Electronic billing

Learn about legal requirements, software rules and compliance

Over the last two (going on three) years, electronic billing has been a topic that has been on the table not so much because of its importance and mandatory nature for entrepreneurs, but because of the delay in the approval of the regulation to which it is subject. 

Although the electronic billing law came into force in 2022, last Tuesday, April 1, the Council of Ministers approved the extension of the deadline, until 2026, for companies and professionals to adapt their invoicing programs to the new electronic invoicing obligations. Specifically, legal entities must do so until January 1, while the self-employed will have until July 1 next year. 

Electronic billing is based on the following regulations: 

• On the one hand, Act 18/2022 of 28 September, on the Creation and Growth of Companies (the CREA Y CRECE [CREATE AND GROW] Act), which gives rise to a new billing system and which, in turn, puts into place:

1. the basis for mandatory electronic billing in the private sector, i.e. for purchases and sales between the self-employed or companies,
2. the setting of deadlines for its implementation, when the electronic billing regulation is approved:
3. 1 year for companies with an annual turnover of over €8M
4. 2 years for the self-employed and companies with an annual turnover of less than €8M 

All of which is chiefly geared towards promoting the creation of companies and encouraging their growth through regulatory improvement, eliminating obstacles to economic activities, reducing commercial delinquency and financially supporting business growth.

• And on the other hand, Royal Decree 1007/2023 of 5 December, approving the Regulation establishing the requirements to be adopted by computer or electronic systems and programmes and the standardisation of billing record formats:

1. which also regulates billing, accounting and management programmes for the self-employed and companies.
2. Its purpose is to fight tax fraud arising from dual-use software: software that can be used to keep two sets of books. 

This Royal Decree will be followed by the Ministerial Inland Revenue Order, currently being processed and pending approval, which develops and technically details those aspects included in the Regulation. 

Implementation of electronic billing

As far as the implementation of electronic billing by entrepreneurs is concerned, there are two possibilities:

1. On a voluntary basis, with the possibility of immediately submitting billing records to the administration. The design of the system, called VERI*FACTU, complies with the requirements of the Regulation.
2. Through a computer system that complies with the requirements of the preservation, immutability and inalterability of records.

The advantage though will be that compliance will not be obligatory for taxpayers who are part of the SII (Immediate Provision of Information), or who are part of the Canary Islands and Provincial Councils.

It is important to bear in mind that until all these measures come into force, companies must check whether the software used for billing is certified, so that the suppliers of said programmes can gradually approve their computer systems in line with the new electronic billing system.

What is for sure is that entrepreneurs and the self-employed will be required to digitise, if possible even more so, the management of their businesses in a more or less short space of time, given that its implementation is set for 1st January 2026.