2022 – Compliance, Compliance, Connectivity, Compliance
The global trend for the mandatory use of e-Invoicing is picking up pace. The adoption of e-Invoicing goes something like this:
- Big businesses implement it, forcing suppliers to conform to EDI or digital invoicing
- Governments follow suit and enforce mandatory B2G e-Invoicing to save its administration time and money
- Tax authorities spot the opportunity to increase VAT compliance and monitor trade-in near real-time – they can implement the ‘Post Audit’ model (businesses must send tax reports on-demand or periodically, including records of all trades in the form of e-Invoices), or they impose the harsher regime of the ‘CTC’ or ‘Clearance’ model in which invoices must either be pre-approved and stamped with a unique identifier by the tax authority before being sent to the buyer. Alternatively, where the tax authority is sent a copy of all invoices sent electronically, thus maintaining a record of transactions on both sides of the buyer-supplier relationship.
Having started in South America, the trend has swept the world. Over 50 countries have declared the intention to impose further mandates. You cannot run. You cannot hide: e-Invoicing is here to stay and evolve. The following is purely a snapshot of the changes to expect, plan for and comply within 2022. If any of these poses you a challenge, get in touch, and we will help you succeed with ease: email firstname.lastname@example.org.
Starting Close to Home
As a UK based business, we have a significant number of customers based either in the UK or the USA. Increasingly, our customer base is sweeping out towards Australia and Africa. However, the EU remains our key territory, so the round-up will begin close to home in Europe, where the EU directive on e-Invoicing has been a significant factor affecting each country’s specific implementation of e-Invoicing.
From the 1st January 2022, the older XML formats previously used for e-Invoicing will no longer be supported. The tax authority will only support web interface versions 4.3, 5.0 and 6.0.
e-Invoicing is to be mandatory for all Business to Government sales. B2B transactions will come into scope in phases, and suppliers can send e-Invoices through the PEPPOL network. There are moderately different rules in different regions of Belgium.
Let’s start with something mild: not too exciting. Norway will make mandatory VAT reporting for businesses. The chosen format is SAF-T (Standard Audit File for Tax). The new tax return format is in play from the 1st January 2021. The requirement is for companies to adapt the way they currently submit tax returns to comply with the SAF-T format, which entails a change from 19 mandatory fields to 25. Not a stretch.
Portugal is on its way to a tighter VAT compliance model. For 2022, the QR code and ACTUD code will be enforceable and small businesses will need to be on board with e-Invoicing.
Not so much of an enforced change but warning of such: Poland’s government is publishing new rules for a national e-Invoicing system.
Catching up with the rest of Europe, Cyprus will introduce mandatory e-Invoicing for all B2G transactions. There is no sign of B2B e-Invoicing being in scope for the near future.
e-Invoices will be mandatory from July 2022 for all retailers. The Italian tax authority has published an updated guide for e-Invoicing
Again, like Cyprus, Slovakia is catching up and is due to introduce a bill that mandates e-Invoicing for B2g trades.
Further afield, Panama is expected to make e-Invoicing mandatory for B2G transactions. This follows a pilot programme carried out during 2021.
Another country that has run a pilot programme using e-Invoicing is due to publish a bill in April 2022. The Philippines is targeting its top taxpayers for mandatory reporting.
The existing tax portal is being replaced in 2022, and every VAT taxpayer must authenticate their identity on the tax portal with an aeHerkenning identity key.
Following another pilot study, Vietnam is likely to announce that all B2B credit purchases must be conducted using e-Invoicing from April 2022.
Like Australia and Singapore, Japan has chosen somewhat late to the party to get on board with PEPPOL. The Japan Digital Agency will be the new authority on the use of PEPPOL both for trades inside Japan and with other countries that use the PEPPOL network.
There is, in fact, no end to the raft of changes that will pan out across the world in respect of e-Invoicing. For businesses everywhere, the challenges remain those of compliance, connectivity and responsiveness. Whatever solution a corporation trades globally has will likely need to be reviewed next year as more changes get inked into the global compliance calendar.
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