Electronic invoice

An electronic invoice is a digital document generated and transmitted electronically through electronic means such as email, web portals, or specialized systems. It contains detailed information about a commercial transaction, such as the description of the goods or services, the price, applicable taxes, etc., and its use streamlines and simplifies the invoicing process, reduces costs, and increases transparency in commercial transactions.

What is the Electronic Invoice?

Electronic invoicing is nothing new in Spain, as it has been used for quite some time without legal obligation. However, the Ministry of Finance is in the process of implementing innovative legislation that will make electronic invoicing mandatory for all business-to-business (B2B) transactions.

This shift toward document digitization seeks to introduce a specific, digital, and comprehensively regulated invoicing system. The key objectives of the e-invoicing initiative in Spain are:

1. Optimize and automate processes related to corporate financial management.
2. Improve punctuality and efficiency in payment processes.
3. Increase the efficiency of Value Added Tax (VAT) collection.

This e-invoicing adoption strategy aligns with a broader European Union plan, known as VAT in the Digital Age (ViDA), which seeks to promote the implementation of e-invoicing and digital reporting across Europe.

The implementation of electronic invoicing in Spain is expected to take place between 2024 and 2026. The specific details and regulations governing this new system were established in the "Crea y Crece" law, enacted in September 2022.

Spain, along with other European Union member states such as France and Portugal, is leading the way toward tax modernization with the adoption of e-invoicing. This move reflects a collaborative effort at the EU level to transition to a more digital and efficient era in tax management.

Who is required to issue electronic invoices in Spain?

In Spain, all businesses and professionals are required to issue electronic invoices for business-to-business (B2B) commercial transactions. However, transactions conducted directly with end consumers (B2C) do not yet require compliance with electronic invoicing regulations.

Furthermore, issuing electronic invoices in Spain is not mandatory in the following specific situations:

• In the case of transactions carried out with entities located outside Spanish territory.
• When simplified invoices are issued under certain specific conditions, which are detailed in Article 4 of Royal Decree 1619/2012.

When will mandatory electronic invoicing come into effect in Spain?

The Ministry of Economy, Trade, and Enterprise, together with the Ministry of Finance, have submitted the draft regulatory implementation of the Create and Grow Law to the European Commission. This law stipulates that electronic invoicing will be mandatory for all business transactions, including those for the self-employed, in Spain. The Commission must give its approval in May, and the Government will then publish it. However, most businesses and professionals will not be subject to this regulation until 2025 or later.

The implementation of this regulation will be carried out gradually, following a phased approach based on the entities' turnover, prioritizing those with the highest revenues.

The provisional plan for its implementation is as follows:

First, companies with an annual turnover exceeding €8 million will be required to adopt electronic invoicing and will have one year to implement it from the publication of the Regulation by the Government.

All other companies and professionals with a turnover of less than €8 million will have two years to implement electronic invoicing following the government's publication of the regulation.

Key Elements

Accepted structured formats:

• EDIFACT
• FacturaE
• CEFACT
• UBL

(The previous four formats are developed in 2.6. Format of the electronic invoice in Spain

Regardless of the format chosen, additional content must be included, and this information must be managed in a specific way.

Invoice statuses:

Mandatory: Acceptance/Rejection + Payment + Notification to your supplier and the AEAT

Optional: Sending the invoice in another non-mandatory format (e.g. PDF).

(Described in detail in 2.7 Requirements for electronic reporting (e-reporting) in Spain )

New roles of the Tax Agency:

• Repository of electronic invoices or true copies.
• Public Solution Developer.
• Receiver of the Payment status and generator of the report to the Commercial Delinquency Observatory.
• The traditional role as recipient of the tax report that is not an electronic invoice for companies with a turnover of more than 6 million euros.

How does electronic invoicing work in Spain?

The electronic invoicing system in Spain is organized by several key players, each with specific functions to ensure a regulated and efficient process:

1.- Public Electronic Invoicing Solution: Managed by the State Tax Administration Agency (AEAT), it offers an official framework for issuing and receiving electronic invoices, ideal for self-employed individuals or small businesses with an ERP.

2.- Private Electronic Invoicing Platforms: These platforms must comply with the standards of Royal Decree 1007/2023, guaranteeing compatibility and security in the processing of electronic invoices. Companies with revenues exceeding €8 million will generally require these platforms, which must support specific electronic invoice formats such as FacturaE, UBL, CEFACT, and EDIFACT, depending on the provider.

3.- Issuing Companies: Responsible for creating and sending electronic invoices, using both the public solution and private platforms.

Companies required to issue electronic invoices may opt for the AEAT's public solution or third-party invoicing systems. These solutions, whether public or private, are designed to interoperate, allowing for secure and efficient communication between them.

4.- Receiving Companies: They receive electronic invoices and must process and manage them in accordance with current legislation.

In addition to the technical aspects, there are specific obligations for the actors in the e-invoicing system, including the companies that issue and receive invoices, as well as e-invoicing service providers, who must ensure compliance with the legal and technical requirements to promote the transparency, efficiency, and security of the system.

Rules for complying with Spanish electronic invoicing

Spanish regulations establish specific requirements for electronic invoicing, ensuring proper implementation and administration of the system.

• Issuing and receiving electronic invoices: Companies and self-employed individuals must create, send, and receive electronic invoices through authorized private platforms or through the AEAT's public solution.
• Invoice registration: Those who do not use the public solution must send copies of invoices in Facturae format to the AEAT for thorough follow-up.
• Invoice information and status: Issuers and recipients must provide updated data on the status of invoices with digital reports.
• Interconnection and interoperability: Private providers must guarantee interconnection and compatibility between different technologies and platforms, allowing communication between users of various systems.
• Invoice Retention: Recipients must maintain access to electronic invoices for four years to comply with archiving regulations.
• Viewing, downloading, and printing: Service providers must enable users to view, download, and print electronic invoices.

In addition, to fully comply with the regulations, companies and professionals in Spain must electronically keep these records:

• Record of invoices issued.
• Record of invoices received.
• Investment asset registry.
• Registration of certain intra-community transactions.

This set of rules aims to promote efficiency, transparency, and security in the billing process.

Format of the electronic invoice in Spain

Royal Decree 1007/2023 has been a significant step in the standardization of electronic invoices, ensuring their functionality and legality in the system. These measures aim not only to standardize the electronic invoicing process in Spain, but also to increase confidence in electronic transactions, guaranteeing the authenticity, integrity, and acceptance of digital invoices.

Two fundamental requirements for its issuance stand out:

First , electronic invoices must adhere to a standardized format that is compatible with current technology. Recognized formats include:

• XML CII: A universal UN CEFACT format, applicable to any type of invoice.
• UBL (Universal Business Language): Used for invoices and credit notes, in accordance with ISO/IEC 19845:2015.
• EDIFACT: A standardized format under ISO 9735 for electronic invoicing at the national level.
• FacturaE: Specific to Spain, based on XML signatures and compliant with the XAdES standard to ensure security and authenticity.

Second , it is essential that the origin and content of each electronic invoice be verifiable and secure. The Spanish government requires that authenticity be confirmed through:

• EDI (Electronic Data Interchange) Technology: Through a service provider, the secure transmission of electronic documents, including invoices, between business entities is facilitated.
• Advanced Electronic Signature: In accordance with the eIDAS Regulation, this signature validates the identity of the issuer and the integrity of the document.

Electronic reporting (e-reporting) requirements in Spain

E-reporting is a key element of Spanish legislation on electronic invoicing. This legislation requires buyers not only to receive electronic invoices, but also to effectively and accurately report their status. This procedure promotes transparency and allows for effective monitoring of commercial transactions, strengthening the integrity and reliability of the electronic invoicing system in Spain.

The states that must be reported to the tax administration include:

• Acceptance or rejection (total or partial) of the invoice, indicating the date of such decision.
• Full payment of the invoice, with the date on which said payment was made.
• Split payments of the invoice, specifying the amounts and dates of these payments.
• Transfer of the invoice to a third party for collection or payment, stating the name of the transferee and the date of the transfer.

Penalties for failing to comply with electronic invoicing in Spain

Failure to comply with e-invoicing legislation in Spain can have serious consequences, ranging from notifications for late payments to penalties for poor accounting. Under current regulations, a fine is imposed for each e-invoice reported late, which can be up to 0.5% of the total transaction value. Penalties range from a minimum of €300 to as much as €6,000 per quarter. Therefore, late notification of multiple invoices can lead to substantial fines.

Likewise, failure to maintain proper accounting records can result in fines ranging from €150 to €6,000. For companies operating in Spain, it is essential to follow the accounting principles of the International Financial Reporting Standards (IFRS), which provide a global standard for business accounting and ensure transparency and consistency in the presentation of electronic financial statements.

What features does our electronic invoicing solution offer?

Our tool is designed to simplify and automate the administrative processes of freelancers, SMEs, and professional firms. With it, you can quickly create, send, and receive electronic invoices, monitor your payments and collections, and maintain seamless communication with your consultancy—all from a single platform accessible from any device. We also guarantee compliance with current tax regulations, both national and European.

How can our app help you improve your business's financial management?

Managing a business's finances isn't always easy, especially when administrative tasks multiply. Our electronic invoicing application is designed to help you gain greater control over your income and expenses, automate key processes, and reduce errors—all from a streamlined, secure, and accessible digital environment. Below, we answer some of the most frequently asked questions so you can discover how it can help you in your daily work.

What advantages does it offer me in invoice management?

You'll be able to create and send electronic invoices in a matter of minutes, without any complications. Our technology also allows you to receive invoices from your suppliers and automatically digitize them using optical character recognition (OCR), avoiding errors and saving time.

How does it help me better control my payments and collections?

The platform connects to your bank accounts so you can automatically reconcile transactions. You can also manage collections and make payments directly from the app, including automatic reminders and payment buttons to streamline the process.

Are you compliant with tax regulations?

Yes, our solution is ready to comply with current and future legislation. We are connected to official networks and facilitate the submission of reports and digital invoices required by the Tax Agency.

Can I work from anywhere?

Of course. Our app is cloud-based and also has a mobile version, so you have full access to your finances wherever you are.

Main features of our solution

Conclusion

Electronic invoicing is not only a legal obligation for many companies, but also an opportunity to digitize and simplify financial management. Having a solution that automates processes, ensures regulatory compliance, and facilitates income and expense control will make a difference in the efficiency of your business.

If you're considering options for making the switch to electronic invoicing, we can help you find a solution tailored to your business. We'll be happy to answer your questions and guide you through the process whenever you need.