General Overview of the Law
Spain has reached a crucial milestone in its journey toward mandatory electronic invoicing for Business-to-Business (B2B) transactions. The European Commission recently approved the Draft Royal Decree, which builds upon the Law on the Creation and Growth of Companies. This approval marks a significant advancement in the regulatory development of electronic invoicing between businesses and professionals within Spain.
Understanding the Crea y Crece Law
The journey toward electronic invoicing in Spain began in March 2023, when the Ministry of Economic Affairs and Digital Transformation launched a public consultation on the proposed regulation. The primary goal was to gather feedback from citizens, organizations, and key stakeholders about the challenges, opportunities, and potential solutions for implementing mandatory electronic invoicing across the country. The outcome of this consultation has shaped the current draft, bringing Spain closer to full adoption.
Ayming previously highlighted the key aspects of the Create and Grow Law, which mandates electronic invoicing among entrepreneurs and professionals. With the European Commission’s recent approval of the second Draft Royal Decree, Spain is now on the brink of finalizing the regulatory framework. This approval not only signals imminent enforcement but also introduces important new features that all Spanish entrepreneurs and professionals need to be aware of.
When Will the New Regulations Come Into Force?
The implementation timeline for mandatory electronic invoicing in Spain depends on the annual turnover of the entrepreneur or professional:
- For businesses with an annual turnover exceeding 8 million euros: The obligations will become effective 12 months after the publication of the Royal Decree.
- For businesses with an annual turnover below 8 million euros: The obligations will take effect 24 months after the publication of the Royal Decree.
During the 12-month period between these two stages, companies that fall under the lower turnover threshold must continue issuing invoices in PDF format. This measure ensures a smooth transition and avoids disrupting the invoicing process between businesses of different sizes.
Additionally, a critical deadline to keep in mind is the requirement for invoice statement notifications, which will come into effect 36 months after the Royal Decree’s publication.
Mandatory Electronic Invoicing: Key Scenarios
The new regulation stipulates that electronic invoicing will be mandatory in several scenarios, with a few exceptions outlined in the Draft Regulation. These include:
- When the issuer is a business or professional required by Spanish Invoicing Regulations to issue and deliver invoices for transactions carried out as part of their business activities.
- When the recipient of the transaction has their business headquarters, permanent establishment, domicile, or habitual residence in Spain, provided that the transactions are directed to this location.
- When the invoicing obligation is fulfilled through the recipients or a third party.
Important Points to Note
The Draft Regulation introduces several critical elements that businesses and professionals must consider:
- Electronic Invoicing Entry Point: Companies and professionals must include information about the electronic invoicing entry point in their communications, such as on their websites.
- Invoice Payment Information: The communication of invoice payment details must be made through the public electronic invoicing solution.
- Definition and Syntax: The regulation clarifies what constitutes an electronic invoice and specifies the syntax for electronic invoice messages.
- Interoperability: Private electronic invoicing platforms are required to accept interconnection requests from other platforms, ensuring seamless operation across different systems.
- Public E-Invoicing Solution: The State Tax Administration Agency (AEAT) will manage the public e-invoicing solution, which will serve as a central repository for all issued invoices. The accepted syntax will be “facturae,” the same format used for invoicing public entities via FACE.
- Invoice Payment Timing: The regulation mandates the reporting of the effective payment time for received invoices and outlines the methods for doing so.
- Electronic Invoice Exchange Platforms: The regulation establishes the requirements for operating as an electronic invoice exchange platform, ensuring authenticity through advanced electronic signatures.
Moreover, the regulation accounts for the specific legal frameworks of the Basque Country and the Autonomous Community of Navarre, ensuring comprehensive coverage across Spain.
What’s Next?
With the European Commission’s approval of the Draft Royal Decree, the final approval of mandatory electronic invoicing in Spain is imminent. Spanish businesses and professionals should begin preparing for these changes to ensure compliance and to take advantage of the efficiencies brought by digital invoicing.
Stay informed and ready for this transition as Spain moves closer to a fully digitalized invoicing landscape.
