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E-invoicing in Spain & Digital Reporting Requirements

E-invoicing in Spain & Digital Reporting Requirements

What is electronic invoicing in Spain?

Spain is implementing a new law that requires all B2B transactions to be conducted with electronic invoices, which are specific, highly regulated digital documents that comply with specific, highly regulated technology.

Some of the goals of e-invoicing in Spain are to:

  • Streamline and automate financial reporting
  • Make payments more punctual and efficient
  • Increase the government recoup of VAT revenue

These goals and the plan for electronic invoicing in Spain stem from the European Unions’ VAT in the Digital Age (ViDA) plan, which wants to see e-invoicing and digital reporting spread across Europe.

Electronic invoicing in Spain will come into effect between 2024 and 2025. The e-invoicing rules were drafted in the "Crea y Crece" law back in September 2022. You can check out the official law here.

In fact, electronic invoicing is rolling out in most countries around the world, including other EU member states. For example, France e-invoicing rules and Portugal e-invoicing rules are in the works.

Who is required to issue electronic invoices in Spain?

Business owners and other professionals that make B2B transactions are all required to issue electronic invoices in Spain and comply with the digital reporting requirements. B2C transactions, or sales to private Spanish citizens, are not included in the e-invoicing rules.

That said, there are some exceptions. B2B businesses in Spain do not need to issue electronic invoices in the following cases:

  • Transactions with entities outside of Spanish territory, so most cross-border sales and purchases. Foreign businesses are not required to comply.
  • When simplified invoices are used under certain conditions (listed in Article 4 of Royal Decree 1619/2012).

When is Spanish e-invoicing mandatory?

The e-invoicing law could be enforced as early as summer 2024, but most Spanish businesses and professionals won’t be required to generate electronic invoices until 2025 or later. The stages of the e-invoicing rollout are based on business turnover, with higher grossing companies first.

The estimated timeline is:

  • From July 2024, the e-invoicing obligation begins for companies with an annual turnover greater than €8 million.
  • From 2025, the obligation applies to all companies and professionals, even with turnover less than €8 million.

If the mandate is delayed, the first phase will be pushed to 2025, and the second phase could be postponed to the second half of 2025, or even early 2026.

How does Spanish e-invoicing work?

There are a few different actors involved in the Spanish e-invoicing process, and each one has a specific role:

  1. A public electronic invoicing solution overseen by the State Tax Administration Agency (AEAT).
  2. Private platforms for electronic invoicing, which must meet the Royal Decree criteria.
  3. The businesses that send the electronic invoices.
  4. The businesses that receive the electronic invoices.

Business owners that need to produce e-invoices can either use the publicly provided solution or a third-party private software that is designed to automatically handle electronic invoices on their behalf. These systems, the public and the private, are compatible and can “communicate” with each other, so to speak.

But aside from the basic steps of the process, there are a number of obligations on both the companies that send and receive invoices and the providers that offer electronic invoicing services.

Rules for complying with Spanish e-invoicing

The law outlines numerous obligations, and we can’t list them all here. But this list contains many of the rules that are important for onlines businesses:

  • Businesses are obliged to issue, send, and receive electronic invoices through private platforms or the public solution offered by AEAT.
  • Businesses who don’t use the public solution must still send in duplicate invoices in Facturae format, for accurate record keeping.
  • The sender and recipient need to provide information on the status of invoices via digital reporting.
  • Private e-invoicing providers will have to ensure free interconnection and interoperability between technology solutions or platforms.
  • Recipients must maintain access to electronic invoices for 4 years.
  • Private providers must enable recipients to view, download, and print their electronic invoices.

Additionally, Spanish businesses must keep the following records electronically:

  • Register of invoices issued
  • Register of invoices received
  • Register of capital goods
  • Register of certain intra-Community transactions.

Penalties for not complying with electronic invoicing in Spain

Mistakes that result in not complying with electronic invoicing in Spain range from late reporting to faulty bookkeeping. For each invoice reported late, there is a fine of up to 0.5% of the total transaction value. The minimum fine is €300, and the maximum is €6,000 per quarter. So if you forget to report on several e-invoices, that fine could really add up.

Second, if you don’t keep proper accounting records, there could be a fine of between €150 and €6,000. If you’re located in Spain, you should probably be following the accounting rules of the International Financial Reporting Standards (IFRS).

How to create an electronic invoice

The Royal Decree lays out several technical specifications that all businesses must adhere to, in order for an e-invoice to function, travel through the system, and be registered as legitimate. There are two general requirements:

  1. The e-invoices must come in a specific format.
  2. The origin and authenticity of e-invoices must be ensured by the technology.

First, electronic invoices in Spain must be formatted in ways that are compatible with the technology used by government as well as private providers. So, the e-invoices must be generated using one of the following formats:

  • XML CII. A format from CEFACT/UN that applies to all invoices.
  • UBL. A format for invoices and credit notes, as defined in the ISO/IEC 19845:2015 standard.
  • EDIFACT. A format for invoices in accordance with the ISO 9735 standard.
  • FacturaE. A format that uses XML signatures and follows the XAdES standard.

Second, the origin and contents of the electronic invoice must be confirmed and secure. Basically the Spanish government wants to know that the invoice is the real deal! This can be accomplished by using one of the following methods:

  • Advanced electronic signature, which is in compliance with the eIDAS Regulation.
  • Electronic data interchange (EDI) technology from a provider.

What are the e-reporting requirements for e-invoices in Spain?

E-reporting is an important part of the Spanish e-invoicing requirements. Buyers must report the invoices they receive and communicate the status of those electronic invoices.

The statuses include:

  • Complete acceptance or rejection of the invoice, including the date.
  • Full payment of the invoice, along with the date.
  • Partial acceptance or rejection of the invoice, and the date.
  • Partial payment of the invoice, specifying the amount paid and its date.
  • Transferring the invoice to a third party for collection or payment, including the name of the assignee and the date.

At Quaderno we are already working to support the future law in Spain, so we can serve our customers with Spanish e-invoices as soon as it’s required. For now, our automatic invoices and VAT compliance help business owners save time and have peace of mind. See the benefits with Quaderno’s free trial.

Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.