The Ministry of Economy and Digital Transformation and Finance has put the main lines to set the regulation that will regulate the future obligation to issue electronic invoices which will soon affect the self-employed and businesses. The Law for the Creation and Growth of Companies, better known as the Law for Creating and Growing, has been published in the Official State Gazette (BOE) since last October. However, the norm a period of six months, until March of this year, to implement the regulation which will establish the specific conditions of this new obligation.

For now, the government already launched the query on the draft Royal Decree that develops law 18/2022 on the creation and growth of companies in relation to electronic invoices between companies and professionals. Self-employed organizations and other social actors have fifteen days to send your contributions to the Executive before this regulation is finally approved.

This new system will mean a change in the relationship that self-employed people have with the Federal Revenue and a reduction in tax fraud since all collection programs, to be legal, will have to automatically send the invoices to the Treasury, so the Treasury will know in real time what all businesses have sold and spent. In addition, the new obligation, according to the regulation, It is intended to be a tool to combat default suffered by small businesses.

According to the text, “the adoption of the electronic invoice in accordance with the established principles and requirements will allow balancing negotiation powers, promoting the digitalization of smaller companies and professionals, providing transparency in the payment conditions of companies and professionals and Promote compliance with commercial delinquency regulations“.

At the expense of contributions and changes proposed by social agents, there are already some questions that seem to be clear on the regulation that will regulate this new obligation. One is deadlines. When this regulation is approved, companies with an annual turnover of more than eight million euros will be required to invoice electronically from twelve months after the regulation is approved. The rest of the companies and professionals -which would be the majority of Spanish freelancers and SMEs- will have 24 months to adapt after approval of the regulatory development.

In addition to the deadlines, the draft regulation placed in public consultation also advances how the “architecture” will be or guidelines on which the new regulation that develops the system for issuing electronic invoices for freelancers and businesses.

The main lines of the new electronic invoice system for freelancers and companies

The regulation has already outlined the eight lines on which the new obligation will be based for the self-employed to bill electronically. These are:

  • 1. An intermediate system

The regulation must be based on a network of electronic invoice exchange platforms (existing and future) subject to a minimum regulation in terms of information security, transmission and authentication capabilities and use of the different accepted electronic invoice syntaxes.

  • 2. Public system for exchanging invoices with the Tax Authorities

The regulation should complement the billing obligation with the implementation of a public system of basic exchange of invoices provided by the Public Administration andn in which the issuers of electronic invoices or their designated platforms will have the obligation to deposit them in a single format at the headquarters of the Tax Agency, which will formally validate them and make them available to their recipients or their representatives or platforms on the same campus .

  • 3. Format that allows operating

The regulation must impose that the systems are interoperable, thanks to the technical capacity of the IT solutions and the platforms of translate the different most used structured formats in our country and based on international standards that will be admitted; without prejudice to the possibility of establishing a reference standard for forwarding to Public Administrations.

Regulatory development must ensure the interconnection of platforms, so that each user only needs to connect to one platform, since private electronic invoice exchange platforms have the obligation to interconnect with any other platforms that request it provided they meet the minimum requirements.

  • 5. Able to change invoice payment dates

The new regulation must ensure that the systems can exchange, in addition to the electronic invoice, information on the date of actual payment of invoices so that it can be transmitted between the parties and the Public Administration for your follow-up.

  • 6. A special system for use by SMEs and freelancers

The obligation must be imposed in a special way to support its use by SMEs and self-employed workers, through longer transitional periods, facilities for exchanging electronic invoices through the public system of exchanges and the aid of the digital kit.

  • 7. Transparent system to combat late payment

The regulation should promote transparency as a weapon against abuses in terms of payment suffered, especially by small companies

  • 8. Compliance with tax obligations

Regulatory development must take into account the respect for tax obligations and ensure the complementarity of systems with the presentation of tax models to Public Administrations.

What specific and general requirements must the electronic invoice comply with?

The Electronic Invoice has the same legal effects than a paper invoice, that is, it is proof of billing for products or services. Therefore, it must meet the same requirements as paper invoices (readability, authenticity, deadlines…) and include the same information. This document has a structured format, that is, it uses an XML language that facilitates its automated processing. This format allows the generation and processing of electronic invoices automatically by computer systems

According to the Cria e Crescer Law, these electronic invoices must meet a series of requirements to be legal. These are:

Conditions for systems to be legal

In addition, conditions that programs must meet to be legal are included in the in another project that the Government placed in public consultation last year. The text continues to be constantly modified and has received several complaints and observations from specialists and entities from different areas, such as the National Federation of Autonomous Workers Associations -ATA-, which asked for clarification on some Concepts such as the deadlines in which these programs will have to send the invoices.

These are the conditions that billing systems must meet to be legal:

  • For each delivery of goods or provision of services, you must generate, simultaneously or immediately before issuing the invoice, a registration charge record.
  • It must guarantee the integrity and inalterability of the billing records so that, once the billing data is registered, they are protected against any action that compromises the accuracy, authenticity and completeness of the stored data, so that none of the registered data is changed , nor by the computer system itself, nor by the user or by any external computer or electronic device, system or program.
  • It must also guarantee the traceability of billing records, which must be chained in such a way that their traceability can be verified following their creation sequence from first to last. The computer system must provide functionalities that allow the monitoring of recorded data in a clear and reliable way.
  • Have all billing records generated by the computerized system itself.
  • Having an event log that automatically records all interactions with said computer system, operations performed with it, and events that occur during its use, such as starting and stopping the computer system
  • In the computer systems that support billing processes, information with tax significance must be duly dissociated from any confidential information of a non-patrimonial nature, so that the Tax Administration can directly access information with tax significance.

What sanctions would the self-employed worker incur for non-compliance with the obligation to issue an electronic invoice?

The norm includes important sanctions for companies that do not issue their invoices within the period stipulated by the Lei Cria e Crescer. From 2024 or 2025 – depending on the turnover of the business-, self-employed workers who do not comply with the regulations and do not offer or facilitate electronic invoices may be sanctioned with up to 10,000 euros fine. This will also prevent them from accessing subsidies, grants and public contracts.