The latest updates from around the world
France delays implementation of Continuous Tax Controls by 18 months
The French Council of Ministers announced on September 15th, 2021 that the introduction of the e-invoicing and e-reporting mandate has been postponed by 18 months. Please click here for the official announcement. While France was making good progress with the preparation for the mandate, the implementation time was deemed to be too short given the significant impact of the new obligations on businesses (originally the first phase of the mandate would have kicked in on January 1, 2023).
Upcoming MyData changes
Greece is looking to implement a phased roll-out of its upcoming e-invoicing MyData changes, starting on 1st September 2021. As a reminder, e-invoicing in this context refers to the connection of a certified e-invoicing certified service provider to the MyData platform. Tungsten does not meet the requirements for a certified provider, so we are requesting that suppliers attach their legal invoice to our Tungsten solution as we won’t be able to create the legal artefact for suppliers once the changes take effect.
Here are some key dates to watch out for:
- 1 September 2021: Companies will proceed on a phased basis from this date around the electronic transmission to MyData and the interconnection specifically of cash registers with Greek electronic system. This will be based on the type of their accounting books and annual revenues;
- 1 October 2021: The mandatory transmission of business documents to the MyData platform becomes mandatory;
- From 1 October 2021 onwards, the following businesses must send their accounts receivable documents (i.e. invoices) which they issue:
- Businesses with double-entry accounting books with a turnover of over € 50.000.
- Businesses with single-entry accounting books with a turnover of over € 100.000.
- 1 November 2021: all other companies must submit their invoices.
The Greek MyData changes have been delayed multiple times already. So far we have not heard anything to indicate that these changes will not be going ahead on 1 September 2021. We will keep you updated.
Draft law extending current B2G mandate to specific B2B transactions - public consultation open
Spain’s e-invoicing landscape looks like it may be expanding into the B2B sector, for transactions between companies and the self-employed
The Spanish government recently announced a draft law for ‘Creation and Growth of Companies’. This covers many elements- one being the proposal to extend the obligation to exchange invoices for B2B transactions as well as B2G transactions.
The public consultation for this is open until 6 September 2021.
Draft version of e-invoice logical structure available
With the voluntary phase of the mandate fast approaching in January 2022, the Polish Ministry of Finance has published some new documentation.
This includes the draft version of the e-invoicing structure and a sample invoice, which can be found on the Polish Ministry of Finance website: https://www.gov.pl/web/kas/krajowy-system-e-faktur
Postponement of voluntary mandate phase
The voluntary phase of the Polish national e-invoicing mandate has been delayed until January 2022. It was originally scheduled to be implemented in October 2021.
Option to use PDF e-invoices extended to 31 December 2021
Portugal has previously communicated the admissibility of invoices in PDF format as electronic invoices. Order no. 260/2021-XX11, dated 27th July 2021, has extended this permissibility until 31 December 2021. This had previously been extended until 30 September 2021.
PDFs must be digitally signed from January 2022.
Italy / San Marino - mandatory e-invoicing for transactions
There has now been some further progress around transactions between Italy and San Marino – the Italian Revenue Agency has published technical specifications via Provision no. 2021/211273. These technical specifications will provide details around how invoices will be issued and received with San Marino residents for goods and services.
Here are some key dates to watch out for:
- 1st October 2021- the Decree comes into force;
- Until 30th June 2022- paper invoices can still be issued;
- 1st July 2022: Mandatory for Italian taxpayers to issue only e-invoices.
Further changes in the e-invoicing mandate
In Saudi Arabia, the deadline for the implementation of Phase 2 of the e-invoicing mandate has been delayed to 1st January 2023 and it will be implemented in waves by targeted taxpayer groups. Select taxpayer groups will be informed 6 months prior to the go-live date.
In relation to Phase 1 – the Generation Phase, which will be enforced by December 4th, 2021, there is no prescribed invoice format. However, e-invoices must be issued as a structured file. This means that from the implementation date, paper and PDF invoices no longer qualify as valid tax invoices.
The mandate rules for Phase 2 remain unchanged. E-invoices must be issued in XML/Hybrid (PDF A-3) format and suppliers will need to clear the invoices with GAZT before sending these to buyers. Due to the technical nature of the requirements in Phase 2, taxpayers are encouraged to consult a solution provider or their internal technical teams to ensure their e-invoicing systems comply with ZACTA (General Authority for Zakat and Tax) requirements.
Introduction to Vietnam’s mandatory e-invoicing
In 2020, Vietnam delayed its implementation date of mandatory electronic invoicing until July 1, 2022. So far, we have not heard signals that suggest any further delay.
From July 2022, paper and PDF invoices no longer qualify as valid tax invoices. Under the mandate, the e-invoice must be in XML format, include a digital signature and be securely stored for ten years. In addition, Invoices need to be in Vietnamese language; a second language is allowed. The second language needs to be placed in brackets next to the Vietnamese texts or under the Vietnamese texts using a smaller font.
There will be two types of e-invoices: the e-invoice with tax verification code and e-invoice without tax verification code. The process with the tax verification code is so -called pre-clearance where invoice data must be submitted to the tax office (GDT- General Department of Tax). Upon registration and approval of the invoice data, the tax office returns a specific code that needs to be included in the invoice that is sent to the buyer. The requirement to add a tax verification code to the invoices depends on the taxpayer’s business sector, tax risk, and annual revenue.
To use either type of e-invoice in Vietnam, companies must register and receive approval from the Vietnamese tax authorities via the website of the General Taxation Department.
Looking to achieve nationwide coverage of fapiao digitisation by 2025
China has set to roll out e-special VAT fapiao to all taxpayers by the end of 2021, with the expectation to achieve nationwide e-fapiao coverage by 2025.
The STA (State Tax Administration) has launched a public e-invoicing platform aiming to provide free e-invoicing support 24/7 (inv-veri.chinatax.gov.cn). Suppliers/Buyers can access this website to:
- perform validation checks on both paper and electronic invoices issued within the last 5 years. Each invoice can only be checked 5 times per day.
- download relevant certificates and software, e.g. OFD reader, e-invoice generator for UKEY users.
- learn more about e-invoicing in china via online resources, e.g. how to identify the validity of paper fapiao.
It’s noticeable that this platform has access restrictions to foreign browsers and may not work on Apple IOS systems.
Delayed go-live date for Phase two in the e-invoicing mandate
In Saudi Arabia, the Phase two enforcement date in the e-invoicing mandate has been delayed to 1st January 2023 and it will be implemented in waves by targeted taxpayer groups. Select taxpayer groups will be informed 6 months prior to the go-live date.
Due to the technical nature of the requirements in Phase two, taxpayers are encouraged to consult a solution provider or their internal technical teams to ensure their e-invoicing systems comply with ZACTA (General Authority for Zakat and Tax) requirements.
B2G e-invoice mandate
The Australian government has announced to mandate e-invoicing for all levels of government by 1st July 2022 as part of the Digital Business Plan. Australia operates its e-invoicing system based on the PEPPOL framework. To send or receive an e-invoice, a business must connect to the PEPPOL Network through an Access Point. Australia’s Tax Office manages a registry of Access Point servers that have been officially accredited by the tax office.
eVAT return postponement
The Hungarian government has postponed its e-VAT return concept to October 2021. This was initially due to be implemented in July 2021. The e-VAT return concept involved the tax authority preparing a draft VAT return for taxpayers based on real-time reporting data collected.
GST / HST tax changes
From 1 July 2021, Canada’s GST / HST rules have changed around how tax is applied to online sales from non-resident digital businesses. These changes were implemented as GST / HST was often not being collected on online purchases from non-resident vendors.
Therefore, from 1st July 2021, any foreign suppliers of digital services to consumers based in Canada will be required to register for GST / HST and to collect and remit any tax to the Canada Revenue Agency (CRA).
Public platform & Rulebooks
Serbia is moving towards an e-invoicing mandate. This will be a phased approach, with the following envisaged dates:
- 1 January 2022: Public sector entity to receive and keep an electronic invoice and issue invoices to other public sector entity (G2G) & Private sector entity to issue an electronic invoice to a public sector entity (B2G);
- 1 July 2022: Public sector entity to issue an electronic invoice to a private sector entity (B2G) & Private sector entity to receive and keep an electronic invoice issued by a public and private sector entity;
- 1 January 2023: To issue and keep electronic invoices in transactions between private sector entities (B2B).
Implementation SAF-T as from 1 January 2022
The National Agency for Fiscal Administration (“NAFA”) has started the implementation of SAF-T in Romania.
The preliminary SAF-T structure was published in April 2021, while the related guidance and legislation is expected to be published this summer. The SAF-T related software at NAFA’s level is expected to be finalised by the end of July 2021, allowing voluntary testing together with large taxpayers to be performed during August – December 2021. January 2022 will be the first reporting month for large Romanian taxpayers, and SAF-T reporting periods will follow the VAT reporting period (e.g. monthly or quarterly).
The technical specifications have been released and can be found on the ANAF portal.
Mandatory e-invoicing for ‘traceable’ goods from 1st July 2021
From 1st July 2021, Russia will introduce mandatory e-invoicing for taxpayers dealing with traceable goods. Certain goods such as refrigeration and freezing equipment, will be deemed to be traceable goods. From 1st July 2021, invoices for these goods must be electronic.
Under the traceability system, each consignment of goods would be assigned a registration number during import. Businesses within the scope of the traceability system would need to include the registration number in their invoices.
New standard rate of 16% in the Azores
The standard VAT rate in Portugal (the Azores) has been reduced from 18% to 16%.
Tax Circular 30237 outlines the procedures to be followed further to this tax rate change. These include:
- Chargeability;
- Adjustments;
- The cash VAT regime;
- Intra-community acquisition of goods.
There have been no changes to the mainland Portuguese tax rates.
Law on electronic invoicing takes effect
The Law on electronic invoicing entered into force on 7 May 2021. There will be a phased introduction of e-invoicing with B2G invoicing due to take effect from 1 January 2022. Full implementation, including B2B invoicing, is expected from 1 January 2023. The new Law also introduces a requirement to electronically record VAT calculations within the electronic invoicing system. In addition, a new webpage was launched (https://www.efaktura.gov.rs/) by the Ministry of Finance. The webpage is specifically designed to cover updates concerning the e-invoicing project, implementation, and related topics. The testing environment of the e-invoicing system should in principle be made available to the users in July.
Concept of real-time reporting
The Bulgarian National Revenue Agency (NRA) are looking to progress the preparation of a concept for receiving real-time information on invoices this year. The manufacturers of cash registers will become software fiscalizers, because the microcomputers that are in them can send this data to the NRA.
E-invoicing project in Botswana
In Botswana, the objective of a new project is to ensure the mandatory use of ‘the electronic VAT invoicing’ solution by all entities registered for VAT. This represents a novel approach thus far in the Botswana tax environment.
Italy intends to extend and expand e-invoicing mandate
Italy would like to obtain a permit from the European Union to extend the obligation of electronic invoicing until the end of 2024. Furthermore, plans are being made to expand the range of subjects also to one and a half million professionals, self-employed and VAT numbers on a flat-rate basis, currently excluded.
End of the Transitional Period for VAT rate increase
Further to VAT rate increase from 5% to 15% announcement effective the 1st of July 2020, the Zakat, Tax and Customs Authority (“ZATCA”) in Saudi Arabia has announced transitional rules governing supplies that are made during the transitional period for the VAT rate increase i.e. from 11 May 2020 to 30 June 2021. The transitional rules would not be applicable starting from the 1st of July 2021 onward and the VAT rate to be applied going forward should be 15% applicable to all supplies made (except where zero-rated or exempt by law).
Grace period of 4 months granted to taxpayers who didn't implement e-invoicing system yet
The Egyptian Tax Authority kicked off the fourth phase of the electronic tax invoicing system’s implementation. Companies registered at the Medium Taxpayers Center in Cairo and the Large Taxpayers Center of the Free Profession are required to issue electronic invoices after the grace period of 4 months, due date Sep 15th 2021. These businesses will have to adhere to the terms and conditions set out by the Egyptian Tax Authority, which includes the issuance of the electronic signature certificate, the usage of a certain coding system, etc.
The e-invoicing system is fully applied as from mid of May 2021 for all the taxpayers who are relevant to the Large Taxpayer Center Department.
This is in line with the Egyptian goal to have e-invoicing completely implemented as of 1 January 2022, which is part of the government’s digital plans.
Joining Italian e-invoicing
The Italian Ministry of Finance, with the Act no. 103 published on May 26, 2021 has laid the foundations for the introduction of the e-invoicing regime between Italy and San Marino. Italy and San Marino have agreed a transitional period (from 1 October 2021 until June 30, 2022) during which San Marino and Italian taxpayers could opt for the e-invoicing system instead of traditional “paper” invoicing. In particular, the taxpayers of the two countries will be able to issue e-invoices on a single cross-border system. The system will become fully operational starting from July 1, 2022.
Panama to implement e-invoicing clearance model
On June 1st 2021, the Tax Authorities have opened a voluntary process for e-invoicing in Panama, paving the path to a general mandate. To date no official specific date for this general mandate has been published, however the Tax Authorities are making reference to FY22 as the implementation date.
Revenue Authority announces e-invoicing systems for various categories of taxpayers
On 24 December 2020, the Rwanda Revenue Authority (RRA) announced that effective 1 January 2021, all taxpayers must secure invoices/receipts generated by the Electronic Invoicing System (EIS) as documentary evidence to support tax deductions associated with expenses for the years of income from 2021 onwards. The RRA has since clarified some further questions this raised.
The RRA published an announcement on 14 May 2021 regarding the available Electronic Invoicing Systems (EBM) for the different categories of taxpayers. Five Systems are being defined.
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- EBM Software
- EBM Mobile System
- Online EBM solution
- Online Sales Data Controller
- Virtual Sales Data Controller
Government departments and local authorities exempt from e-invoicing
On 1st June 2021, the Indian Government released a notification stating that government departments and local authorities are exempt from the e-invoicing mandate being implemented.
Click here to learn more about the Indian mandate.
Update on pilot project
Philippines is moving towards an e-invoicing system by 2023.
According to recent reports, the pilot project will be launched in January 2022 in preparation for its phased roll-out of their e-invoicing system in 2023. At this stage, corporations falling under the large taxpayers classification and exporters are selected for the pilot project as they have a computerised accounting system which is needed for e-invoicing and e-receipts.
Further details of new 'Qualified Invoice Retention System'
Japan will introduce a new qualified invoice regime for Japanese Consumption Tax (JCT) with effect from 1 October 2023. This will bring the JCT regime more closely in line with European-style VAT regimes, and in order to claim input tax credit, the purchaser will be required to retain ‘qualified invoices’ issued by ‘qualified invoice issuers’. Only taxable persons are eligible to register as qualified invoice issuers, and cannot be JCT exempt enterprises (i.e. they cannot be exempt from the obligation to file a JCT return and remit JCT). Unlike the current system, this requirement applies even if the enterprise’s taxable sales for the base period are JPY 10 million or less. Registration to become a qualified invoice issuer opens on 1 October 2021.
E-orders and e-catalogs by 1 January 2023
As from 2023 new legal e-ordering requirements for public authorities and institutions will become applicable.
As a consequence suppliers will be required to be able to receive e-orders and have e-catalogs (which will comply with the new Peppol standard) on the covered purchasing categories. A report regarding these requirements is scheduled to be sent out for consultation before the Summer holidays.
New VAT return as of 1 January 2022
The Tax Authorities have announced that a new VAT return will be introduced that will replace the current, manual VAT return, effective 1st January 2022. The new VAT return will be based on the SAF-T codes and will include approximately 30 boxes as opposed to the 19 boxes in the current VAT return. The Norwegian Tax authorities aim for a direct transfer from the company’s accounting system to altinn. It will however still be possible to fill out and submit the VAT return manually as per the current process.
Greek government mandate delayed for THIRD time
The Greek government have delayed mandatory invoice registration for ALL businesses through their myDATA platform. The new date floated for mandatory invoice registration through the myDATA platform is Autumn (anticipated October).
Limitation VAT input tax credit on paper invoices
Decree No.125 of 2021 was published by the Egyptian Ministry of Finance. As a result of this decree, businesses will not be able to deduct VAT on a paper invoice, unless the supplier is not yet required to apply e-invoicing at the time of supply as from January 2022.
Extension of deadline for use of PDF invoices
The introduction of Order 72/2021-XII of the State Secretary of Tax Affairs (SEAAF) dated 10 March 2021, has extended from 31 March to 30 June 2021 the term for acceptance for tax purposes of invoices in PDF format as electronic invoices.
Introduction of VAT
Oman has introduced VAT from 16th April 2021. VAT has been set at 5% on goods and services. Certain services will be taxed at zero-rated VAT, and others exempted.
The requirement for businesses to register for VAT will depend on business turnover, which has been outlined by the Sultanate of Oman.
Non-resident billing software certification from 1 July 2021
To combat tax evasion and fraud, the Portuguese Tax Authorities have defined some rules that billing systems must fulfil to ensure the non-violation of billing data once it is registered.
This means that only billing systems that fulfil the requirements defined in law and which are certified by the PTA can be used.
This will be effective from 1st July 2021. These new measures will also apply to non-resident businesses that are registered for VAT in Portugal with a turnover exceeding 50,000 Euros in the calendar year 2020. This means that these entities are required to use exclusively billing systems certified by the PTA for issuing invoices and other relevant tax documents.
There are a few options to business how to go about this- including choosing to have their own software certified, using third-party pre-certified software or outsourcing the process.
Compliance relief offered in light of Covid-19 pandemic
In light of the severity of the Covid-10 pandemic in India, the Central Board of Indirect Taxes and Customs (CBIC) has introduced several compliance reliefs for taxpayers.
These include the following:
- There will be no late fees for delayed filing of GSTR-3B of March/April, up to 15 days and 30 days from the original due date for Taxpayers with turnover more than INR 5 Crores and up to INR 5 Crores respectively. In addition to this, for the quarter ending 31 March 2021, no late fees will be charged if GSTR-3B is filed within 30 days from the original due date.
- The due date to file GSTR-4 is extended to 31 May 2021.
- The due date to file ITC-04 is extended to 31 May 2021 (for the quarter: January-March 2021).
- The due date to file GSTR-1 for April 2021 is extended to 26 May 2021 and for IFF the due date is extended to 28 May 2021.
- Due date for all other proceedings, asset order, etc., whose last date of completion falls between 15 April to 30 May is extended to 31 May 2021.
Click here to learn more about the Indian mandate.
Extension of temporary VAT rate reduction for overnight accommodation services
The VAT rate reduction from 8% to 1% for overnight accommodation services has been extended until 30 June 2021.
Funding for adoption of e-invoicing
Greater awareness around e-invoicing is being promoted in Australia- the Government will provide $15.3 million in funding to increase awareness of the value of e-invoicing for all businesses. This follows the announcement that e-invoicing will be mandatory for all Commonwealth agencies from 1 July 2022. This funding will support the Treasury and the Australian Peppol E-Invoicing Authority to improve business e-invoicing awareness and adoption. The aim is to assist in the adoption of Peppol e-Invoicing in the private and public sectors and lay further foundations for an expected national e-invoicing mandate.
Digital Signature and New Technical Rules
Columbia has now adopted the mandatory inclusion of electronic signatures in invoices. This mechanism has always been in place but has only recently become mandatory.
This will help to ensure the authenticity, integrity and non-repudiation of the invoice.
The requirement to include the registered address for foreign sales has been annulled.
Furthermore, the “Supporting Document 1.0 Technical Annex” has been introduced for Colombian taxpayers making purchases from suppliers that are not obliged to issue invoices. In order to support costs incurred or expenses with such suppliers, the purchaser must support ‘electronic’ supporting documentation i.e. an electronic invoice or equivalent documents, for validation by the National Tax and Customs Directorate (DIAN). This allows the transactions to be tracked and costs, deductions and deductible taxes to be monitored.
Market Pilot Working Group building & testing a virtual network for the exchange of e-invoices
The Business Payments Coalition, with support from the Federal Reserve, will begin recruiting for a Market Pilot Work Group. This group will build and test a virtual network that will enable businesses to exchange e-invoices. Interested stakeholders will be needed to develop and test the open-source tools and access points to be used in the pilot.
Proposed extension of 6% COVID reduced VAT rate to 30 September 2021
The Norwegian government has proposed to extend the temporary 6% reduced VAT rate for transportation, lodging, etc, until September 30, 2021 in the revised national budget. Originally, the reduced rate was to last until the end of June 2021. However, this decision is yet to be formally approved.
Further extension of new SDI rules
The use of Italy’s new Fattura XML format was originally mandatory from January 1, 2021 but was delayed until end of February 21. However, Italy has now again extended for the third time the newest rules relating to SDI invoices, The date from which the usage of the Fattura XML 1.6 becomes obligatory has been moved from 28th February 2021 to June 2021.
Tungsten Network has been ready for the new XML format from the voluntary introduction in September 2020.
Extension of hospitality and tourism VAT reduction
The UK Chancellor is again extending the VAT reduction on Hospitality and Tourism from 20% to 5% until 30 September 2021. It will then be reduced to 12.5% until April 2022 to help businesses in gradually moving back to the standard rate.
Slovakia starts a consultation process for e-invoicing
The Ministry of Finance in Slovakia will soon start a consultation process regarding e-invoicing. As a result of this, the government aims to:
• Simplify the current VAT declaration system;
• Reduce fraud;
• Reduce the administrative burden for businesses.
Public law entities and solution providers in the IT sectors will be contacted during the consultations to draw up a draft legislative text with their input.
Publication of draft law on e-invoicing for B2B and B2G transactions
Serbia is making good progress with plans to move to mandatory e-invoicing and has published a draft version of the law on e-invoicing on the website of the Ministry of Finance. Note: it has not yet been passed by the National Assembly of Serbia.
The proposed law is looking to regulate:
• the issuance of electronic invoices for both B2B and B2G transactions;
• the national e-invoicing platform or system;
• the elements which e-invoices should contain; and
• e-archiving
The provisions of the law are supposed to come into effect from 1st July 2021 for B2G transactions.
For B2B transactions, reception and storage of e-invoices will be mandatory staring from 1 July 2022, and the issuance of invoices from 1 January 2023.
Minister of Finance announces deadline to join e-invoicing system is 15 May 2021
The Minister of Finance Mohamed Maait announced on 3 March 2021 that registered taxpayers in Egypt who wish to join the e-invoicing system are able to do so until 15 May 2021.
The e-invoicing system should allow the Egyptian tax authorities to follow up all commercial transactions between companies, as the data of all invoices will be exchanged digitally and instantly. The Minister hopes e-invoicing can help eliminate the informal economy of Egypt.
Extension of acceptance of PDF formats
The Secretary of Tax Affairs stated in November 2020, that PDF invoices will still be deemed as electronic for tax and legal purposes, until March 2021.
This has now been extended from 31 March 2021 to 30 June 2021.
Mandatory transmission of tax documents’ data to myDATA platform postponed to July 1st, 2021
The start date for the mandatory transmission of tax documents’ date has already been postponed several times, with the last postponement to 1 July 2021.
It is important to note than none of the postponements left taxpayers ‘off the hook’ completely as the Greek tax office (AADE) considers the delays as grace period. The data that was generated in the grace period must still be submitted to the authorities through the myDATA platform by 31 October 2021.
6% Reduced VAT Rate for Streaming Theatrical Performances and Concerts
The Greek Public Revenue Authority (AADE) has recently published a Circular regarding the reduced VAT rate for tickets for streaming theatrical performances and concerts.
As of 11 March 2021, the 6% reduced VAT rate will apply for tickets for access to live streaming of such events. The new rate will apply for as long as the measure suspending public attendance to such events is in effect.
Argentina mandates QR codes on e-invoices
The Argentine tax authority (AFIP) has issued a general resolution (resolución general 4892/2020) which mandates the obligation to include a quick response QR code in e-invoices. This QR code should codify the identification of the parties and other essential data of the invoice (date of issue, total amount, currency).
Starting from 1 June 2021, all VAT taxpayers are required to implement QR codes in their e-invoices.
Paraguay plans e-invoicing pilot programme
Paraguay has started The Sistema Nacional de Facturación Electronica Nacional “SIFEN” (National E-Invoice System) in 2018, it was settled as a three-stage project divided as follow:
• 1- Pilot Plan: in which 14th local companies where selected and became the first e-invoices issuers.
• 2- Voluntary Adhesion: started in 2020 and to the date there are almost 200 companies participating in the programme. The companies submit an application to be part of the programme and where selected by the Tax Authorities.
• 3- Generalization: it’s set to start after the finish of stage 2, Tax Authorities will select companies to be included in the SIFEN till all the taxpayers are part of the programme.
Currently Paraguay is at the last part of the stage 2 which implies that the 200 companies have to finish their private systems develops on the last version of the Manual Tecnico V. 150 (Technic Manual) and be ready to operate with e-invoice. It is not required yet that those companies stop using regular invoices.
The pilot programme will test the functionality of a new tool called “E-KUATIA”. This is a free e-invoice tool aimed at physical persons and one-person companies.
More information on the E-KUATIA e-invoicing tool is available on the following website: https://ekuatia.set.gov.py/portal/ekuatia
Vendor registration to open for ‘Qualified Invoice Retention System’ from 1st October 2021
Japan will introduce a new qualified invoice regime for Japanese Consumption Tax (JCT) effective 1 October 2023. Under the current ‘Transitional Invoice Retention System’ (effective since 1 October 2019), in order to claim a JCT input credit, taxpayers are required to comply with certain bookkeeping and invoice retention requirements. This includes the recording of general information, such as the name of the vendor, date of transaction, consideration paid for transactions, etc.
Under the ‘Qualified Invoice Retention System’ (effective 1 October 2023), in addition to similar bookkeeping and invoice retention requirements, a taxpayer will only be able to claim an input JCT credit from a JCT-registered vendor.
To become a JCT-registered vendor and issue a qualified invoice, vendors must submit the appropriate application to the National Tax Agency (NTA). JCT exempt entities will be ineligible to become a registered vendor.
The application for this registration will begin on October 1, 2021, and in order to become a registrant by 1 October 2023, the vendor should file the application with the relevant tax office no later than 31 March 2023. The NTA will publish a list of registered entities on its website.
VAT Executive Regulations published
The VAT Executive Regulations have been issued by the Oman Tax Authority ( Decision 53 of 2021 (in Arabic)) on 14 March 2021 – this will allow companies to properly prepare for the introduction of VAT in Oman, starting from 16 April 2021.
See here for further details.
Enhancements to e-invoicing system
Tax authorities in Indonesia previously released a new version of the electronic-based invoice invoice (Faktur Pajak or ‘FP’). This includes a pre-populated feature to ease taxpayers’ workflow in carrying out VAT compliance. The pre-populated feature under eFaktur version 3.0 covers input VAT from normal VAT Invoices and import declaration documents. These documents will automatically appear in the eFaktur system under the respective tax period. Taxpayers are no longer required to input and validate the information manually.
Public consultation e-Invoicing B2B
Slovakia’s e-invoicing initiative is currently in the process of consultations by the authorities of the Slovak Financial Directorate. Based on the authorities’ preliminary statements about e-invoicing, Slovakia is planning to introduce real-time invoice reporting (RTIR) which should be mandatory for all transactions over time. The aim of this initiative is to reduce administrative burdens on the side of tax subjects (e.g. to reduce obligatory VAT reporting) and to obtain real-time invoicing data on the side of tax authorities and use it for tax control purposes.
Mandatory e-invoicing will be introduced gradually. The first phase will (probably during 2021) cover G2G and B2G transactions. In a later stage, (the expectation is in 2022) for B2B and B2C transactions will come under the legislation.
As we have seen in other countries, applying mandatory e-invoicing into practice requires a significant amount of new regulation and legislation.
Draft resolution published by GAZT: open for public consultation
We have now been aware for some time that KSA is moving towards mandatory e-invoicing.
On 18 March 2021, GAZT published a draft resolution – again for public consultation – on the requirements. The draft resolution includes technical specifications and procedures for implementing the provisions of the E-Invoicing Regulation. The resolution aims to specify the business and technical requirements that will need to be adhered to as Saudi Arabia moves toward e-invoicing.
GAZT encourages businesses start assessing how the e-invoicing regulations will impact their systems and processes and commence the planning work to successfully implement e-invoicing by the deadline of December 4th, 2021.
An English translation of the draft resolution can be found here.
India extends the scope of the invoice reporting mandate from April 1, 2021
The Indian Central Board of Indirect Taxes and Customs (CBIC) has changed the revenue threshold that determines whether companies are required to report invoice data to the Invoice Registration Portal (IRP).
Via Notification No. 05/2021–Central Tax, the Central Board has lowered the threshold to Rs 50 Cr ($6.8m). The revenue threshold applies to aggregated revenues on PAN-level (Permanent Account Number) and will therefore apply to all GSTINs under the Permanent Account Number.
The change will be effective from April 1, 2021.
The announcement has been published in the Gazette of India on 8 March 2021: http://egazette.nic.in/WriteReadData/2021/225713.pdf
Click here to learn more about the Indian mandate.
China expands its e-invoicing pilot program
In December, China’s State Taxation Administration (STA) announced further expansion of the trial programme (Pilot) to 38 regions in the country. The pilot enables specific Chinese taxpayers to issue VAT special electronic invoices on voluntary basis. The pilot project started in September 2020.
Poland and Brexit - waiver of requirement of fiscal representative for the UK and Norway
The Polish Ministry of Finance published draft tax legislation on 12th February, under which UK and Norwegian based companies will not be obliged to appoint fiscal representation in Poland.
This important decision is mainly due to adequate agreements for mutual assistance being in place between countries. These agreements arrange administrative cooperation and collaboration to fight against VAT fraud. The legislation comes into force retrospectively with an effective date of January 1, 2021.
Fast progress on “structured invoices’ programme
For some time now, Poland has been stating that it would implement their continuous tax controls regulation ahead of France. They seem to be making good progress.
The Polish Government Legislation Centre has published a draft law amending the VAT Act, introducing a model of ‘structured invoices’ to the local VAT system. The draft law is available for public consultation for a very short period in February. The expectation is that the law will come into force by October 1, 2021. It should be noted that, initially, invoice issuance and reception via the national e-invoicing platform (Krajowy System e-Faktur (KSeF) or National e-Invoicing System (NeIS)), will be voluntary and businesses can continue to use current formats, including paper, PDF and other e-invoicing formats. However, the government will reward early adapted with faster VAT returns. The system is expected to become mandatory by 2023.
NOTE: The Polish KSeF system strongly resembles the Italian Sistema di Interscambio – invoice issuance and reception will take place in the platform and an archiving function is available from the system.
Note that the draft law leaves room for more detailed regulation to be added by ministerial decree.
KSA publishes its final e-invoicing regulation
As we reported before, Saudi Arabia is well on its way to mandatory electronic invoicing, only 4 years after the introduction of VAT in the Kingdom.
In autumn of 2020, KSA completed their public consultation regarding the planned e-invoicing regulation, followed by the approval of the GAZT board of directors of the final version of the regulations. This final version has been published in the official Saudi gazette on 4 December 2020 and entered into force immediately on the same day it was published. The regulations contain the framework of the e-invoicing mechanism GAZT is anticipating to apply and the expectation is that businesses in scope of the regulation will be able to comply by 4 December 2021.
While the timeline is very tight, not all details are clear, and it is expected that further details will follow prior to the effective date to help taxpayers comply with the new rules.
This is a tight timeline and businesses in the Kingdom should begin their implementations early in 2021. We see this as a unique opportunity for organisations to leverage digital technology and benefit from more streamlined tax operations.
Electronic Fiscal Receipting and Invoicing requirements
On 1 January 2021, the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) entered into force in Uganda. Businesses use EFRIS to their issuance of receipts and invoices for tax purposes.
As of 1 January 2021, a person who conducts business and is registered for VAT purposes is required to issue an e-invoice or receipt for any sales transaction regardless of whether the sales transaction is subject to VAT at a standard rate, zero rate or VAT exempt.
Slovakia announces an e-invoicing/real-time reporting system
In a recent press release the Slovakian Tax authorities pointed at a new draft law on sending data to the Financial Administration. Please follow the link here for the full text.
The intention of the draft law is to introduce the obligation for all business entities to issue an invoice for each business transaction within a certain period of time. At the same time, invoice pre-clearance is also foreseen: the obligation to send specific invoice data to the Financial Administration before the final version of the invoice is prepared and sent to the buyer. Taxpayers can fulfil their invoice reporting obligations in various ways: using an e-invoicing service provider; directly from their accounting software/ERP using a certified communication method or using a free government portal. There will also be reporting obligations on the buyer.
Currently there is no more information or technical details available. We will continue to monitor Slovakia’s progress and report these in our upcoming e-invoicing updates.
Temporary introduction of 0% VAT rate on vaccines
From Jan 1, 2021 until Dec 31, 2022 a 0% VAT rate will be applicable on vaccines.
Extension of reduced VAT rate
Greece has confirmed a further extension of the reduced VAT rate of 13% for cinemas, drinks and catering services, public transport and packaged holidays until 31 October 2021.
GST changes in Singapore Budget 2021
The Singaporean government has decided that the planned GST increase from 7% to 9% will not take place in 2021. The Finance Minister has however emphasised base GST will need to be raised at some point between 2022 and 2025. This is mainly to support government revenue to fund rising healthcare expenditure.
Greece MyData: delayed again
Greece’s e-Invoicing and e-Books mandate, which was supposed to have started on January 1, 2020, has been delayed again. Under pressure of the COVID 19 economic impacts and following requests from the business community, Greece’s AADE has decided to postpone the compulsory usage of the MyData e-Invoicing and e-Books platform until April 2021. Also, the platform is still undergoing development. We are currently analysing the impact of this delay as companies can still voluntarily submit transactional data to the platform.
VAT Rates Germany: temporary VAT reductions now rolled back
As part of its economic stimulus package, Germany lowered their VAT rates in July 2020 to 16% for the base rate and 5% for the reduced rate. This tax measure ended on 31 December 2020, as planned.
From 1 January 2021 the “old” VAT rates (19% base rate and 7% reduced rate) will apply as before July 2020. What does this mean:
• Invoices for goods and services with a time of supply (tax point) after 31 December 2020 must use the original VAT rates (19% and 7%)
• Invoices for goods and services with a tax point before January 1, 2021, must still use the July 2020 rates: 16% and 5%
Click here to learn more about the German mandate.
Special VAT e-Fapiao pilot extension
China’s e-invoicing pilot for Special VAT invoices is gaining traction quickly. The pilot was already live in 11 regions and has now been extended into another 25 regions. The project is somewhat delayed; e-invoicing is now expected to be available countrywide in the course of 2021. (The original plan was to have full country coverage by the end of 2020).
The Special VAT e-invoicing initiative aims to replace the existing Fapiao process, which is fully paper-based, and which requires taxpayers to use government pre-numbered invoices and visit local tax offices to produce such invoices.
Businesses are typically selected and certified for the pilot. Certified companies use the State “Public Service Platform of Electronic VAT Invoice” using their ‘U Key’ login terminal, which is a hardware component provided by local tax offices. On the Public Service Platform taxpayers request approval for the type and number of sales invoices they will issue in a certain period. The Public Platform is also used for the permanent storage of invoices. Invoice corrections (credit notes) can also be issued using the Service Platform (using red-lined special Fapiaos).
HMRC VAT identification validation checker
As the VIES VAT identification check will no longer be available in UK post Brexit, HMRC has launched its own VAT identification validation checker. To access the tool, please follow this link.
Jumping on the bandwagon?
The Romanian Finance Minister has announced that the Romanian government intends to introduce an e-invoicing system. Currently, there is no more information available. We will monitor the announcements and report on further progress in the upcoming compliance updates.
Looking at implementing e-invoicing via the National System of e-invoices (KSeF)
The Polish Ministry of Finance (‘MoF’) is looking into amending the VAT act by introducing the possibility of issuing electronic invoices next to the current paper and electronic invoices, via KSeF – the National System of e-Invoices. Next to the business benefits of e-invoicing (such as cost reductions, better transparency, and shorter payment cycles), there will be further advantages to the taxpayer such as a reduction of the deadline for VAT refunds from 60 to 45 days. The project is planned to commence in the first quarter of 2021. However, it seems that this system will be moved to mandatory usage later in 2022.
Still on track for mandatory e-invoicing and VAT e-reporting
Last November 24, the French DGFiP presented its report to external stakeholders that details the road to widespread use and adoption of electronic invoicing in France and the obligation to report VAT electronically as of 2023.
At the beginning of 2021, a “Project Department” will be set up within the DGFiP. This department will lead the next steps. In collaboration with the AIFE, further consultations, organised in “Working Groups”, with stakeholders, will be happening during 2021 to further detail requirements, best practices, and support structure alignment with the needs of companies.
Mandatory electronic invoicing
As stated before in our earlier update, the Kingdom of Saudi Arabia is making fast progress with the introduction of compulsory e-invoicing. The electronic invoicing system aims to drive down shadow economy transactions and to fight commercial concealment.
The Saudi General Authority of Zakat and Tax approved the new electronic invoicing regulation on Friday 4 December 2020. The electronic billing regulation contains seven articles that regulate the mechanism for issuing and keeping electronic invoices for taxpayers. The regulation also stipulates the procedural rules and timings, as well as further provisions, procedures and persons subject to these. Mandatory issuance of electronic invoices will commence from 4 December 2021; followed by mandatory invoice reporting to the government in June 2022.
For further information, please review the English version of the e-invoicing Regulations and FAQs as recently released by GAZT.
Postponement of single document code ('ATCUD')
In decree 195/202, the Portuguese Government announced the requirement for businesses to include a single document code (ACTUD) on invoices and other documents relevant for taxation by January 2021. This has now been delayed until 2022.
However, Ministerial Order nº 412/2020.XXI stipulates that the Portuguese Tax Authority should strengthen support for taxpayers in meeting the obligation to include a QR Code (Quick Response Code) on invoices from 01/01/2021.
Please follow the link here for the technical specifications of the QR Code.
Draft 2021 Budget Law drives changes to the e-invoicing mandate from 2022
The (draft) 2021 Budget Law will introduce changes to the Italian e-invoicing requirements, which will -in principle- come into effect from 2022:
- Obligation to transmit transactions with non-residents (entities not established for VAT) to the Sistema di Interscambio (SdI). This in fact means that they cross-border reporting (Esterometro) will no longer be in use.
- The FATTURA XML may see new fields and additional checks for supplies with declaration of intent.
Norway: Reduced VAT rate extension
Norway has extended the 6% Reduced VAT Rate beyond October 31. A new end date has not yet been established.
Spain - Extension emergency zero-rate
In April 20’, the Spanish Government introduced a temporary zero VAT rate for purchases and imports by public entities, hospitals and other not-for profit organisations of surgical masks and sanitary products. This was due to expire on July 31 but has been extended to 31 October 2020 working retrospectively from the date the original derogation expired.
Ireland: Reduction in VAT Rate for hospitality sector
Ireland will temporarily reduce the VAT rate for the hospitality sector (hotels, restaurants, bars, etc.) from 13.5% to 9%. The change is effective from November 1, 2020 until 31 December 2021.
Poland; full steam ahead with B2B invoice clearance
The Polish Ministry of Finance plans to roll out a B2B VAT invoice clearance mandate (like the Italian SdI model) expected at the latest in 2022, with some sources citing an implementation closer to mid-2021.
Greece delay Oct 1st invoice registration mandate
The Greek Government did an about turn on Oct 1st, the day of the mandate, to extend the voluntary period for invoice registration to January 1st 2021 citing economic impact of COVID and business readiness.
Hungary introduces a new file structure for online invoice data reporting
The Hungarian tax authority recently published a new file structure that will be the basis for online invoice data reporting in 2021. The new file structure is XSD version 3.0.
USA explores the possibilities for standardised e-invoicing
The American Business Payments Coalition (BPC) is leading a 3-year effort to explore the feasibility of developing and implementing a standard framework for ubiquitous B2B electronic invoicing for the US market.
The UK extends its reduction of the VAT rate for tourism and hospitality
The temporary VAT rate reduction to 15% VAT for the tourism and hospitality sectors will be extended up to the end of March 2021.
Kingdom of Saudi Arabia; on its way to an e-invoicing mandate
On the 17th September Saudi’s General Authority for Zakat and Taxes recently published a draft e-invoicing regulation and have sought consultation with industry experts to provide input into their proposals. Tungsten is actively engaged in the consultation process which ends on October 14th.
Kingdom of Saudi Arabia (KSA) announces a base-rate VAT increase
Kingdom of Saudi Arabia (KSA) announces a base-rate VAT increase from 5% to 15%: KSA’s Minister of Finance, Mr. Al Jadaan, announced starting from 1 July 2020 the VAT rate will increase from 5% to 15%.
India delays invoice mandate
The Indian government announced its invoice registration mandate late 2019, putting forward a very challenging go-live date of 1 April 2020 – they are now reporting they will be postponing the effective date of the mandate until 1 October 2020.
Click here to learn more about the Indian mandate.
China moves forward with plans to improve VAT law functionality
The Chinese State Tax Administration (STA) provided a public update on multiple tax-related topics, including a development plan for electronic special VAT invoices.
Poland marches forward with November deadline for B2G e-invoicing
Poland is taking the next step in the introduction of a national digital platform supporting its main public services with the introduction of mandatory e-invoicing for B2G transactions.
Germany's B2G e-invoicing approaches second phase
Germany has announced its schedule for mandatory B2G e-Invoicing. As April approaches, the second phase will come into action for the regional and communal levels. Tungsten is here to help – we can support your invoice delivery of the XRechung through our PEPPOL connection.
Click here to learn more about the German mandate.
Greece announce e-invoicing plans to improve their national VAT gap
In a bid to fight indirect tax evasion, the Greek government is adopting an invoice clearance model that is similar to Mexico’s current setup.
Further information on the Indian mandate
From 1st April 2020, all businesses with a turnover of at least Rs.100 Crore will be obliged to start using the IRP.
Click here to learn more about the Indian mandate.
Unilever and Tungsten obtain CAS usage permit in the Philippines
After several years of collaboration, we can officially announce that a usage permit between Unilever and Tungsten was finally granted in early January 2020.
Indian e-invoicing deadline confirmed for April 2020
It has now been confirmed that India will have launched their Invoice Registration Portal in early 2020, which will see mandatory usage for medium and large taxpayers from April 2020.
Click here to learn more about the Indian mandate.
Italy extends fuel suppliers deadline for B2B e-invoicing
The Italian government has announced that suppliers of fuel must begin sending B2B e-invoices by 1 January 2019, along with all other companies with an Italian VAT number.
Spain extends B2G e-invoicing mandate
Spain has announced an extension of the existing B2G mandate to subcontractors involved in public contracts/tenders, effective from 1 July 2018.
Greece to mandate B2B e-invoicing
The Independent Authority of Public Revenue (Α.Α.Δ.Ε.) announced its intention in introduce mandatory e-invoicing and e-maintenance of accounting books as of 1 January 2020.
EU permits derogation for Italian B2B e-invoicing mandate
The European Commission has permitted a derogation to articles 218 and 232 of Directive 2006/112/EC for Italy, as their B2B mandate was in direct conflict to these. The Italian mandate can now be rolled out without contravening any EU laws.
South Africa changes VAT rates
Standard VAT rate is increased from 14% to 15% from 1 April 2018.
VAT implementation in Qatar
In February 2016 the Gulf Cooperation Council (GCC) announced that Value-Added Tax (VAT) would be rolled out throughout the Gulf States, starting in January 2018.
Germany mandates B2G e-invoicing
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically by 27 November 2018.
Click here to learn more about the German mandate.
United Arab Emirates implements VAT
In February 2016 the Gulf Cooperation Council (GCC) announced that Value-Added Tax (VAT) would be rolled out throughout the Gulf States, starting in January 2018.
Kingdom of Saudi Arabia implements VAT
In February 2016 the Gulf Cooperation Council (GCC) announced that Value-Added Tax (VAT) would be rolled out throughout the Gulf States, starting in January 2018.
Sweden implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
Italy mandates B2B e-invoicing
The Italian government has confirmed that B2B e-invoicing will become mandatory from 1 January 2019 (in some cases, such as suppliers of motor fuel oil or subcontractors employed by companies engaged in work with a public administration, the mandate will apply from July 2018).
Poland delays VAT Act changes until July 2018
Fundamental changes to the VAT Act were due to come into force on 1 January 2018. However, this has been postponed until July 2018.
Romania implements VAT Split Payment
The implementation of a mandatory VAT Split Payment law came into force on 1 January 2018. The system has been voluntary since 1 October 2017.
Hungary announces electronic reporting requirement for B2B domestic sales
The Hungarian Government published the latest draft decree detailing changes regarding VAT reporting that will come into effect on 1 July 2018.
Mexico mandates CFDi version 3.3
Mexico CFDi 3.3 was introduced on 1 July 2017 and becomes mandatory from today. The new version includes changes in structure, data format, catalogues, as well as invalidations and calculation rules such as the following.
France implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
Norway implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
France mandates B2G e-invoicing
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically by 27 November 2018.
Italy implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
Denmark implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
Spain implements EU VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.
United States mandates B2G e-invoicing
United States federal agencies are expected to adopt electronic invoicing for B2G procurement by the end of fiscal year 2018.
European Union VAT Directive 55
The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically, or at least to have a defined for how they will do so, by 27 November 2018.