2022 is set to be a year of enormous change in the world of digital business compliance. To help businesses prepare, our experts have put together the answers to three commonly asked questions regarding e-invoicing compliance in 2022.
Every day I interact with multinational business leaders in tax, finance and IT, all suffering from similar headaches. I see IT departments that need to build and maintain an ever-increasing list of formats and connections and CFOs who are frustrated with juggling multiple service providers in multiple countries. Then, there are Tax Directors who can foresee what’s around the corner; more mandates, more variety and (unless a global solution is found) more connections, more contracts and more fees … Leading to more frustration!
It’s time to prepare for big changes around e-invoicing compliance in 2022
Businesses of all sizes and industries need to anticipate an incredibly significant year for e-invoicing compliance in 2022. The last few years have been busy enough, with B2B e-invoicing mandates being introduced in Italy and India, along with various B2G mandates. Plus, phase 1 of the mandate in Saudi Arabia and things are starting to heat up!
Saudi Arabia integration phase commences in Q1 2023, businesses need to get ready right now.
Poland has been a hot topic, with mandatory adoption of e-invoicing postponed for 8 months, from 1st April 2023 to 1st January 2024.
Maybe it was a blessing that France has postponed from 2023 to 2024, as the French Mandate truly is the largest confirmed item on the compliance roadmap right now.
2022 is also the year that many predict confirmation of new regulations coming out of Japan, Belgium, Spain, Australia, Germany, Slovakia, Romania, the Philippines, and more! There is an expectation that legislation will also continue to evolve in China, too. As ever, our in-house Regulatory Affairs team stays busy keeping us and our customers up to date.
Most multinationals are present in many, if not all of these markets, and the avalanche of legislation and requirements is impossible to tackle alone.
Here are 3 fundamental questions that I am regularly asked around e-invoicing mandates and compliance, to give you a head-start and help you prepare for developments in the year ahead.
1. Are all e-invoicing mandates the same?
No, it is surprising how many businesses still think they are. It’s vital to understand how they differ and where the market is heading.
Mandates in different countries can impact different areas, whether it be B2B, B2G or B2C, as well as utilising different models. With plenty of countries having adopted e-invoicing already, it is only a matter of time before you see initiatives being announced in further locations, with their own preferences.
Poland is a great example; SAF-T reporting was established there five to six years ago, now there’s a drive towards mandatory e-invoicing for all taxpayers. There is no doubt other SAF-T enabled markets will look to follow suit.
You need to ensure that you understand the differences between models so you can prepare effectively when doing business across borders, involving different markets.
I highly recommend watching our webinar with Deloitte, on e-invoicing and e-reporting compliance, which explains all of this in detail.
2. Do e-invoicing mandates only apply to outbound invoices?
This is one of the biggest myths around.
While, historically, it’s fair to state that everything starts with the invoices being sent, things are rapidly changing. Italy, Turkey, Poland, Saudi Arabia and France are all great examples of markets where the focus is also on inbound invoices, whether that be collecting e-invoices via a government platform, verifying a QR code or working with a service provider, like Pagero, to automate a flow into accounts payable systems. The aim is to reduce the amount of pressure on your team from increasing manual tasks.
Customers are becoming more aware of the mutual need for ‘compliance + automation’ in AP as well as AR.
3. Is there an easy, one-off fix?
Unfortunately, no; government legislation never stands still. Leading up to a mandate, requirements will change. Once it goes live, it’s simply a case of, “what’s next and when?”. Perhaps there’s more scope, expansions to B2B/B2C, new revenue eligibility thresholds, additional document types, payment receipts, purchase orders, cross-border invoices, QR codes, inbound invoices … ok, I’ll stop now, but you get the picture, right?
In the wise words of our very own VP of Regulatory Affairs, Nazar Paradivskyy (who by the way, is an absolute must-follow on LinkedIn):
“It’s not just about becoming compliant; it’s about staying compliant”.
He is 100% right and I know so many IT and tax directors that know precisely what he is talking about as a result of past and present projects and pain points.
Now for the good news!
Our mantra at Pagero is ‘One connection – global reach’.
If you ask most IT or tax directors what they want in this area, the above four words would sum it up perfectly.
Accessing a single connection that has global reach is not just a wish or a dream; it’s essential for any global business that wants to get this right without completely wiping your tax, finance and IT resources for years to come. This is what we strive to achieve for our customers at Pagero.
Plus, we are not just a technology solution. We are a trusted partner that will keep you up to date with everything that happens in your desired markets via our dedicated, in-house experts. Not to mention our innovative reporting dashboards that link into various government systems.
We would love to hear your views on this topic and are always open to discussions with companies around the world that have challenges, opportunities and solutions in this area.
Please feel free to get in touch below or, alternatively, connect with me on LinkedIn here.
In the meantime, you can book a call below with one of our experts to explore how we can help your business evolve and prepare for any upcoming developments.
This text was originally published 15 February 2022 and last updated 8 August 2022.
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