The proliferation of e-invoicing mandates
E-invoicing mandates continue proliferation as governments attempt to plug budget black holes. With most mandates, the onus tends to fall on the supplier. For some mandates, however, buyers must report transaction records to government portals.
Tungsten Network is ready to comply with many mandates due to go live. Tungsten offers strategic operational models to deliver the most value for customers when new e-mandates emerge. Below, we summarise the latest information on upcoming e-invoicing mandates.
What is an e-invoicing mandate? Why are governments issuing them?
An e-invoicing mandate is a government ruling stating that payments (usually relating to businesses and their suppliers) must be made via electronic means. After the stated deadlines, business payments submitted through non-electronic systems will not be acceptable.
Though exact rulings differ depending on the tax authority, most e-invoicing mandates include regulations pertaining to direct payment to governments, also known as B2G or Business-to-Government invoices. These have immediate tax implications for companies.
If the approach seems a little extreme, it’s worth bearing in mind that governments regularly miss out on expected tax receipts due to inefficient processes. In 2019 the EU lost approximately €134 bn against expected tax revenues. The issue stretches far beyond EU borders though, with countries including Saudi Arabia and Mexico also announcing mandates.
We’ve been keeping a close eye on developments in the space, especially as key jurisdictions have updated or delayed e-invoicing mandate release schedules in light of the pandemic. Read on for the latest on five jurisdictions with new e-invoicing mandates.
Overview of pending mandates
Kingdom of Saudi Arabia
The Saudi government has split its e-invoicing rollout into two phases. The first phase went live on December 4th, 2021, stipulating that invoices must be sent in a structured file format and archived locally in Saudi.
Phase 2 is set to become mandatory on January 1st, 2023, at which time supplier invoices will require a digital signature and must be cleared via the Saudi Government ZACTA platform. At this stage, QR codes and Universal Identification numbers will be applied to each invoice before they can be sent on to the buyer.
As of July 2022, the Italian government e-invoicing mandate impacts both buyers and suppliers, especially in terms of reporting. Invoices from Italian suppliers sent to non-Italian buyers, as well as invoices received by Italian buyers from non-Italian suppliers, must be reported to the Sistema di Interscambio (SdI), which is Italy’s invoice exchange platform.
Previously this reporting was done via the Estermetro platform. As of January 2022, cross border invoices are now sent and received must be reported to the SdI in the same format as domestic B2B invoices (FatturaPA XML).
The Mexican government initially announced an e-invoicing mandate scheduled for October 1st, 2021. The roll out was subsequently delayed to January 2022. Taxpayers operating in the Mexican market must use CFDI 4.0 to submit their electronic invoices.
The Mexican government now requires suppliers to include a Carte a Porte transportation note within the CFDI (tax invoice).
As a significant market in Europe, multinational businesses can’t afford to run afoul of the incoming French e-invoicing mandate.
The French government has also split its roll out into phases. Phase 1 was due to launch on 1st of January, 2023, but despite good progress, the mandate was pushed back. It will now kick in on 24th July, 2024.
E-invoices will need to be submitted through the Chorus Pro platform. All Tungsten Network users are already connected to this system. Additionally, in 2017, Tungsten participated in the French pilot project, so users can rest assured we have plenty of experience delivering compliance services for the future French market.
The first phase of the Greek government roll out launched in July 2021, after a number of delays. All major enterprises are now required to receive e-invoices when the mandatory transmission of business documents through the MyData platform. The following were expected to comply from the launch date:
- Businesses with double-entry accounting books with a turnover of over €50.000
- Businesses with single-entry accounting books with a turnover of over €100.000
From the 1st November 2021, all other companies were required to submit their invoices to the MyData platform.
Getting ahead of e-invoicing mandate deadlines
Preparation is key if businesses hope to avoid being stung by e-invoicing mandates. As government mandates increase in number, businesses must find ways to scale finance processes to cope with additional complexity. This effort can also help propel transformation efforts toward digitisation and automation. Using systems to manage ongoing compliance is a smart way to ensure your finance functions can succeed whatever the future holds.
Discover more about e-invoicing mandates with Tungsten Network
We invite our customers to engage with our account managers to discuss the volumes of invoices delivered through Tungsten Network. We have a dedicated team working to keep you up-to-date with compliance, so you can focus on what you do best, wherever you operate.