In this article we will go into more detail on the following questions questions about electronic invoices:
– What is an electronic invoice?
– What are the benefits of implementing electronic invoices?
– What are the principal laws governing the use of electronic invoices in Spain?
– Which types of electronic invoices are recognized in Spain?
– How can I convert paper invoices into electronic invoices and vice versa?
First of all, we want to point out that there are many synonyms for digital billing: digital invoicing, electronic billing, electronic invoicing, e-billing, e-invoicing, telematic billing, telematic invoicing, etc.
What is an Electronic Invoices or e-Invoices
An electronic invoice (also called an e-invoice or eBill) is the result of a billing method that doesn’t require a paper copy as a backup in order to demonstrate its authenticity. For this reason, an electronic invoice functions as a software-generated file, which compiles the information related to a commercial transaction, its payment and corresponding tax obligations.
Although we know perfectly well what an invoice is, its technical definition is “a document that reflects the delivery of a product or the provision of services, along with the due date and the amount to be paid in consideration.”
All invoices, regardless of the way in which they are sent (whether on paper or in electronic format), must include a series of mandatory fields. Article 6 of Royal Decree number 1496/2003, Spanish law, which regulates the content of an invoice, establishes these fields as:
– Invoice number
– Delivery date
– Sender’s and recipient’s legal name
– Sender’s and recipient’s Tax ID number
– Sender’s and recipient’s legal address
– Transaction description (tax base)
– Tax rate
– Tax amount
– Date of service (if different from the delivery date)
In order to comply with regulations and ensure that an electronic invoice has the same legal validity as a paper invoice, the corresponding electronic document must contain the same mandatory fields as any other invoice, must be signed with an electronic signature based on a recognized certificate and must be sent from one computer to another with the parties’ mutual consent. This combination of factors provides a Telematic Invoice with sufficient reliability so as to indisputably guarantee its integrity and the authenticity of its origin.
Electronic invoices provide an important means of reducing the costs of processing, sending, distributing and maintaining invoices, resulting in a simplification of administrative procedures and a considerable reduction in the amount of time and space consumed, as the invoices are transmitted through telematic means, accomplished by applying technical certification mechanisms (electronic signatures), which guarantee the basic elements required in any invoice (the authenticity of its origin and integrity of its content) and allow them to be maintained in digital format, which affords immediate access to them at any given moment.
Electronic invoices contain all of the information required in a traditional, paper invoice in an encrypted format, including data on the sender and recipient, such as their name and Tax ID number, the date of the invoice, the sender’s legal address, the amount of the invoice and the percentage and amount of VAT, among other information.
Furthermore, the document includes an electronic signature, which is generated using a digital certificate that has been provided to the sender of the invoice by a Tax Agency-approved certificate company. This combination of factors provides a Electronic Invoice with sufficient reliability so as to indisputably guarantee its integrity and the authenticity of its origin.
Electronic invoices encourage organizations to discontinue the use of paper invoices, replacing them with a digital version of an electronically-generated tax document, which has the same legal validity as the traditional version and preserves a faithful record of all commercial transactions. In this way, the entire billing process can be administered electronically. However, it is important to remember that amount of Value Added Tax must be included on every Invoice.