This is not the first time we have addressed this topic in our blog, and given its importance, it will not be the last. Once again, we are talking about the Create and Grow Law, the key regulation for digital invoicing for the entire Spanish business community. Although this regulation has already been published in the Official State Gazette (BOE), it has not yet come into full effect nor has it been fully implemented, as it is being phased in gradually. At easyap, we have learned about several changes that will be made to it, and we would like to use this space to discuss them in depth. Below, we reveal the updates to the Create and Grow Law in the coming months.
What the Create and Grow Act covers so far
First of all, in case you are not yet familiar with the regulations, we will briefly explain what the Create and Grow Law is. It is a regulation that was implemented to promote the use of electronic invoicing among Spanish companies and the Public Administration.
This law has its own official name, under which it was published in the Official State Gazette (BOE): Law 25/2013, of December 27, promoting electronic invoicing and creating an accounting register for invoices in the public sector. The regulation basically establishes the obligation to issue and receive electronic invoices for certain types of commercial transactions. In turn, it was published on September 29, 2022.
Its main objective was to promote modernization and streamlining of administrative and commercial processes. To this end, this legislation promotes the use of electronic means for invoicing, which helps reduce the use of paper and the costs associated with managing invoices in this physical format.
Although it was approved last year, this legislation set progressive deadlines for the adoption of electronic invoicing for suppliers working with public administration entities. The aim was for all of them to gradually integrate this system and for the measures to subsequently be integrated into the entire business fabric. business community.
In any case, in this article we provide more in-depth details on everything related to the Create and Grow Law.
The latest changes and updates to the Create and Grow Act
The fact is that after the Spanish Ministry of Finance and Public Service approved this law, a significant political event has taken place: the early elections.
Now, following the formation of a new central government, which is the competent body for this regulation, several adjustments provided for in the Create and Grow Act will be approved over the next four years. At easyap, we recently had the opportunity to meet with representatives from the government and the Tax Agency , who have given us a preview of several of these changes. Here is a preview.
Change in deadlines
One of the main ones will be the one relating to the deadlines for reporting and issuing invoices. Between April and May 2024, a new year will begin for companies. Following this business calendar, companies will now communicate their billing data as follows:
–– Communication to the European Commission within three months.
– Report to the Council of State of the Government of Spain within 4 months of the approval of the Create and Grow Law.
– In turn, March 2024 is established as the deadline by which companies must comply with what is already published in the regulation. In other words, they have a period of one year from then on.
Companies that must now comply with the Create and Grow Act
Also, in terms of deadlines, it is important to clarify which companies must comply immediately with the provisions and amendments contained in this update to the Crea y Crece Law. In this regard, all Spanish companies that issue more than 8 million invoices per year must comply with the provisions of the law. In other words, electronic invoicing. These companies are also required to:
– Report the total turnover.
–– Issue any invoice in electronic format.
But it is not only large companies that will be affected by the law. The rules and regulations on electronic invoicing will also apply, albeit not as quickly, to small and medium-sized enterprises. Specifically, anyone with a turnover of less than €8 million has a period of two years to implement an electronic invoicing process.
In summary, regarding the deadlines that Spanish companies will have to issue and report on their electronic invoicingare as follows:
– Large companies (with annual revenues exceeding €8 million): they have 12 months to implement a fully online invoicing process and to report all their invoicing electronically.
–– SMEs: small and medium-sized enterprises have 24 months to implement an electronic invoicing system, although the deadline for issuing invoices online will be 12 months.
–– Self-employed professionals: self-employed workers will have a period of 36 months, or 3 years, to implement a digital invoicing process and to report this process electronically to the Tax Agency.
Electronic invoice formats: Facturae by UBL
Another of the most important points that had not yet been finalized was the electronic invoice formats that would be accepted. The format of the invoices issued by companies, and therefore received by the Tax Agency, still had to be defined.
In this regard, the agency itself they confirm that the format accepted by the AEAT will be Facturae, due to its use in FACE for issuing invoices to public administrations because of the low level of digitization in Spain. Initially, it was thought to implement the UBL formatformat, due to its widespread use in Europe as the format of the PEPPOL network. However, the Tax Agency has confirmed that it will once again be Facturae.
Even so, while it is being implemented, formats such as XML, the aforementioned UBL, EDI, and EDI will continue to be valid. PEPPOL will also be included. At the same time, FACeB2B until the electronic invoicing regulations.
What if the format does not match due to system incompatibility?
When companies implement electronic invoicing systems, there may be incompatibilities between the formats used by the issuer and the recipient. At that point, operators such as easyap will have to adapt and change the formats according to the interests of the issuer and recipient.
That is precisely why it is important to have a trusted operator who is proficient in handling a variety of solutions. So, if the sender sends it in one format and the recipient is interested in another, guarantee companies, such as easyap, will process and adapt the solution to each client.
However, if there is no operator capable of reconciling two different formats, the provisions of the Crea y Crece Law will prevailwill prevail. In other words, in that case, the format required by the public system will be used.
The operation of the SII remains unchanged.
At the same time, another aspect we wanted to address was the how the SII works. If you are unfamiliar with this acronym, in this article on the SII we explain in detail what it is, what it is used for, and why it is mandatory and important for invoicing, taxation, and tax purposes.
But focusing on what could change with regard to the SII, the answer has been clear and direct: The SII will continue to operate as it has until now. In other words, nothing will change. It will continue to be a completely independent system and will not be affected by the updates to the Crea y Crece Law.
In short, the SII will continue to be important and necessary as a tool for tax reporting, regardless of electronic invoicing itself.
Payments are communicated by the recipient and issued by the supplier.
In turn, at easyap, some customers ask us who should report the payment of an electronic invoice. The Spanish Tax Agency (AEAT) has confirmed that once an invoice has been paid, the recipient of the invoice is responsible to report it. They also point out that the payment information is the value date of the recipient, although the supplier may report the actual payment date.
For its part, the issuing company continues to have the obligation to communicate the issuance of all its electronic invoices.
Webinar on November 28 on changes to regulations
You may find this information about the changes to the Crea y Crece Law somewhat overwhelming. Or perhaps you simply want to delve deeper into a specific aspect. In any case, don't worry, as we will be breaking down all these aspects in a new webinar:
– Date: Tuesday, November 28, 2023
– Time: 11:00 a.m. CET
– Online webinar: "News about the Create and Grow Act"
At this meeting, you will mainly be able to obtain exclusive and valuable information on the following points discussed with the Tax Agency:
- Detailed explanation of regulatory requirements.
- Practical strategies for implementing the necessary changes in your organization.
- Guarantee of compliance with the law.
If you have any further questions, we will be happy to answer them live during the session.
