Spain's Evolving E-Invoicing Journey: 7 Key Points

Spain is joining the charge in transforming traditional invoicing methods into a streamlined, digital future. After several years of experience in B2G electronic invoicing (e-invoicing), the country is now embracing mandatory e-invoicing in the B2B arena and finance professionals find themselves at the forefront of this exciting revolution. This transition from traditional paper-based invoices to electronic invoicing, is driven by regulatory initiatives aimed at enhancing efficiency, reducing fraud, and fostering business growth. In this blog, we'll explore the latest developments, platforms, and impending obligations in Spain's evolving e-invoicing realm.

Background: The Evolution of E-Invoicing in Spain

Spain initiated its journey into electronic invoicing in 2015, with the mandate for Public Administration (B2G) entities. Since then, the landscape has evolved, gradually extending electronic invoicing to the private sector (B2B).

E-Invoicing Platforms and Solutions

The Spanish government provides free e-invoicing platforms like FACe for B2G transactions, with optional usage for regional and local governments. Introduced in 2018, FACeB2B facilitates B2B electronic invoicing. The diversity in e-invoicing solutions enables businesses to choose providers that best suit their needs.

Towards Mandatory E-Invoicing in B2B

Spain's commitment to digitalization takes a significant step forward with the draft Law for the Creation and Growth of Companies, aiming to make B2B e-invoicing mandatory. Approved in September 2022 (Law 18/2022), this draft law sets the stage for a gradual implementation.

Scope of the Upcoming E-Invoicing Obligation

The upcoming e-invoicing mandate specifically targets domestic B2B transactions. Key aspects include:

• Exemption for Cross-Border B2B Transactions: Cross-border B2B transactions involving a party not established or lacking a permanent establishment in Spain will be exempt from the e-invoicing obligation.
• Exemption for Specific Transactions: The e-invoicing requirement does not extend to transactions documented with simplified invoices or those not necessitating documentation with a traditional invoice, such as Business-to-Consumer (B2C) transactions.

Timelines:

Obligation to receive electronic invoices: B2B Gradual rollout, similar timeline as for Issuing invoices

Obligation to issue electronic invoices: B2B Gradual rollout

Large companies: Foreseen July 2025 (12 months after approval of Draft Royal Decree) For businesses with total revenues of 8 million Euros or more a year.

Rest of taxpayers: Foreseen July 2026 (24 months after approval of Draft Royal Decree)

Obligation to transmit e-reporting information: N/A

Large companies: N/A 

Technical Specifications and Implementation Phases

Understanding the timeline for implementing the e-invoicing mandate is pivotal for businesses to prepare for compliance. Anticipated milestones include:

• Publication of e-Invoicing Regulations: The B2B regulations are yet to be published in the Official State Gazette. The Royal Decree will become enforceable twelve months after its publication in the Official State Gazette.
• Coverage of Large Taxpayers: After the initial 12 months from the publication of the final regulations, the e-invoicing mandate will cover large taxpayers, defined by a turnover exceeding EUR 8 million.
• Applicability to All Taxpayers: Subsequent to an additional 12-month period, the e-invoicing obligation will extend to encompass all other taxpayers. In other words, two years from the publication of the final regulations, the e-invoicing obligations will be extended to all other taxpayers
• Expected Entry into Force - Summer 2025: While an exact date for the entry into force remains indeterminate, it is anticipated that the e-invoicing mandate will likely take effect in summer 2025.
  
  

Compliance Obligations and Sanctions

The new e-invoicing mandate imposes obligations on companies, including issuing electronic invoices, facilitating recipient access, and maintaining records for four years. Non-compliance may result in fines, with repeat offenders facing increased penalties.

What's Next for Finance Professionals

Finance professionals in Spain must stay abreast of regulatory developments, prepare for the mandatory e-invoicing regime, and ensure compliance with the evolving requirements. Monitoring the implementation timeline, technical specifications, and potential changes is crucial.

Key Considerations for Finance Professionals

As Spain transitions to mandatory e-invoicing, finance professionals play a crucial role in adapting to the evolving landscape and guiding their companies to a new level of finance automation. Staying informed, preparing for compliance, and leveraging available resources are essential for a smooth transition to a more digitally-driven invoicing environment.

Partnering with Basware, with our 40 years of experience in Networked AP Automation and e-invoicing, ensures you’re well-equipped to succeed in this new era of financial transactions.

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