Why you need e-Invoicing strategy for your SAP system.

Why You Need a Long-Term e-Invoicing Strategy for your SAP System

In the very beginning of the digital transformation, much business was ahead of tax administrations in terms of completing everyday tasks such as record keeping and accounting. In many other countries, most obligations for indirect taxes carried on paper-based, so there was a considerable amount of manual process.

However, on these days, digital governments emphasize the importance of mandatory electronic tax compliance for businesses.

There is a global transformation as tax administrations are using technology more than ever before to examine the taxpayer’s data in various countries. Of course, the payment preferences, as well as the other metrics, differ from country to country.

Using e-Invoice is now a mandatory obligation, and there are many other penalties for non-compliance. It is clear that countries are facing different challenges and motivating factors. That is why we can say, e-Invoicing adoption varies around the world.

In a nutshell, we can call this process; “worldwide adoption of digital transformation” and of course, it takes time.

For the very reason, you need a long-term e-Invoicing strategy, especially for the SAP environment. In this article, I will try to describe the main reasons for that frame.

Many Countries Worldwide are Making e-Invoicing Mandatory

We can describe the VAT gap as the difference between the expected income from VAT and the actual amount collected. For example, LATAM countries like Chile and Mexico have made their e-Invoicing regulations to close the so-called VAT gap.

In 2014, the Mexican government introduced the CFDI law (Comprobantes Fiscal Digital or Internet – Mexican regulation for e-Invoicing). Of course, not only LATAM governments but also European governments developed e-Invoicing regulations based on their countries structure. The authorities believe that the decision has had a very positive impact on the actual taxable income.

Look at the example statistics:

Value of the VAT gap in the United Kingdom.

This statistic shows the tax gap value in the United Kingdom in the fiscal year 2016/17, by tax type. The taxes that make up the most substantial proportion of the tax gap are income tax, national insurance, and capital gains tax. It is estimated that they accounted for 13.5 billion British pounds in lost tax revenue.

As the most widely collected tax for the SAT, Monterrey Technology Institute’s study shows that the obligation to issue CFDI (2015) led to growth in Income Tax to the tune of 6,6% for legal entities and 21.3% for individuals. So, advances on the tax administration avoid fraud and VAT gap.

Other fascinating statistics come from Italy!

Italy is one of the 1st European countries using LATAM e-Invoicing regulations as an example to close the VAT gap. According to the VAT Gap report of the European Commission (2017), Italy had 35 billion euros tax revenue gap which in turn corresponded to 23% of the overall European VAT gap.

Today, it is apparent that most countries across the globe are working on their e-Invoicing laws. From the very beginning of the last year, there have been improvements & updates in e-Invoicing regulations around Europe and Latin America.

Here are some examples:

  • In the United Kingdom, businesses above the VAT threshold (all UK VAT registered businesses above the £85,000 sales threshold) will be mandated to keep their records digitally and using MTD compatible software from 1 April 2019.
  • In Italy, the use of FatturaPA became mandatory for B2B, and B2C levels Transmissions of the e-Invoices are made entirely electronically via SDI on 01.01.2019
  • In Spain, Supply of Information (SII) is introduced on 01.07.2017 and affecting around 80% of Spain’s total business turnover. Using the electronic invoice has been required in relationships between the Public Administration’s subcontractors and main contractors since July 21, 2018.
  • In Hungary government turned its attention to controlling the VAT of sales invoices, by introducing business-to-business (B2B) transaction level reporting in 2018 July, called RTIR to reduce the VAT gap.
  • In Greece, the government introduces the mandatory use of electronic invoices for all B2B and B2C transactions from 1 January 2020.
  • In Guatemala, e-Invoicing is getting ready for gradual adoption of the new FEL model as of 2019.
  • In Colombia, large taxpayers defined in resolution 0076 of December 1, 2016, must comply with e-Invoicing from January 1, 2019.
  • In Argentina, e-Invoicing will be mandatory for all categories of taxpayers with an Electronic Invoice Issuance System (RECE) billing scheme, as of April 2019.
  • In Peru, all businesses listed on major taxpayers are required to use Electronic Services Operator (OSE) as of March 1, 2019.
  • In Paraguay, the pilot project carried out in 2018, and now the SET will begin the period of controlled, voluntary adhesion.
  • In Uruguay, after a period of gradual e-Invoicing adoption, taxpayers are obliged to use this system from 2019.

In Bolivia, SIN informed about the postponement of the implementation of Electronic Invoicing System (expected on August) on February 4th, 2019.

Comply With the Worldwide Country-Specific e-Invoicing Rules

If you have a business which is in action in one of the countries in which e-Invoicing law operates, you have to prepare your SAP ERP system in order not to have penalties or worse.

That is why you need a long-term strategy to be able to comply with country-specific e-Invoicing laws.

It is also essential for your business to be the ideal one in the time ahead. In this case, you should meet your feature requirements with a global regulatory compliance solution for SAP.

Foriba SAP Regulation Cockpit makes you in compliance with the regulatory requirement within the SAP R/3 & S/4HANA.

Foriba SAP Global Cockpit Can Help Your Business?

Foriba SAP Regulation Cockpit keeps you ahead by offering multilingual SAP interface with no effects on SAP standards and upgrades. There is only one integration for multiple countries.

Foriba is trusted by half the Fortune 500 and the world’s best companies such as P&G, CSL Behling, Turkish Airlines, Philip Morris, BP, and Peugeot.

Foriba SAP Global Cockpit Features

  • Closely aligned with SAP
  • %100 Multilingual SAP Interface
  • Easy to adapt to new countries & regulations
  • No effects on SAP standards and upgrades
  • Successfully tested with billions of invoices

Advantages

  • Ability to customize package like SAP user exits
  • Regulation monitoring with tax advisory partners
  • Automated and entirely controlled user interaction
  • Minimize the in-house cost of development
  • Full control of the regulation process
  • Ready to self-implementation

Support

  • Simple implementation
  • Dedicated Project Manager
  • Less time effort
  • Status update from Tax Authority
  • Fast adaptation for regulation changes
  • Ticket management system with SLAs and Escalation Model 7X24 Support – Help Desk

Reliability

Foriba delivers trusted solutions assuming the full legal risk of digital transactions for European customers. Foriba is audited to maintain its status and constantly invest in improving the quality of services and procedures.

  • Information Security Management System 
ISO 270012013
  • Quality Management System
 ISO 90012008
  • Business Continuity Management Systems 
ISO 22301: 2012
  • Service Management System
 ISO 20000:2011

What if my business has subsidiaries in different countries. Can I still issue all my invoices following the features of each country from a centralized ERP?

The answer is yes!

Data integration technology deployed by specialist providers like Foriba automates the standardization of e-Invoicing based on the characteristics of each country with a single data interface.

A Global e-Invoicing solution is a long-term strategy that develops a single data matrix focusing all needed information for constructing different invoices.

It is entirely scalable and can be expanded following the company’s growth in the international scope. In this case, the company’s central ERP, which is the source containing all the invoicing data needed to construct the master file, integrates the solution for workflow centralization.

Here are some of our global solutions;

  • FatturaPa Foriba Cockpit

  • Foriba SAP SII Cockpit

Spain SII Foriba solution.

  • Foriba SAP Hungary RTIR Cockpit

Foriba SAP Hungary RTIR Cockpit.

Get in Touch With Us!

 

Discover our SAP Regulation Solutions for your country! We are always happy to answer your question to determine your needs to provide the best experience! Also, Don’t forget to subscribe our newsletter and keep up-to-date with regulatory news and other updates by following us on LinkedIn, and Twitter!

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