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

Why you need e-Invoicing Strategy for your SAP?

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.

So, there is “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.

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.

Tax gap value stats in the UK

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.

Value of the VAT gap in the United Kingdom.

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.

Another fascinating stat comes 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) is 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, SII is introduced on 01.07.2017 and affecting around 80% of Spain’s total business turnover. Using the e-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 B2B transaction-level reporting in 2018 July, called RTIR to reduce the VAT gap.
  • In Greece, the tax authority introduced a brand new application called e-Books, which will ask taxpayers to submit their income and expenses on 1 January 2020, so that tax authority can trace VAT transactions and audit if possible.
  • 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 is 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.

Why you should 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 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.

How Foriba SAP Global Cockpit can help your business?

Foriba SAP global cockpit landscape.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.

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

FAQ: 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!

Foriba global tax and e-invoicing solutions.

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.

The 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.

Why Foriba is the right address for your business?

Foriba supports the enterprises for the development of their software and integration services. Providing services to more than 13,000+ companies in a worldwide, Foriba digitizes the financial and accounting processes of its users.

Foriba has been included in the list of Representative Vendors Supporting e-Invoicing Solutions in the Gartner report entitled “Competitive Landscape: E-Invoicing, Worldwide.” in March 2019.

After that in August 2019, Sovos, a leading global provider of software that safeguards businesses from the burden and risk of modern tax acquired our company.

Sovos’ mission is to help Solve Tax for Good aligns with Foriba’s goals to solve most critical compliance challenges.

Over time, Foriba will be integrated into the Sovos Intelligent Compliance Cloud to extend the industry’s first global solution for e-Invoicing compliance and Real-Time Reporting, including a complete solution for Europe, covering VAT reporting, e-Invoicing, and e-Receipts.

Discover our solutions for your country. We are always happy to answer your question to determine your needs to provide the best experience!

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