In September 2022, the Spanish legislator published a law to promote business creation and growth. This law – which is not a tax regulation, much less a VAT regulation – indicated that the intention was to make electronic invoicing between businesses or professionals compulsory. Not much more was said officially on the matter, which caused a considerable stir in Spain. There was a message of an imminent new invoicing regulation, but there was no regulation to explain the details of this new obligation.
In June 2023, the draft of the long-awaited regulation was published. Although it is in the public consultation phase, so it cannot be ruled out that some modifications may be introduced, the publication of the document means we are beginning to understand what the Spanish legislator's intentions are and what the scope of application of this new electronic invoicing obligation is.
Key points in the draft regulation
Firstly, everything seems to indicate that the obligation will affect invoicing between businesses or professionals (B2B) when both are established or domiciled in the Spanish territory. In other words, if the issuer or the recipient of the invoice is not a Spanish entity or professional, the new electronic invoicing obligation will not apply. The meaning of this is that, as the system is conceived, invoices will be made accessible on various Spanish public and private platforms. Forcing non-resident entities in Spain to access them seems to be an unnecessary complication.
The new electronic invoicing obligation will not apply to ‘simplified invoices’. It is important to mention that this type of invoice is common in B2C transactions, but in Spain it is also possible to issue them in B2B transactions, provided they do not exceed certain amounts.
In relation to the aforementioned invoicing platforms, their task will be to issue invoices for private platforms that wish to offer this service, but, above all, to exchange them. The platforms must be places that function as a repository of invoices, that can be interconnected among themselves and that can be accessed in order to, in turn, access electronic invoices. This exchange work will also be available through a public platform provided by the Spanish administration. In the case of using a private invoicing platform, a copy of the invoice must always be sent to the public platform.
With regard to the electronic invoice format, and without going into too many technical details, it seems that the formats accepted will be XML, UBL, EDIFACT messages and, what seems to be the administration's preferred option, the ‘Facturae’ system, which is an electronic invoicing system that has existed in Spain for years for invoices issued to public bodies (B2G). The Spanish administration has the infrastructure for this invoice format perfectly in place, and for this reason, this is its preferred system and mandatory in using the public platform. In any case, any e-invoice provider must be able to transform invoices from one format to another.
The Spanish legislator adds an additional requirement, which is the electronic signature of each and every invoice. This seems to be a legislative excess that will most likely have no place in the harmonised definition of electronic invoicing that we will see with the European Commission's VAT in the Digital Age (ViDA) proposal. It is therefore not out of the question that the electronic signature obligation will ultimately be eliminated. However, for the time being, it seems to be a mandatory requirement.
Invoice recipients will have to report the status of their invoices. To this end, the following mandatory statuses are proposed: accepted, rejected and paid, with the possibility of adding other statuses, such as acceptances or partial payments, if so desired.
The mandatory content of invoices remains unchanged. The minimum content of an invoice remains the same, notwithstanding the fact that the parties may voluntarily agree to add certain specifications.
Next steps
As for the entry into force of this new obligation, this will take place, for businesses and professionals whose annual turnover exceeds €8 million (approximately $8.7 million), one year after the regulation has been approved, and for other businesses and professionals, two years after the approval.
At the moment we only have a draft of the regulatory development, which, moreover, is in the process of public consultation. In the best-case scenario, entry into force would take place at the end of 2024 and 2025, respectively. However, considering that Spain is immersed in a national electoral process, it is more than likely that these deadlines will be delayed, which would bring them close to those envisaged by the European Commission for the entry into force of ViDA, provided that they are not delayed either, which cannot be ruled out.
Although some doubts about the content of the electronic invoicing obligation in Spain have been cleared up, the timetable for its entry into force remains uncertain.
