In April 2018, Greece's Ministry of Finance announced its intention to implement mandatory e-invoicing and e-bookkeeping for all Greek entrepreneurs from January 1 2020.
The framework notes that invoices will be issued mandatorily and electronically. After the electronic approval of e-invoices by the recipient, their data will be transmitted in real-time to the electronic system of the Ministry of Finance (Taxisnet), ultimately updating the e-books of each entrepreneur.
The tax authorities will have, in real time, the recorded transactions, and the corresponding taxes (VAT, withholding tax (WHT), stamp duty) of each entrepreneur. As a result, the reconciliation of e-books with the submitted tax returns will be feasible during the year and not upon a future tax audit.
The expected benefits from this new framework is the fight against fraud and tax evasion, mainly through the reduction of fake invoice issuance, and the performance of more targeted tax audits on a timely basis. Moreover, the new framework is expected to leverage and accelerate digital, simplifying the invoice issuance process, and as a result, reducing the cost for entrepreneurs.
Development of e-invoicing and e-books
The Independent Public Revenue Authority (IPRA) had established a working group dealing with the implementation of this project in 2018. The main target of the working group was to consult with the stakeholders (i.e. entrepreneurs' representatives, software providers, accountants), and to make the necessary preparations for the system that would be tested in 2019, before going live in 2020.
Up to now, the relevant legislation has yet to be amended, and relevant guidelines have not been issued. The Governor of the IPRA announced recently that the technical preparation has been completed, and the system will gradually go live after May 2019.
Based on relevant publications, the new process will initially apply to entrepreneurs who keep single-entry accounting books, essentially individuals or personal companies with turnover less that €1.5 million ($1.68 million).
During the first stage, given that mandatory e-invoicing has not been implemented yet, the e-books will be updated by the entrepreneurs by uploading the relevant information in Taxisnet.
Given that the technical preparation has been completed, the e-invoicing and e-bookkeeping processes will be mandatory for all entrepreneurs. Corporations should adopt their enterprise resource planning (ERP) and amend their internal processes and tasks of people dealing with finance, tax and accounts payable/accounts receivable (AP/AR).
The new process may lead to simplification cost efficiencies in the long term, but the first stage of implementation assumes additional costs. As a result, the IPRA should ensure that the new process will not add unnecessary administrative burdens to taxpayers, the Taxisnet platform, and the service providers considering e-invoicing will be reliable and the process will comply with GDPR.
Moreover, it should examine the grant of incentives for early adopters, the elimination of existing tax compliance reporting, the reduction of the statute of limitation for the performance of a tax audit, and finally, the reduction of tax rates.
The implementation of e-invoicing and e-bookkeeping can be a win-win situation, like in Italy and Portugal, provided it is designed properly and enough time is granted to entrepreneurs to adopt the new process.