for customers who are affected to note.
The communication to the SdI is optional for all transactions for which a customs invoice has been issued and those for which electronic invoices have been issued or received vis SdI (e.g. where a parallel process is already in place to the SdI).
This process for issuing invoices to persons not established in Italy needs to be carried out within the same time limits as for issuing regular domestic invoices (i.e. within 12 days of the transfer or service being made or within the different period established by specific provisions).
The transmission of data relating to invoices received from persons not established in Italy must be carried out by the fifteenth (15) day of the month following the month in which the invoices were received, or the transaction was carried out.
Luxembourg – Switch to mandatory B2G e-Invoicing
While all EU member states have implemented the Public Procurement Directive (2014/55/EU), Luxembourg was one of many which had taken the “soft” approach of only mandating government agencies to be prepared to receive e-Invoices for public purchases. This approach, introduced in April 2019, has now been amended as of 13 December 2021, and now makes the issuance of electronic invoicing mandatory for all B2G suppliers.
This new e-Invoicing mandate for B2G transactions will enter into force according to a progressive calendar between 18 May 2022 and 18 March 2023, depending on the size of the companies. Large companies will have to issue e-invoices to public entities on 18 May 2022, medium-sized companies on 18 October 2022, and small companies on 18 March 2023.
Electronic invoices must be issued in a structured electronic format in accordance with the requirements of the European standard EN 16931 (Peppol BIS Billing 3.0) and delivered using the PEPPOL network.
In order to put in place the B2G e-invoice obligation, the Luxembourgish Chamber of Commerce announced that it will help companies during this reform by organizing free webinars, publishing a practical guide containing information concerning electronic invoicing, and supporting Luxembourg companies in this digital transition.
OpenText customers supplying public authorities in Luxembourg should work with us to leverage our accredited PEPPOL gateway for their B2G transactions.
Mexico – Carta Porte and CDFI 4.0
A reminder for those customers operating in Mexico that the mandatory XML format – CFDI – has now been updated to 4.0, with a transition period in place until 31st March 2022. From 1st April all e-Invoices must conform to the new 4.0 standard and older versions will no longer be compliant. More information is available from the Mexican tax agency, the SAT, from this link.
In addition, version 2.0 of the complemento Carta Porte – a mandatory addendum to the CFDI for transportation of goods within Mexico – was published in October 2021 and is now also mandatory. Again, there is a transition period that runs until 31st March 2022. More information on the Carta Porte can be found here.
Compliance news updates
Belgium – update on B2B e-Invoicing mandate
In our January 2022 newsletter, we mentioned the confirmation of Belgium’s plan to switch to fully mandatory e-Invoicing for B2B invoices by the Ministry of Finance.
The proposed timing – which is mid-2023 – has raised objections from various stakeholders since the full scope of the proposed mandate remains undefined with no legislation in place, and no technical specifications published.
However, they have confirmed that their model will be based on PEPPOL, which has an established network. This is quite a different approach to other member states such as Italy and France who developed their own platform/gateway, and this will certainly accelerate the process.
We will share more information as it is made available.
Romania – e-Invoicing mandate
Romania has joined the many EU countries announcing a mandate for e-Invoicing, although at this stage it has only discussed a mandate for five categories of “high fiscal risk products” which includes perishables such as fruits and vegetables, alcohol, certain mineral products, clothing, and footwear and constructions.
At this stage, only very high-level information has been made available and no announcement about extending the above to a national mandate is forthcoming.
Welcome to our new e-Invoicing SME – Kamila Ferhat
We are delighted to welcome Kamila Ferhat to OpenText Business Network. Kamila joins our Solution Consulting team as Principal Solutions Consultant and lead Subject Matter Expert for e-Invoicing and e-Reporting
Kamila has over a decade of domain expertise in tax, accounting, and their application to information technology.
She joined us from Ernst & Young Société d’avocats where she was Tax Consultant for 5 years, and prior to that in the same role for Taj Société d’avocats (French Deloitte Touche Tohmatsu member).
Her expertise in consulting with clients around the process of invoice dematerialization and tax audit will be invaluable.
She also has been directly involved with the French government consultations around the impending e-Invoicing and e-Reporting mandate, and so brings in-depth knowledge and expertise to OpenText.
OpenText clients concerned about the French mandate are invited to reach out to their account representative to arrange a consultation on this topic.
Annual market outlook and trends – industry experts report on e-Invoicing market
SOVOS and Billentis have now published their annual reports which provide detailed insights into the state of the e-Invoicing market.
The 13th Edition of SOVOS’ Trends is now available from their website. SOVOS has remained not just a market leader in the area of digital signature and tax compliance, but also a thought leader in the industry recognized by governments and industry bodies for their expertise.
Their annual white paper is a deep dive into the evolution and ongoing trends in VAT compliance and is a must-read for anyone seriously interested in this area. It covers the key VAT digitization trends around the evolution of invoice transaction controls and electronic reporting.
One of the key trends identified is how the acceleration of tax digitization globally is driving the requirement for greater integration, data quality, and consistency and how regional point-solutions result in fragmentation and risk. OpenText’s open API-driven approach and global footprint positions us ideally to help global companies address these issues.
Equally as important in the Sovos white paper are the country profiles which cover all of the key territories globally which have introduced relevant legislation around this area of e-Invoicing / e-Reporting.