Mandatory B2B e-invoicing approved in Spain

Spain has formally approved mandatory B2B e-invoicing for all businesses. The e-invoicing mandate will come into full effect by July 2024 for large taxpayers (with a turnover exceeding €8 million). However, this may still be subject to the progress of the 'regulatory development' phase, which began in September 2022 and aims to prepare all the required technical specifications for the upcoming mandate. 

Therefore, the introduction of mandatory e-invoicing will be phased, taking into consideration taxpayers' turnover, and depending on the time of approval of the regulatory development.

In the meantime, businesses need to prepare for the upcoming change and understand how it will impact their business. Here's how to obtain full compliance before it's too late. 

A brief timeline for mandatory B2B e-invoicing

• September 2015: E-invoicing becomes mandatory for the public sector.
• July 2024: E-invoicing mandate comes into effect for large taxpayers with a yearly turnover above €8 million.
• January 2026: Small and micro-enterprises and sole contractors whose invoices total turnover is less than €8 million.

The Law for the Creation and Growth of Companies in Spain

The newly approved mandate falls under the Law for the Creation and Growth of Companies in Spain, also known as the Crea y Crece. The Law requires all companies to issue, send and receive electronic invoices for all business dealings with another professional entity. The implementation process is estimated to last until 2026. 

Why is Spain moving to B2B e-invoicing? 

Spain has followed an e-invoicing model since 2015 in all B2G (business to government) transactions. With the newly approved mandate, Spain aims to push all businesses towards a similar model to ensure that all VAT-paying companies and individuals can send and receive electronic invoices. 

So, why shift towards a digitised business transaction process?

Firstly, Spain is now following suit and joining a list of other EU countries like Italy, France, Poland, and Albania that have also made e-invoicing mandatory. The B2B e-invoicing initiative falls under Spain's Recovery, Transformation, and Resilience Plan to better aid company creation and development. Digitising the invoicing system will support business growth in Spain, reducing new business registration costs from 3,000 euros to 1 euro. 

Subsequently, with the new adoption, Spanish companies have more control over their invoicing, lower tax evasion, and significantly increased productivity if implemented and followed correctly. Additional benefits include improved traceability and management of payments between companies and freelancers and the reduction of human error through process automation.

Although this is already happening in the public sphere, the B2B world must adapt to a similar structure when invoicing other businesses or sole contractors. However, these e-invoices must align with specific technical requirements. 

Approved e-invoicing systems

Spanish VAT-paying businesses must use limited e-invoicing systems approved by the Spanish tax authorities. Any commercial product not in compliance must pledge to comply with the new rules. This approach is detailed and includes submitting invoices to the Agencia Tributaria. Once reviewed and compliant, the system in question will be considered a 'verifiable invoicing system' or a VERI FACTU system.

B2B e-invoicing requirements for companies and the self-employed

The complete technical requirements are still considered in the draft phase and are subject to change. In the interim, companies and independent contractors are still required to: 

• Issue and send electronic invoices for all B2B transactions, including independent contractors. 
• Facilitate easy access to e-invoices, including supporting recipients' downloading, viewing and printing of e-invoices. 
• Store and maintain access to e-invoices for six years regardless of whether recipients are active customers. 

Are you looking for more information regarding VAT treatment in Spain? 

Would you like to prepare your business for the upcoming mandate to ensure complete compliance? Reach out to our experts here and rest assured that you’re up to date with the latest developments regarding the VAT treatment in Spain.