Spain takes a step towards digitalisation of the invoicing function

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Spain takes a step towards digitalisation of the invoicing function

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While the definitive move is yet to be made on Spain’s path to mandatory electronic invoicing between companies, Fernando Matesanz of Spanish VAT Services reports on a notable development and identifies several current issues

On December 6 2023, a royal decree approving the regulation establishing the requirements for so-called computer billing systems was published in Spain. The regulation is closely related to the obligation to issue electronic invoices between companies that is not yet in force in Spain, since today the country only has a draft of the applicable regulation, but everything suggests that it will soon see the light of day.

The objective of the new regulation on invoicing systems, which will be in force as of July 2025, is to prevent or hinder the manufacture, production, and possession of computer systems and programs that allow, or facilitate, the manipulation or concealment of accounting, invoicing, or taxation data.

The regulation is aimed at producers, marketers, and users of these computerised billing systems. It is expressly stated that companies that are not taxpayers in Spain for the purposes of direct taxes are excluded from it.

The recently published regulation defines the characteristics and functionalities that all the aforementioned electronic invoicing systems must have. Some of these features involve creating journal entries for each addition, cancellation, or modification of an invoice. A traceability ‘hash’ must be added to these entries, so that every action carried out in the billing system is recorded and they are unalterable. It also establishes the obligation to include a QR code on invoices, which will allow access to detailed information about the invoice.

However, perhaps the main novelty of the regulation is that computerised invoicing systems must be able to connect in real time with the tax administration so that – for the time being, on a voluntary basis – they can constantly send invoices to the administration. The invoices that are sent following this process will display "verified invoice", to give total security to the parties that have been involved in the operation. It is, therefore, a kind of clearing system, similar to those that exist in other member states.

The regulation establishes the possibility of delegating invoicing tasks to third parties and states that the entity producing the computer system must certify, by means of a very comprehensive responsible declaration, that the system complies with all the characteristics established by this regulation.

Potential issues with Spain’s computer billing systems regulation

As one can imagine, once a new rule is published, it is the time for questions and doubts.

For example, no clear definition is provided of what is meant by "computerised billing system". There is a question as to whether the new rule refers exclusively to business ERP systems (which would be the most logical) or whether it also refers to any office automation system (word processors and spreadsheets) that many small companies with limited resources use to create their invoices. It is of great importance to clarify this point.

There are also some doubts as to the scope of liability in the event of delegating invoicing tasks to third parties and even as to the scope of the exemption from the new obligations and, in particular, its integration with the so-called real-time VAT reporting (SII) system that has been in force in Spain since 2017. It appears that some obligations could be duplicated, which should not be acceptable.

It is, as can be seen, an ambitious regulation, with a difficult implementation that will force numerous changes to be made in the invoicing processes of a large number of Spanish taxable persons.

Challenges in store for the VAT world

As stated, this regulation is closely related to the obligation to issue electronic invoices that is likely to be approved soon. This regulation will require the issuance of electronic invoices between taxable persons (B2B), invoices that must be sent to a series of electronic platforms so that these, in turn, send them to the Spanish tax office.

The combination of both regulations, together with the SII system, will mean that in one way or another, a large amount of information will be sent, from millions of operations, to the tax administration in very short periods. All this information is a very valuable tool and gives enormous power to those who have it; in this case, to the tax administration.

All this will have to be aligned at some point with the VAT in the Digital Age proposal. The times ahead undoubtedly pose a major challenge for the world of VAT.

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