General e-invoicing obligations to apply to B2B transactions
A law published in Spain’s official gazette on 29 September 2022 (Law on Business Creation and Growth, commonly known as the “Create and Grow Law”) includes the introduction of general electronic invoicing requirements for business-to-business (B2B) transactions and transactions involving individual entrepreneurs (for prior coverage, see the article in the January 2022 issue of Indirect Tax News). The law—which has been well received—is one of the most important components of Spain’s overall Recovery Plan, which aims to stimulate economic/financial recovery from the COVID-19 pandemic, develop and promote business activities through regulatory improvements and the reduction of regulatory obstacles, and provide financial support for business growth.
The law includes measures to help combat delinquency in commercial transactions, which is one of the main causes of liquidity and profitability problems faced by many Spanish companies, especially small and medium-sized enterprises. The mandatory use of electronic invoicing in B2B transactions and transactions involving self-employed individuals is seen by the government as a tool to address this problem and encourage the digitalisation of businesses. Currently, e-invoicing is required only for transactions involving public sector entities and is voluntary in the case of commercial transactions between companies. Under the new rules, all businesses and self-employed individuals will have to issue and send e-invoices (with prescribed wording) on their commercial transactions with other businesses and self-employed individuals and facilitate the access, viewing, downloading, and printing of e-invoices by recipients. Penalties may be imposed for failure to comply.
Electronic invoicing will ensure greater traceability and control of payments and provide information on various relationships in the private sector. It also will reduce errors and produce reliable and transparent information on payment terms, which is essential to the government’s efforts to lessen delinquency. Additionally, affected businesses will be required to ensure that the computer or electronic systems and software programs used for the invoicing process are sufficiently robust to guarantee the integrity, accessibility, legibility, traceability and preservation of the records and that the records may not be altered.
The law (including the mandatory e-invoicing rules) will become effective one year after regulations are published for businesses with annual turnover exceeding EUR 8 million and two years after publication for all other entrepreneurs and companies.
Alvaro Gómez Elvira
Cristina Sanchez Gomez