Electronic Invoices (E-Invoices) For the Spanish Market

First of all, I would like to aim that there are numerous synonyms for electronic billing: digital invoicing, electric billing, electronic invoicing, e-billing, e-invoicing, telematic billing, telematic invoicing, etc.

What exactly is a digital Invoices or e-Invoices?

A digital invoice (also known as an e-invoice or e-Bill) is a billing technique that does not call for a paper copy as a backup to show its authenticity. This is why, an electric invoice functions as a software-generated file, which compiles the data to a commercial transaction, its payment and matching income tax obligations.

Although we understand perfectly, what a charge is, its technical definition is "a document that reflects the delivery of a product or the supply of services, together with amount to be paid in consideration."

All invoices, regardless of the manner in which they're sent (whether in writing or in digital structure), must include a number of mandatory fields. Article 6 of Royal Decree quantity 1496/2003, Spanish law, which regulates the information of a charge, creates these areas as:

- Charge number

- Distribution date

- Sender's and recipient's legal name

- Sender's and recipient's Tax ID number

- Sender's and recipient's legal address

- Transaction description (taxation base)

- Taxation rate

- Taxation amount

- Date of solution (if various from the distribution time)

To be able to follow with laws and make certain that a digital charge has the same appropriate legitimacy as a report invoice, the corresponding electric document must include the same required industries as virtually any invoice, must be signed with an electronic signature to a recognized certificate and must be sent from a single computer to another with all the events' shared permission. This mix of factors provides a Telematic Invoice with adequate dependability to be able to indisputably assure its integrity while the authenticity of its beginning.

Electronic invoices supply is an important method of decreasing the expenses of handling, delivering, circulating and maintaining invoices, leading to a simplification of administrative processes and a significant decrease in the quantity of  time consumed, because the invoices are sent through telematic means, accomplished by using specialized official certification systems (electronic signatures), which guarantee the standard components necessary in any invoice (the credibility of their source, integrity of their content) and enable them to be preserved in digital format, which affords immediate access to them at any provided moment.

Electric invoices contain all of the details necessary in a conventional report invoice in an encrypted format, including data in the sender and receiver by their name and taxation ID number, the time for the charge, the sender's appropriate target, the quantity of the invoice additionally the percentage and amount of VAT, among other details. Here you can also check the Sample Business Invoice for more knowledge.

Additionally, the document includes an electric signature that is produced by using a digital certificate provided towards the transmitter for the charge by a Taxation Agency-approved certificate organization. This combination of aspects provides a digital Invoice with sufficient reliability to be able to indisputably guarantee its integrity additionally the authenticity of their beginning.

Electronic invoices motivate organizations to discontinue the utilization of paper invoices, replacing all of these with an electronic type of an electronically-generated taxation document, which features the same legitimacy once the standard variation and preserves a faithful record of all of the of the commercial deals. This means, the whole payment procedure can be administered electronically. But, you should keep in mind that amount of Value Added Tax needs to be integrated on every charge.

Advantages of Implementing Electronic Invoices (e-Invoices or e-Bills)

Based on a company's amount, the savings associated with invoice management (receipt, storage space, search, signing, returning, repayment, delivery, etc.) can fluctuate between 40% and 80%. A few regarding the grounds for this cost savings are:

- Timeliness, in both receiving and sending the information

- Savings on report supplies

- Ease of auditing

- Increased safety and document control

- Decreased opportunities for falsification

- Easy access towards the information

- Decrease in the area necessary for saving archival documents

- Quicker and much more efficient management procedures

Automating procedures can be an integrated answer, which optimally controls these tasks, outcomes in a right proportionate, decline in options for human being error while enhancing the options for savings and enhanced performance. Also choices can be handled instantly, giving the corresponding overdue notices as pre-defined thresholds are achieved.

Moreover, when organizations use this technology, they are inspired to digitalize other documents, hence attaining effectiveness and savings in extra locations for the company. Control over taxes is also increased with electric payment that it allows for greater control over taxation conformity and simplifies the auditing process.

The main Laws Governing Electronic Invoices (e-Invoices or e-Bills)

In Spain, Directive number 115/2001 usually applies, although these laws strengthened in nationwide plan, specifically in these regulations:

- Royal Decree quantity 1496/2003 Billing Regulations.

- Royal Decree quantity 87/2005 Amendments to Billing Regulations.

- Ministerial Mandate number EHA/962/2007 of April 10th (entered when you look at the Federal Registry on April 14th, 2007), which develops specific provisions for telematic billing and electronic storage space of invoices, elaborating on Royal Decree number 1496/2003 of November 28th, where the laws governing payment-related responsibilities were adopted.

- Ministerial Mandate number PRE/2971/2007 of October 5th (entered within the Federal Registry on October fifteenth, 2007) regarding invoices given through electronic means whenever the receiver is the General State Administration or a public organization connected with or dependent upon it, since well as the submitting of invoices issued by people to the General State Administration or even the public organizations that are connected with or centered on it.

Various self-governing provincial councils (in Alava, Guipuzcoa, Navarra and Vizcaya) have actually reproduced these exact same laws, appending an interpretation of those in Basque dialect.

Forms of Electronic Invoices:

An electric invoice is one which fulfills the same requirements that implement in writing, except so it is provided in electronic structure and its credibility and integrity are guaranteed. To be able to guarantee a document's credibility and integrity, there are three possible techniques:

- Application of an acknowledged electronic signature that is according to a recognized certification and generated using a safe unit for creating signatures.

- Remittance through an "EDI" system, which guarantees stability and authenticity.

- Usage of another system which, in the viewpoint for the Auditing division of the State taxation department, guarantees authenticity and stability, anytime the taxpayer providing the charge features applied for Agency approval for the system in concern.

As a whole, the usage a recognized electric trademark is considered to be an important component of electronic invoices.

The Conversion of Paper Invoices into Electronic Invoices and Vice Versa

The recent publication of Ministerial Mandate quantity EHA/962/2007 defines the weather essential for changing report invoices into their electronic equivalent, developing that the digitalization process must guarantee that the result is a faithful reproduction associated with the original, paper document and that the digitalization device (scanner) must produce the picture along with a Qualified Electronic Signature (since defined in Directive quantity 1999/93). The procedure by which this might be carried out is designated as "Certified Digitalization."

Moreover, these laws state that electronic invoices can be transcribed in writing, including the graphic marks certifying their authentication, relating to PDF 417 specifications, as set forth in Resolution number 2/2003 of February 14th of 2003 associated with the General Board with the State Tax management department, covering specific aspects pertaining to telematic billing.