Services de conformité

In 2021, the Kingdom of Saudi Arabia introduced e-invoicing in two phases. Phase One, the generation phase came into effect on 4 December 2021 for all taxpayers. Phase two, the integration phase, became live on 1 January 2023 for taxpayers with an annual turnover exceeding SAR 3 billion in 2021.  

From 1st July 2023, taxpayers whose annual turnover in 2021 exceeded SAR 500 million will also be required to comply with the requirements of the integration phase. ZATCA will notify taxpayers falling under this scope six months in advance of the implementation date by email or SMS message. 

China’s State Administration for Taxation recently published a notice on VAT incentives for small taxpayers. From January 1 to December 31, 2023, small businesses with monthly sales under 100,000 yuan will be exempt from VAT. 

Furthermore, the STA clarified that from January 1, 2023, until December 31, 2023: 

• Taxpayers in the production services industry can benefit from an additional 5% VAT deduction based on the input VAT deducted in the current period. 
• Taxpayers in the lifestyle services industry can benefit from an additional 10% additional VAT deduction based on the deductible input VAT in the current period. 

Tungsten has previously communicated on the VAT in the Digital Age initiative, where we relayed the European Commission’s intention to introduce harmonisation across Europe with respect to its fiscal operations.  

The rapid acceleration of digitisation permeating all facets of society has led the European Union to review its own fiscal policies and consider how the processing of these fiscal measures can be aligned with these increasingly high standards of digitisation.  

This, coupled with the need to combat fraud and alleviate multiple cumbersome compliance processes, has propelled the EU to conduct a high-scale review of its fiscal operations and propose a radical overhaul of the VAT system as we know it.  

To this effect, the European commission published the VAT in the Digital Age (ViDA) proposal. The proposal has colossal implications for the future of e-invoicing and e-reporting in the coming years.   

The below is a high-level summary only of the most significant changes, from the proposal: 

Proposed Digital reporting requirements  

• From 1 January 2024, PDFs will no longer come under the definition of an e-invoice. Paper invoices will still be permitted, but if opting for e-invoicing, structured invoices only can be issued.  

• The requirement for buyers to accept e-invoices will be removed, thus acting as a major catalyst to compel e-invoicing and ultimately contribute to its proliferation. 
• EU Member States are free to impose their own e-invoicing obligations- but this crucially excludes clearance models. Clearance models typically require verification via an e-invoicing platform before e-invoices can be issued to the buyer. Italy is one such country which has adopted a clearance e-invoicing model, amongst others, and Poland, to date, has been advancing a similar clearance model. Clearance models which have previously been approved by the European Commission, such as Italy, can continue to operate as per their current process until 1 January 2028. The current process to request derogations to mandate e-invoicing will become obsolete from 1 January 2024. 
• Invoices must comply with a European standard, rather than utilise country-specific variations. 
• 1 January 2028: E-invoicing is expected become the default standard for invoice issuance. Paper invoices will need to be specified for certain transactions.  

Real-time reporting obligations 

• From 1 January 2028, a real-time reporting obligation will be introduced for all EU B2B intra-community transactions. The reporting requirement must be completed within 2 working days after the invoice date.  

Single VAT registration and other e-commerce implications  

• From 1 January 2025, the EU proposes to introduce a single VAT registration number, effective abolishing the concept of foreign VAT registration, for certain transactions.  
• A mandatory reverse-charge mechanism will be introduced for B2B supplies of goods and services where the supplier is not established in the country where VAT applies and the customer does have a VAT identification number in that country. 
• The existing deemed supplier rule for marketplaces facilitating B2C supplies of goods will be extended. All supplies of goods (B2C and B2B) within the EU facilitated by marketplaces will be subject to the extended deemed supplier rule. This means that the marketplace will need to collect and account for VAT in the place the services/goods are delivered. This will have a profound impact for several businesses, as this implies that the requirement to collect VAT will not be passed to local entities.  

• The Import One Stop Shop (IOSS) scheme for the importation of low-value consignments into the EU will be mandatory for marketplace operators. The IOSS was initially introduced as a fiscal measure to simply VAT-related processes, by allowing taxpayers to register in a single European state and pay European Union import VAT. 
• Further implementing rules will be introduced for the secure use of the IOSS scheme, e.g. by linking the unique consignment number to the IOSS number.  

Tungsten acknowledges that these are radical changes which will have a profound effect on e-invoicing mandates and e-reporting in the next few years. By extension, Tungsten will also need to consider how the ViDA proposals impact the way Tungsten operates as a service provider. The published consultation has additionally raised some further questions we are working to obtain clarity on and we are collaborating with other EESPA members to respond to the proposal during the Public Consultation We are analysing these changes and are also in contact with our compliance partner, PwC, to discuss the implication of these changes.  

The proposal is ambitious and radical with multiple implications and will require the unanimous consent of all Member States. We are assimilating the changes and will update you further with the development of the proposals, and how we plan to accommodate these, if confirmed.  

The VAT in the Digital Age proposal published by the commission can be found here: 

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD%3A2022%3A394%3AFIN&qid=1670500532473 

There is an 8 week public consultation period, which can be accessed as per the following: 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13186-VAT-in-the-digital-age_en 

Multiple countries internationally have been reviewing their fiscal policies with a view to advancing specific environmental agendas. This has been an evident global trend during 2022 and we expect this to continue in 2023.  

Europe is no exception.  

On 13 December 2022, a provisional agreement to implement an EU Carbon Adjustment Mechanism, which would be effective from 1 October 2023, with plans for a transition period, was proposed. The European Commission will look to spearhead the programme.  

The mechanism would operate by applying a price on emissions relating to a wide range of goods. The underlying aim behind the proposal appears to be to reduce carbon leakage.  

Tungsten will follow any developments in relation to the implementation of the proposed carbon border mechanism.  

The National Superintendence of Customs and Tax Administration of Peru (SUNAT) published a draft resolution allowing the issuance of electronic invoices for foreign tourists who do not have a Single Taxpayer Registry (RUC) number. 

SUNAT’s website as per the link above provides further detail regarding the change.  

A new version of the guide concerning the request for authorisation to issue electronic receipts has been released on the government’s website. Taxpayers should use this guide to follow the requirements and instructions for the access to issuing electronic receipts and electronic documents. 

The link can be accessed here: 

https://www.sri.gob.ec/o/sri-portlet-biblioteca-alfresco-internet/descargar/522a42ed-89c4-4ecd-978f-88c1afcd926c/Gu%c3%ada%20para%20solicitar%20autorizaci%c3%b3n%20de%20emisi%c3%b3n%20de%20comprobantes%20electr%c3%b3nicos%2025042020%5b3052%5d%20(1)-1.pdf 

Resolution DGERCGC22-00000052 has extended the scope of e-invoicing to commercial land transport. Commercial transport operators, excluding taxis, are by effect of the Resolution, appointed as exclusive points of issuance of sales receipts and supporting documents. 

Taxpayers who are required to issue invoices should incorporate the e-invoicing scheme into their business, including the commercial transport operators. 

The e-invoicing scheme in Ecuador came into effect on 30 November 2022. 

The Mexican Tax Authorities have published a revised list of foreign providers of digital services on 7 November 2022. This includes foreign providers who are registered for tax purposes in Mexico as of 31 October 2022.  

3 new entities were added to the existing list. 

The revised list can be accessed here: 

DOF – Official Journal of the Federation 

Departing from its former process, the Italian tax authorities have confirmed that they will store e-invoicing data for customers, even without the consultation agreement with the taxpayer.  

Croatia’s local currency is transitioning from the Croatian Kuna to the Euro, effective 1 January 2023.  

Tungsten’s Product and Development teams have facilitated the option to utilise the Euro currency from 1 January 2023, while also retaining the ability to select the Kuna currency when required (for example, for ‘late’ invoices, or debit and credit notes where the original invoice dated is dated prior to 1 January 2023).  

Tungsten is communicating with our Croatian suppliers and buyers regarding the change.