Hungary and Spain introduced the submission of sales e-invoice data to combat VAT fraud as a post-audit method.
Hungary took it one step further. The invoice software of the taxpayer has a direct connection with the Hungarian tax authorities. Taxpayers must submit in real-time their sales invoice, meaning within 5 minutes after the invoice is generated.
Under a clearance model, the tax authorities will audit sales e-invoices near real-time and first validate and approve the supplier's invoices before those invoices are sent to the customers by the supplier or the tax authorities themselves.
However, in China and Mexico, data is already provided to the tax authorities in 'real-time'. VAT only becomes deducible in these countries when the customers can prove that they identified their suppliers using a VAT identification number. The invoice is paid, mentioning the bank account number of the supplier to whom payments are transferred.
In Italy, resident taxpayers submit their sales invoices to the tax authority's platform for approval. The tax authorities forwarded any approved invoices to customers for VAT processing and payment approval. In India, the taxpayer submits a GST e-invoice to the 'Invoice Registration Portal' (IRP). That IRP of GST will generate a unique Invoice Reference Number (IRN), and digitally sign the e-invoice and generate a QR code. In Egypt, certain VAT-registered businesses must issue electronic tax invoices that include the electronic signature of its issuer and the standard code for the good or service subject to the invoice approved by the Egyptian tax authorities.
- The Kingdom of Saudi Arabia (KSA) has announced it will introduce an e-invoicing framework for resident companies with an expected go-live date of December 4, 2021.
- Poland will impose mandatory electronic B2B invoicing by 2023 to help reduce VAT fraud.
- Albania is moving from a paper-based invoicing system to a real-time e-invoicing system. On July 1, 2021, a company that provides B2B transactions must submit its invoices electronically. As of September 2021, all companies that supply B2C transactions must also comply.
- Slovakia has published legal proposals to introduce an invoice clearance model for B2B.
The tax function and tax digitalization: 'what to do'
KGT SAP add-ons for SAF-T, e-invoicing and MTD UK for VAT work as a standalone application within the SAP system and does not change existing customer SAP functionality or processes. It is fully configurable with custom namespace /KGT.
KGT partnered up with SAP regarding 'SAP Advanced Compliance Reporting for SAP HANA'. The 'Advanced Compliance Reporting' (ACR) service enables you to configure, generate, analyze, and electronically submit statutory reports that contain indirect taxes, such as value-added tax.
KGT provides also S/4 HANA transformation support.