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:
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 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
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.
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;
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!