Compliance Category: Actualizaciones de los países

Tax incentives for companies who elect e-invoicing

In practice, we know that governments offer tax incentives as a means of encouraging e-invoicing – and more often than not, this has proven to be an effective measure in spawning e-invoicing across individual EU member States.  Greece has passed legislation on 28 March 2023 which states that companies who opted for e-invoicing within the 2020 tax year will benefit from certain tax incentives until the 2023 fiscal year. Tax incentives are a two-way success: they encourage the growth of e-invoicing and engage taxpayers with the process.  

The PDF version of the bill (in Greek) can be accessed via the link below:  

https://www.et.gr/api/DownloadFeksApi/?fek_pdf=20230100077 

 

Public consultation on ViDA proposal

As noise around the VAT in the Digital Age (ViDA) proposal intensifies, multiple EU Member States are currently debating the proposal in their national parliaments. We expect there to be a flurry of activity as EU Member States contemplate and debate the proposal.  

Italy is the latest country to actively engage with the proposal, with the Italian Ministry of Economy and Finance having launched a public consultation regarding the VAT in the Digital Age proposal. Parties could provide feedback and leave comments until 10 April 2023. 

The link below provides access to the Italian public consultation: 

https://www1.finanze.gov.it/finanze2/servizi/n_consult_newDF/consulta.php?id=8727608&step=0 

The VAT in the Digital Age (ViDA) proposal is a critical development which endeavours to structure the e-invoicing and e-reporting landscape over the next few years. You can read more about the proposal in our recent post here. 

Circular clarifying delayed sending of e-invoicing

Italy’s e-invoicing mandate introduced in 2019, and the subsequent cross-border obligations instituted in 2022, are both complex e-invoicing and e-reporting solutions respectively, often prompting questions by Italian taxpayers. Consequently, the Italian government frequently issues circulars on unclear or nebulous issues. 

Circular N.6 dated 20 March 2023 clarifies that the sending of electronic invoices to the Exchange System (SdI) after the ordinary deadlines is considered a formal irregularity, and therefore remediable, provided that the same invoices are correctly included in the relevant VAT settlement, with relative payment of the tax. For the same reason, the failure to send the electronic payments stored and entered in the accounts can be remedied with the payment of the tax due. The Circular therefore provides taxpayers with some concessions, even though ordinary deadlines may have been breached. 

The Circular can be accessed via the following link: 

https://www.agenziaentrate.gov.it/portale/documents/20143/5081192/circolare+n+6_tregua_fiscale_del+20+marzo+2023.pdf/5e8a2e76-dd65-3188-b9a7-9e6f1fa86aff 

VAT registration threshold increase

Increasing (or reducing) the VAT threshold is a frequent fiscal procedure deployed by countries and may be triggered by multiple reasons. Increasing the VAT threshold holds some advantages for taxpayers- particularly those companies who, because of the increase, find themselves relieved of multiple VAT obligations. 

Italy has proposed to increase its threshold for VAT registration from 65,000 Euros to 85,000 Euros. The European Commission and European Council, whose permission is required to raise the VAT registration threshold, has supported the increase. 

This measure must not be underestimated- Italy’s VAT registration threshold is the highest in the European Union to date. It will be effective from 1 January 2023 to 31 December 2024, at which point it will need re-assessment.  

Enablement of voluntary e-invoicing

Currently, it is compulsory for GST registered businesses in India whose annual turnover exceeds RS 10 crores to clear their invoices with the government portal (Invoice Registration Portal) before sharing the invoice with their buyers.  

According to GST e-Invoice system’s notification published on 17th March 2023, businesses not covered by the mandate can now issue e-invoices voluntarily for FY 2022-23 

End of the initiative of cancelling fines

In our previous blog, we wrote about ZATCA’s extended period for the “Cancellation of Fines and Exemption Penalties Initiative”.   Under this initiative, fines including late filings, late registrations, and VAT field control violations relating to e-invoicing are cancelled for all taxpayers. 

The initiative will officially expire at the end of May 2023. The Zakat, Tax and Customs Authority (ZATCA) urges taxpayers to benefit from the Cancellation of Fines and Exemption initiative prior to its expiration date. 

 

Self-Billing of Invoices allowed as from 1 July 2023

As part of the tax reform proposal for 2023, taxpayers will be able to issue self-billing VAT invoices from 1 July 2023.  

Self-billing of invoices will be incorporated into article 71-2 of the South Korean VAT law. The article imposes that buyers can issue invoices for goods and services if the supplier cannot issue an invoice. In this case, the buyer can deduct the input VAT. In the case of supplies of goods or services that are exempt from VAT, self-billing of invoices will not be permitted. 

Upcoming CFDI 4.0 obligations

The original timeline communicated by the Mexican Tax Authorities, the Servicio de Administracion Tributaria (SAT) was that CFDI 4.0, and associated documents, would become mandatory from 1 January 2023, with a transition period in effect until 31 December 2022 when taxpayers could elect to use either CFDI 3.3 or CFDI 4.0, as required.  

The SAT revised these timeframes in November 2022, indicating that the mandatory usage of CFDI 4.0 and associated documents would now come into effect from 1 April 2023, meaning that from 1 April 2023, Mexican suppliers must invoice via CFDI 4.0, as well as version 2.0 of the withholding and payment information in respect of the CFDI.  The usage of these documents continues to be optional up until 31 March 2023. Alternatively, up to this date, it is possible to also invoice using CFDI 3.3.  

CFDI 3.3 will not be a compliant invoice format from 1 April 2023 and will be rejected if used from this date onwards.  

Tungsten has been supporting the portal solution in Mexico since June 2022 and have been inviting Integrated Solution suppliers to be mapped for the new version of the CFDI 4.0. Our e-invoicing solution in Mexico today is compliant with all timeframes cited above.  

Clarification on stance on e-invoicing

Finland’s support of e-invoicing has been somewhat muted in comparison to other countries. However, the tenor is changing in the country- undoubtedly sparked by the VAT in the Digital Age (ViDA) proposal.  

Finland has written to the EU Parliament outlining its support for e-invoicing and more broadly, the objectives of the proposal. It still has some concerns, around support for small and medium enterprises (SMEs) but the overall tone struck is one of support.  

Response to the VAT in the Digital Age (ViDA) proposal

We expect a flurry of activity as EU Member States digest and consider the impact of the VAT in the Digital Age (ViDA) proposal on their own e-invoicing and e-reporting practices.  

On 3 March 2023, the Slovenian Parliament agreed to consider Bill No. 54921-12/2023/1, which seeks Slovenia’s support for proposed amendments to the EU VAT Directive 2006/112/EC. These amendments aim to combat VAT fraud and modernize tax regulations for the digital age, which is strongly indicative that Slovenia’s response the proposal is a predominantly positive one.  

Overhaul of VAT process

Last month, we published some significant updates in relation to Belgium’s intent to mandate B2B e-invoicing in the country. You can read more in respect of the same here.  

Belgium’s outreach in respect of the digitisation of its fiscal procedures has extended yet further beyond the e-invoicing topography as it looks to simplify and streamline its fiscal infrastructure on a much more extensive scale. The proposed Bill No. 55K3128001 includes the procedures which, once facilitated, aim to achieve this underlying objective. 

A particularly significant change proposed by the bill is the introduction of automated processing of periodic VAT declarations and payments. 

The Bill is currently with the Belgian Parliament for approval, and is expected to come into effect, if approved, on 1 January 2024. This aligns with proposed e-invoicing and e-reporting transitions in Belgium, hinting at prevalent fiscal change in the country in 2024. 

Opinion of the European Data Protection Supervisor (EDPS) on VAT in the Digital Age (ViDA) proposal

The European Data Protection Supervisor (EDPS) issued its opinion on the EU VAT in the Digital Age (ViDA) proposal. EDPS is largely advocating and in agreement with the objectives pursued by these proposals and re-asserting that any processing of personal data must comply with the EU data protection Regulations, including the principle of purpose limitation and data minimization. 

With preoccupations around EU Regulations and principles on data protection, the EDPS made the following recommendations in its opinion: 

  • To add a recital highlighting that the Proposal for a Council Directive amending Directive 2006/112/EC regarding VAT rules for the digital age ensures full respect for the fundamental rights to privacy and to the protection of personal data, as well as the applicability of the EU Regulations to the processing of personal data in the context of the proposal; 
  • Specify that the information collected may only be processed for the purpose of fighting VAT fraud by the competent tax administration; and 
  • To delete in recital 24 of the Proposal for a Council Regulation Amending Regulation 904/2010 regarding the VAT administrative cooperation arrangements needed for the digital age the words “seeks to”, to indicate clearly that this Regulation ensures the full respect for the right of protection of personal data. 

Finally, the EDPS also stressed that the setting up of a centralized information system may entail higher risks for data protection purposes due to the large volume of intra-Community transactions information which can lead to potential cyberattacks and data breaches. Thus, the EDPS considers it essential that an adequate level of security is guaranteed in the exchange of information between national tax authorities and the central VAT Information Exchange System (VIES). 

The opinion has raised the critical awareness of security concerns and protocols associated with the proposal. You can read the full opinion here on the EDPS website: 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_7071_2023_INIT&qid=1678102312771&from=EN 

European Commission consultation regarding the approach of ViDA reforms

The VAT in the Digital Age Proposal (ViDA) has referred to the common European standard on e-invoicing (also known as EN16931) and advocated it as a necessary medium of data exchange between businesses. This common standard is contained within the e-invoicing Directive 2014/55/EU and defines invoice contents, format and language. The ViDA proposal, however, would extend the e-invoicing standard with the intra-community supply of goods and services. The European Commission currently is holding a consultation of this respective Directive which commenced on 17 March 2023 and will end on 14 April 2023. 

The link for feedback can be accessed below: 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13669-Public-procurement-EU-rules-on-electronic-invoicing-in-public-procurement-evaluation-_en 

File format and transmission form an integral part of the ViDA proposal, and Tungsten will follow developments in respect of the same.  

ViDA legislative process framework

With the public consultation now underway, plans for the progression of the VAT in the Digital Age (ViDA) proposal are accelerating.  

The European Parliament has now further mapped out the legislative process of the ViDA proposals. The Council will need to unanimously approve the proposal, but the European Parliament and the European Economic and Social Committee (EESC) should be consulted in respect of it. Further to our previous post, the proposal has now been translated into all applicable languages and is currently being debated in the national parliaments of EU member states. 

The following document provides further information in respect of the background to the proposal, including its objectives and wider implications:  

https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/739371/EPRS_BRI%282023%29739371_EN.pdf 

Requirement for new QR code on invoices

From 1 September 2023, it will be mandatory to include a QR code on e-Fatura invoices. This will be applicable for all B2B and B2G transactions, as well as B2C transactions and e-delivery notes.  

In introducing such an obligation, Turkey follows the course of other countries such as Portugal, who also impose similar requirements.