Countries have introduced e-invoicing as a clearance model or as a post-audit method. The legal format is usually an XML or JSON file.
Post audit
Hungary and Spain introduced the submission of sales e-invoice data to combat VAT fraud as a post-audit method. The taxpayer will keep sending in the traditional way invoices to its customer, but he must submit to the tax authorities the sales e-invoicing in XML format almost real-time for tax audit purposes. In Hungary, it is within 5 minutes after the invoice is generated, and in Spain, the submission needs to be done within four days.
Clearance model
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 itself.
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. The invoice received by the tax authorities is considered to be the VAT invoice, and VAT can only be deducted based on that invoice.
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 also generate a QR code. The digitally-signed invoice will be processed in the GST Network and e-waybill system within 24 hours. The taxpayer is returned the IRN. The customer is issued with the approved invoice. The invoice will be sent to both the buyer and seller mail IDs provided in the invoice.
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.
E-invoicing in XML or JSON format
XML (Extensible Markup Language) is a text format with a distinguished set of human-readable and machine-readable rules. JSON (JavaScript Object Notation) is alike, but instead, it uses the syntax of the JavaScript programming language.
KGT SAP add-on solution for e-invoicing
KGT SAP add-on for e-invoicing extracts the data from SAP, transforms the data in either the XML or JSON format, and has a cockpit to submit the file to the tax authorities. The cockpit displays responses back from the tax authorities. The SAP add- on solution is capable of receiving, check and verify invoice data sent by the taxpayer with immediate access to accounting data.
E-invoicing methods and overview of new country rollouts
SAP add-on for mandatory e-invoicing
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.
