Digitalisation is at the heart of Spain’s economic and fiscal policies, an example of which are the various regulatory projects that the government has been working on over the last decade to implement mandatory electronic invoicing in business-to-business (B2B) relations.
In particular, the definitive impetus came, on the one hand, with the implementation in 2017 of the Immediate Supply of Value Added Tax Information (hereinafter the “SII-VAT” (Suministro Inmediato de Información del Impuesto sobre el Valor Añadido)) and, on the other hand, with Law 18/2022, of 28 September, on the creation and growth of companies (hereinafter the “LCC” (Ley Crea y Crece), which resulted in the creation of the general regulatory framework for this transition.
However, in recent months the regulatory development of these draft regulations has not progressed as planned, which means a delay in the entry into force and implementation of mandatory electronic invoicing in B2B relations. Below, we will analyse what this delay means for legal obligations in the area of electronic invoicing.
LCC
The LCC already established the obligation for entrepreneurs and professionals to issue, send and receive electronic invoices in their business relations with other entrepreneurs and professionals. However, the entry into force of this obligation was subject to the approval of its regulatory development, so that entrepreneurs and professionals would have a reasonable period of time to adapt their operations to the new digital invoicing requirements.
Specifically, the LCC established, depending on the level of turnover, the following deadlines from which the electronic invoicing obligation would be enforceable:
- A period of one year from the approval of the regulatory development, for companies and professionals with an annual turnover of more than eight (8) million euros.
- A period of two years from the approval of the regulatory development, for all other entrepreneurs and professionals.
As of today, we are still waiting for this regulatory development, and there is no sign that it will happen soon. As a result, the obligation on entrepreneurs and professionals to issue electronic invoices has once again been postponed.
This delay may offer respite to some entrepreneurs who were not yet prepared for its implementation, however, this measure has been announced for years, and, sooner rather than later, it will arrive. Therefore, for the vast majority of entrepreneurs, these delays by the legislator, which are becoming more and more common, only generate confusion and uncertainty in the business sector. An increasingly regulated sector, which is forced to make constant investments in order to meet the government’s demands, which are delayed or never arrive, and consequently end up being unnecessary or obsolete.
SII-IVA – Verifiable Invoice Issuing System or Sistema Veri*factu
The implementation of the SII-VAT in 2017 was complemented in 2021 with the amendment of General Tax Law 58/2003 by Law 11/2021, of 9 July, on measures to prevent and combat tax fraud, with the aim of putting an end to the use of computer programs that allow accounting manipulation, known as “dual-use software”. However, this regulation did not establish the requirements to be met by invoicing systems and software, pending regulatory development.
As usual, the regulatory development was postponed until Royal Decree 1007/2023 was approved and published at the end of 2023, which regulates invoicing systems, especially those that prevent accounting manipulation (hereinafter, the “Decree“). The Decree set out the requirements to be met by the systems and software, as well as the obligations of the manufacturers and marketers of these systems and software, and those of the entrepreneurs and professionals who use them.
The Decree introduced the need to use certified software in order to avoid the use of “dual-use software”. In particular, it introduced the Sistema Veri*factu, a voluntary system that will allow companies to send their invoicing records in advance to the Tax Agency. Although its use will not be mandatory initially, it is expected to be an essential tool in the future to ensure the traceability and verification of invoices issued. The adoption of this system will allow for greater transparency and control by the tax authorities, bringing companies’ invoicing records into line with the new regulatory requirements.
However, as with the electronic invoicing obligation of the LCC, the legislator made the entry into force of the requirements and obligations of this Decree subject to the approval of a ministerial order defining the definitive technical specifications of the invoicing programmes, and establishing the deadlines from which these requirements and obligations will be enforceable (hereinafter, the “Order“). Specifically, the Decree establishes the following deadlines:
- Nine months from the entry into force of the ministerial order, for software producers and marketers.
- From 1 July 2025, for users of such systems and software.
As of today, the Order is still pending approval, which means that, once again, the entry into force of the Decree is suspended. In this case it is even more serious than in the case above; since, logically, the entry into force for producers and marketers (9 months from the entry into force of the Order) must be prior to the entry into force for users (1 July 2025). In other words, 1 October was the deadline for the date of entry into force for users, scheduled for 1 July 2025, to remain feasible. As the Order has not been approved, the entry into force for users is now up in the air, generating, once again, uncertainty for companies and professionals, who cannot now foresee either approximately or exactly when they will have to comply with the obligations of the Decree.
Conclusions
Although the lack of regulatory development is slowing down the process, the transition to electronic invoicing in Spain is getting closer and closer. Spanish companies and professionals should therefore keep a close eye on legislative updates and prepare their invoicing systems in advance to comply with the new obligations both in terms of electronic invoicing and the use of certified software, as their implementation will be inevitable in the coming years, not only in Spain, but throughout the Eurozone.
It is therefore advisable for companies and professionals, especially those operating in B2B, to start reviewing their internal invoicing systems and to maintain close communication with their software suppliers in order to be alert and ensure compliance with the regulations that come into force.
Julio González
Vilá Abogados
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4 October 2024
