Progress (and lack of progress) in global e-invoicing
The recent Global e-Billing Conference, hosted by PwC in Brussels in late October, proved to be a great opportunity to meet e-Invoicing experts from around the world, including Mexico, Brazil and Turkey, and gain some first hand insight into how the industry is developing globally.
We know that the European Union (EU) has been slow in its uptake of e-Invoicing, especially when compared to Latin America, so we was particularly shocked to discover that it’s been 18 years since the EU and the OECD first created initiatives to eliminate barriers for e-Invoicing. Unfortunately, while their Brazilian and Mexican counterparts are taking bold decisions and rolling out mandatory e-Invoicing, including standardisation across nations, and bringing huge financial gains as a result of their ability to collect taxes more efficiently, EU representatives continue to sit around debating the advantages and disadvantages of e-Invoicing.
Recently, more progress has been made in the EU, with a decision to mandate e-Invoices for business-to-government (B2G) across all 28 member states by 2018. In Italy, Spain, Germany and elsewhere we are already seeing these mandates coming in force on 1 January 2015. Although mandating B2G e-Invoices is certainly a step in the right direction, the next issue comes with standardisation of the file format. During the conference, a member of the EU Commission was quizzed at length on the need for standardisation of invoice files across the EU – something that many people are crying out for.
Moving away from the topic of B2G mandates, the conference addressed other legislation affecting the industry in the EU. In Hungary, for example, new reporting obligations were implemented on 1 October 2014, creating a further burden for taxpayers, even if they are using a service provider. This legislation also extends into new archiving requirements from 1 July 2015, however, the details of these are still being discussed by ministers.
The conference also covered Mexico, Russia and the Philippines. Mexico is an undisputed leader in e-Invoicing, with a mandate in place since 2002. Having nailed e-Invoicing, it seems Mexico is now focused on moving towards entirely electronic audits, particularly with the latest e-accounting laws coming into force in January 2015.
Russia, although not mandated like Mexico, talked of the move towards e-Invoicing no longer being voluntary – a highly encouraging sign. Furthermore, from 2015 all taxpayers will have to submit tax returns electronically so that the chain of supplies can be checked through automation.
Finally, e-Invoicing has existed in the Philippines – at least in theory – for many years, however, the Bureau of Internal Revenue still insists on hard copies of all invoices. Here we see a country where, although positive legislation exists, the e-Invoicing landscape is still far behind many other nations.
Towards the end of the day, Alexander de Croo, Deputy Prime Minister of Belgium, shared his and also the EU’s perspective on the advantages of e-Invoicing, but also expressed concern that this is not yet fully embraced within the EU as a whole. He stated that the EU, “cannot afford to miss out on the efficiency benefits that e-Invoicing brings” – a sentiment we can all give our support to.