Keeping Up with Country and Tax Compliance - May 2019
Tungsten Network has recently added two more territories – Bahrain and French Overseas Territories (Reunion, Guadeloupe, Martinique, Mayotte and French Guiana) to our list of countries in which we offer a fully tax and regulatory compliant service. This brings the total number to 50, which underscores our commitment to remain the world’s largest truly tax compliant e-invoicing network.
To mark the occasion, we offer a roundup of the global compliance landscape, including all the latest information on e-invoicing from around the world.
Based on discussions held within the Greek Independent Authority for Public Revenue (IAPR), from 1st January 2020, companies will be required to report transactional (invoice) information through an online bookkeeping platform called “EPOSIS”.
Contrary previous announcements, Greece does not yet intend to implement a B2B e-invoicing mandate in the near future. The change described above will not impact Tungsten Network’s compliance in Greece.
It is likely this will have to occur with a 1-3-month period after the invoice is issued. Further to this, they intend to introduce a close to real-time reporting system in a following phase. Further technical details are still to be published officially.
European Union (B2G Directive)
On 18th April 2019, the EU directive (2015/55/EU) came into effect for central government contracting entities; there is an extended deadline until 18th April 2020 for non-central government entities. The EU Parliament and Council adopted this Directive to stop the proliferation of non-interchangeable standards between the member states.
The directive means that if you are a public administration in the EU, or you would like to do business with one, you will need to comply with the European standard for sending, receiving and processing electronic invoices.
The European Commission for Standardisation (CEN) has developed a European invoice standard, called the Core Invoice. It comprises mandatory and optional data elements and allows government buyers to process electronic invoices from all or most of their suppliers. Note that governments can decide on variations of the core invoice:
- Government entities can choose to restrict the optional invoice fields in the invoices they receive and only use a subset of the available optional fields. For instance, they can restrict the use of payment methods. Such a variation is called a Core Invoice Usage
Specification (CIUS). Such invoices still comply with EU Standard
- Government entities can decide to require additional invoice information, beyond the fields available in the Core Invoice. Such extensions do not comply with the EU standards and require bilateral agreements (these can be industry-specific)
The EU standard is not prescriptive in respect to the e-invoice format and delivery method, and while most EU governments have their own supplier portals, the majority support Pan European eProcurement Online (PEPPOL).
A number of EU member state governments have imposed mandatory B2G e-invoicing, like Sweden, Netherlands, Belgium and Portugal. Spain has taken their mandate a step further by making subcontractors to suppliers to government subject to the mandate as well.
Tungsten Network is a PEPPOL Access Point and is in the process of enhancing our PEPPOL capabilities.
On the 6th May 2019, the Indian government announced their advanced plans to move to a clearance model for all domestic B2B invoices, in a bid to eliminate invoice fraud and reduce tax leakage in the country. Companies will have to submit invoices electronically either via a government portal or an integrated connection with the government system. If the B2B mandate is successful, the government may extend this into the B2C environment.
The intention is to implement this new model as soon as September 2019 for at least some tax payers, which is extremely ambitious given the volume of paper invoices in India. It is therefore important to note that the government is still in the process of finalising invoice requirements and implementation plans.
The implementation will likely be phased, depending on turnover revenues/ invoice value thresholds.
From 1st January 2019, customer accounting for certain prescribed goods has been implemented in order to deter fraud schemes where the seller absconds with the GST collected but businesses further down the supply chain continue to claim the input tax. It will be applicable to supplies of mobile phones, memory cards and off-the-shelf software (referred to below as “prescribed goods”), which are commonly used in these fraud schemes.
The customer accounting is applicable to GST-registered business owners who purchase, import and/or sell the prescribed goods in Singapore; or if the owners are a ‘section 33(2) GST Agent’ and supply prescribed goods in Singapore on behalf of their overseas principals.
Suppliers are required to apply customer accounting on their local sale of prescribed goods made to a GST-registered customer if the value of the sale (excluding GST) exceeds $10,000.
Tungsten has implemented Customer Accounting for invoices and credit notes.
Based on Taiwan’s Tax Ruling No. 10600549520, the Taiwanese government has confirmed that from 1st January 2020, companies can no longer use the Government Uniform Invoice (GUI) to send domestic invoices. This means companies must either send invoices electronically via an integrated connection/service provider or send handwritten invoices. Service providers must have local processing capabilities for domestic invoices. Tungsten is currently evaluation the possibility to offer compliant e-invoicing through local partnerships.
From 1st November 2020, the Vietnamese government will mandate electronic invoicing for domestic B2B invoices, following Decree 119/2018/ND-CP approved by the Government on 12th September 2018.
The government will implement a mixture of Post-Audit and Clearance models, depending on industry and whether a company is deemed ‘high-risk’.
During the period from 1st November 2018 to 31st October 2020, enterprises that are notified by the tax authorities that they must switch to use e-invoices with verification codes of the tax authorities (presumably high risk enterprises) must submit e-invoices. If the enterprises’ IT systems are not qualified to adopt e-invoicing, they must submit a specific form, called Form 03 (promulgated together with the Decree), which contains information regarding output VAT invoices to the tax department together with the VAT return.