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Building on the introduction of project ‘Fiscalisation 2.0’ last month, Croatia’s e-invoicing drive has just been sparked to life as the government announces plans for a nationwide B2B e-invoicing mandate. By means of some background, Croatia introduced B2G e-invoicing obligations in 2019.  

The timing of the announcement is not coincidental. The VAT in the Digital Age (ViDA) proposal looks likely to have triggered countries to review their own e-invoicing practices as reporting obligations loom in January 2028, according to the current proposal. 

Specific details of Croatia’s proposed e-invoicing are yet to be announced, but in all likelihood, this will be modelled largely on the Croatian government’s e-invoicing national platform, the e-Racun.  

The mandate is expected to take effect from 1st January 2025, according to current timeframes. Currently, it appears that Croatia’s Ministry of Finance will include full transactional-level live submission of e-invoices, although specific details in respect of the e-invoicing solution have not yet been confirmed. 

Tungsten is also probing mandates in France, Poland, Belgium and Spain, amongst others EU countries, which are expected to commence prior to January 2025. Croatia is, however, a compliant market for Tungsten and we are closely observing developments in respect of the Croatian mandate with a view as to how we can serve our Croatian market. Mindful of the ViDA backdrop, we expect Croatia’s e-invoicing model to be ViDA compliant and will keep you informed of the same.  

The European Data Protection Supervisor (EDPS) issued its opinion on the EU VAT in the Digital Age (ViDA) proposal. EDPS is largely advocating and in agreement with the objectives pursued by these proposals and re-asserting that any processing of personal data must comply with the EU data protection Regulations, including the principle of purpose limitation and data minimization. 

With preoccupations around EU Regulations and principles on data protection, the EDPS made the following recommendations in its opinion: 

• To add a recital highlighting that the Proposal for a Council Directive amending Directive 2006/112/EC regarding VAT rules for the digital age ensures full respect for the fundamental rights to privacy and to the protection of personal data, as well as the applicability of the EU Regulations to the processing of personal data in the context of the proposal; 
• Specify that the information collected may only be processed for the purpose of fighting VAT fraud by the competent tax administration; and 
• To delete in recital 24 of the Proposal for a Council Regulation Amending Regulation 904/2010 regarding the VAT administrative cooperation arrangements needed for the digital age the words “seeks to”, to indicate clearly that this Regulation ensures the full respect for the right of protection of personal data. 

Finally, the EDPS also stressed that the setting up of a centralized information system may entail higher risks for data protection purposes due to the large volume of intra-Community transactions information which can lead to potential cyberattacks and data breaches. Thus, the EDPS considers it essential that an adequate level of security is guaranteed in the exchange of information between national tax authorities and the central VAT Information Exchange System (VIES). 

The opinion has raised the critical awareness of security concerns and protocols associated with the proposal. You can read the full opinion here on the EDPS website: 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_7071_2023_INIT&qid=1678102312771&from=EN 

The VAT in the Digital Age Proposal (ViDA) has referred to the common European standard on e-invoicing (also known as EN16931) and advocated it as a necessary medium of data exchange between businesses. This common standard is contained within the e-invoicing Directive 2014/55/EU and defines invoice contents, format and language. The ViDA proposal, however, would extend the e-invoicing standard with the intra-community supply of goods and services. The European Commission currently is holding a consultation of this respective Directive which commenced on 17 March 2023 and will end on 14 April 2023. 

The link for feedback can be accessed below: 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13669-Public-procurement-EU-rules-on-electronic-invoicing-in-public-procurement-evaluation-_en 

File format and transmission form an integral part of the ViDA proposal, and Tungsten will follow developments in respect of the same.  

With the public consultation now underway, plans for the progression of the VAT in the Digital Age (ViDA) proposal are accelerating.  

The European Parliament has now further mapped out the legislative process of the ViDA proposals. The Council will need to unanimously approve the proposal, but the European Parliament and the European Economic and Social Committee (EESC) should be consulted in respect of it. Further to our previous post, the proposal has now been translated into all applicable languages and is currently being debated in the national parliaments of EU member states. 

The following document provides further information in respect of the background to the proposal, including its objectives and wider implications:  

https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/739371/EPRS_BRI%282023%29739371_EN.pdf 

Developments with respect to B2B e-invoicing in Spain are taking pace as the Spanish government signals their intent to collate public sentiments around e-invoicing. B2B e-invoicing in Spain is expected to be mandated during 2024, although exact timelines are yet to be confirmed. You can read more about Spain’s B2B e-invoicing mandate, and the background to the associated Crea y Crece law, here.  

The Ministry of Economic Affairs and Digital Transformation in Spain this month launched a public consultation on the proposed B2B e-invoicing mandate. 

The scope of the questions contained within the public consultation are numerous and broad in nature, encompassing the following topics:  

• E-invoicing application scope, including exemptions 
• Whether the framework covers a public or private realm 
• Format interoperability  
• Platform interconnections  
• Invoice statuses 
• Submission to tax authorities  
• Considerations relating to small companies and the self-employed, and potential connection for low-volume issuers.  

The breadth of questions (specifically, 32 questions) suggests the government is keen to derive public sentiment that will ultimately shape the e-invoicing solution that Spain will adopt.    

The public consultation ended on 22 March 2023, and can be accessed via the following link: 

https://portal.mineco.gob.es/es-es/ministerio/participacionpublica/consultapublica/Paginas/Consulta_publica_creacion_crecimiento_empresas_factura_electronica_entre_empresas_y_profesional.aspx  

Further details on the scope of the public consultation (in Spanish) is available via the following link: https://portal.mineco.gob.es/RecursosArticulo/mineco/ministerio/participacion_publica/consulta/ficheros/230302_Consulta_publica_creacion_crecimiento_empresas_factura_electronica_entre_empresas_y_profesional.pdf 

The Crea y Crece Law was passed on September 2022, resulting in a 6-month timeframe for the Spanish tax authorities to produce technical requirements relating to their e-invoicing solution. However, it has now been confirmed that the technical specifications, due this month according to this timeline, have now been postponed. This is perhaps unsurprising, given that the public consultation only just concluded this month. 

While we can expect Spain’s technical specifications to now be published later in the year, Tungsten looks forward to analysing these specifications with a view to determine how we can best serve our Spanish customers with the demands imposed by the mandate.  

Tungsten follows updates relating to e-invoicing in Latin America, where the trajectory in relation to the same is increasing exponentially.   

Compared to its Latin America counterparts, the e-invoicing landscape in Nicaragua has been quiet. But there has, this month, been an update in terms of exempt products in the country.   

Agreements 001-2023 and 002-2023, published on the Nicaraguan Ministry of Finance website, has introduced a new list of products subject to VAT exemption. These are effective from 14 February 2023.  

The scope of the goods subject to the new relief are broad, including plastic, leather, certain foods and clothing amongst others.   

The new agreements should include all VAT exempt goods- and so any goods not included in the list will not be subject to VAT exemption, despite previously being categorised as such.  

From 1 September 2023, it will be mandatory to include a QR code on e-Fatura invoices. This will be applicable for all B2B and B2G transactions, as well as B2C transactions and e-delivery notes.  

In introducing such an obligation, Turkey follows the course of other countries such as Portugal, who also impose similar requirements.   

Further to our recent update on developments associated with Peru’s e-invoicing system, Peru has introduced further specific obligations in respect of its e-invoicing solution.   

Via Resolution No. 000003-2023, a maximum of three calendar days from the day after invoice issuance has been cited as the maximum timeframe within which to send the electronic invoice to the Peru e-invoicing solution, the SUNAT or to the Electronic Services Operator (OSE).  

Canada has announced that income for mining and forging of digital currencies will no longer be subject to the 5% GST / HST.  

In what is a first amongst all Canadian provinces, Quebec will now start to impose its local tax, the Quebec Sales tax (QST) on non-resident digital providers of services to its customers. Other taxes deployed in other Canadian provinces are yet to follow suit.   

The QST rate is currently set as 9.976%.  

Canada is a compliant territory for Tungsten Network and we will follow e-invoicing developments in the country.