Mandatory Electronic Billing in Spain

Electronic invoicing in Spain is undergoing a crucial transformation. In a short time, it will be mandatory for many companies and freelancers, and it is essential that business owners understand its importance, the implementation deadlines and how they can benefit from this change. This article provides a comprehensive guide to mandatory electronic invoicing, explaining its objectives, key deadlines and the consequences of not adapting to the new regulations.

What is Mandatory Electronic Invoicing?

Electronic invoicing is not a new concept, but with recent tax reforms in Spain, it has become mandatory for more companies and freelancers. This measure is part of a global effort to modernise the tax system, reduce fraud and improve efficiency in the management of tax data. The new regulations, published in October 2023, establish a more secure, accessible and standardised electronic invoicing system that guarantees compliance with tax obligations.

Key Objectives of Mandatory Electronic Invoicing

The requirement to issue electronic invoices responds to three fundamental objectives that the tax authorities seek to achieve:

1. Strengthening the Obligation to Issue Invoices: All entrepreneurs and professionals must issue an invoice for each transaction carried out, regardless of their size or sector.
2. Guarantee the Security of Records: Invoices must be stored securely in a computer system, in such a way that they cannot be manipulated, and with a standardised structure to facilitate automatic analysis.
3. Facilitate Compliance with Tax Obligations: Following the model of other countries, such as Italy and Portugal, a system will be implemented in which invoice data will be sent to the tax administration in real time or automatically, depending on the system chosen.

Who is affected by the Mandatory Electronic Invoicing?

The new regulation will affect all self-employed workers and companies in Spain that carry out economic operations and issue invoices to other entities, with some important exceptions:

• Companies and self-employed workers with an annual turnover of less than 6 million euros (except in the Basque Country and Navarre).
• Companies that are already subject to the Immediate Supply of Information (SII) will not see any changes, as this system will coexist with the new electronic invoicing system, known as VeriFactu.

Therefore, it is essential that companies that are not familiar with these systems prepare to adapt to the new requirements.

Compliance Modalities: VeriFactu and No-VeriFactu

To comply with the electronic invoicing regulations, taxpayers will have to choose between two modalities:

1. VeriFactu: This modality involves the transmission of invoices to the Tax Agency in real time, similar to the TicketBAI system implemented in the Basque Country. This option is ideal for those looking for a more agile and direct invoicing process.
2. No-VeriFactu: In this modality, invoices will not be sent to the Tax Agency in real time, but they must comply with stricter requirements, such as electronic signatures and other mechanisms to guarantee the integrity of the records. This modality will require companies to store invoices and be prepared to send them to the Tax Agency if requested.

Key Deadlines for the Implementation of Electronic Invoicing

The deadlines for the implementation of electronic invoicing vary according to the type of entity:

• Developers of invoicing software: They will have until July 2025 to adapt their solutions to the new anti-fraud requirements. This includes ERP, POS, PMS software providers, as well as companies that have developed their systems in-house.
• Companies and freelancers: Although an exact date for its mandatory nature has not yet been defined, the deadline is expected to be set for the end of 2025. Companies must be ready to issue electronic invoices in accordance with the new regulations to avoid penalties.

How to Prepare for Mandatory Electronic Invoicing?

1. Update your invoicing software: Make sure your invoicing system is compatible with the new security and anti-fraud requirements. If you don’t have an adequate system, consider investing in one that complies with the regulations.

2. Train your team: The transition to electronic invoicing can be challenging, especially for SMEs. It is essential that everyone involved in issuing and managing invoices is familiar with the new process.

3. Evaluate compliance options: Decide whether to opt for the VeriFactu or No-VeriFactu system. Each modality has different implications, so it is crucial that you understand which one best suits your business needs.

4. Establish filing and storage procedures: Make sure that all electronic invoices are securely stored and available to the Tax Agency in case of an audit.

Electronic Invoicing, a Step Towards Modernisation

Electronic invoicing in Spain is not only a tax obligation, but also an opportunity to improve efficiency, reduce human error and facilitate tax compliance. As the mandatory date approaches, it is essential that companies, especially SMEs, prepare to adapt to this change. Having an adequate invoicing system and complying with the regulations will allow entrepreneurs not only to avoid sanctions, but also to improve their competitiveness and optimise their administrative management.

If you have any questions regarding this topic, please do not hesitate to contact us, by calling Carles Monfort Codina or sending an email to cmc@btsasociados.com. We will be happy to assist you.