Compliance Services

Malaysia has permitted e-invoicing since 2015 but it is not widely used. According to the 2023 Budget, the Ministry of Finance intends to adopt nationwide e-invoicing to boost revenues and reduce unreported transactions.   

The Inland Revenue Board (LHDN) recently announced plans to implement e-invoicing in phases, starting in early 2024. LHDN’s chief executive officer, Datuk Dr Mohd Nizom Sairi, stated that the e-invoicing platform will allow taxpayers to upload and store their purchase records online with LHDN. As a result, receipts no longer need to be kept on paper since they are already available electronically.  

Malaysia is one of Tungsten’s key compliant territories. We are observing e-invoicing developments in the country to see how we can best serve our Malaysian customers in the future 

ZATCA has published the criteria for taxpayers who fall in the scope of wave 3 of the e-invoicing integration phase.  

Taxpayers with total revenue (only revenue from transactions subject to VAT) exceeding 250 Million Saudi Riyals in 2021 and/or 2022 will fall within the scope of the Integration Phase from 1 October 2023.  

Taxpayers who meet the criteria are advised to integrate their e-invoicing software with the FATOORA platform before 1 October 2023. 

Detailed information on e-invoicing integration in Saudi Arabia can be found here. 

As part of the tax reform proposal for 2023, taxpayers will be able to issue self-billing VAT invoices from 1 July 2023.  

Self-billing of invoices will be incorporated into article 71-2 of the South Korean VAT law. The article imposes that buyers can issue invoices for goods and services if the supplier cannot issue an invoice. In this case, the buyer can deduct the input VAT. In the case of supplies of goods or services that are exempt from VAT, self-billing of invoices will not be permitted. 

The Egyptian Tax Authority has published a list of taxpayers (4th group) that will be responsible for the new released rule. The decision is planned to take effect as from 15 April 2023.  

More official information can be found here (available in Arabic only): https://www.eta.gov.eg/ar/news/mnzwmt-alaysal-alalktrwny-15 

The Polish government has published new draft regulations relating to the National e-Invoicing System, also referred to as the Krajowy System e-Faktur (KSeF). 

The draft regulations represent both a confirmation of the elements contained in the draft legislation published in December 2022, as well as some additional announcements.  

The March 2023 draft legislation confirms the following (while being cognizant that these proposals are still in draft only): 

• Obligatory KSeF obligations will commence from 1 July 2024 
• B2C customers are excluded from KSeF obligations  
• The legislation cites the possibility to issue e-invoices outside KSeF in cases where the taxpayer is unable to issue them in KSeF for any reason other than system failure, with the obligation to send them to KSeF no later than the next business day 
• Transactions exempt from VAT, simplified invoices and invoices issued through cash registers will see their e-invoicing obligations via KSeF commence from 1 January 2025 
• The extension of the ‘validity’ of the exchange rate on invoices issued in foreign currency has been discussed – impacted invoices should be sent to KSeF no later than the day after the date of issue 
• The elimination of correction notes and correction invoice proposals has also been proposed in the draft legislation  
• Sanctions will take effect from 1 January 2025 
• A requirement to retain either the KSeF number or the collective identifier on the bank transfer for payments for invoices issued in KSeF is also included 
• Clarification of the scope of the obligation of additional marking of structured invoices in case of their use outside KSeF, the event of KSeF failure, etc has also been provided 
• Clarification has been provided that where a foreign taxpayer has a permanent place of business in Poland, but does not participate in the supply of goods / services for which the invoice was issued – these taxpayers are not obligated to issue invoices via KSeF 
• Clarification that KSeF will also be used to accept structured invoices during the period of KSeF failure, system unavailability or inability to issue an invoice on the part of the taxpayer, is also included within the draft legislation.  

The link to the draft legislation can be accessed here. 

We are expecting a final version of the legislation in the summer of 2023. Tungsten will analyse these once available and consider the effect these will have on our e-invoicing solution.  

The Mexican Tax Authorities have published a revised list of foreign providers of digital services on 13 March 2023. This includes foreign providers who are registered for tax purposes in Mexico as of 28 February 2022. 5 new entities were added to the existing list. 

The original timeline communicated by the Mexican Tax Authorities, the Servicio de Administracion Tributaria (SAT) was that CFDI 4.0, and associated documents, would become mandatory from 1 January 2023, with a transition period in effect until 31 December 2022 when taxpayers could elect to use either CFDI 3.3 or CFDI 4.0, as required.  

The SAT revised these timeframes in November 2022, indicating that the mandatory usage of CFDI 4.0 and associated documents would now come into effect from 1 April 2023, meaning that from 1 April 2023, Mexican suppliers must invoice via CFDI 4.0, as well as version 2.0 of the withholding and payment information in respect of the CFDI.  The usage of these documents continues to be optional up until 31 March 2023. Alternatively, up to this date, it is possible to also invoice using CFDI 3.3.  

CFDI 3.3 will not be a compliant invoice format from 1 April 2023 and will be rejected if used from this date onwards.  

Tungsten has been supporting the portal solution in Mexico since June 2022 and have been inviting Integrated Solution suppliers to be mapped for the new version of the CFDI 4.0. Our e-invoicing solution in Mexico today is compliant with all timeframes cited above.  

Finland’s support of e-invoicing has been somewhat muted in comparison to other countries. However, the tenor is changing in the country- undoubtedly sparked by the VAT in the Digital Age (ViDA) proposal.  

Finland has written to the EU Parliament outlining its support for e-invoicing and more broadly, the objectives of the proposal. It still has some concerns, around support for small and medium enterprises (SMEs) but the overall tone struck is one of support.  

Politically, in many respects, the Basque Territory perceives itself as distinct from mainland Spain. This perceived division extends further in the implementation of the e-reporting and e-invoicing mandates both countries are either implementing or proposing to implement.  

The Basque Territory introduced a new mandate whereby taxpayers in the country are required to undertake real-time reporting within a framework referred to as Ticket BAI. The Basque Territory is a distinct mandate to that which we are expecting in Spain in the course of 2024.  

The Basque e-reporting mandate operates via phased implementation, commencing in 2022 with suppliers based in Alava, and attention now moves to the Gipuzkoa region in the Basque territory.  

E-reporting for the region Gizpuzkoa will become mandatory in June 2023.  

Tungsten will not be supporting the Basque mandate in Spain and consequently, will no longer be creating the legal tax artefact for suppliers based in Alava. Tungsten will create a PDF image for suppliers which can be delivered to buyers and the PDF will clearly express that it is not the legal artefact. We will implement a similar solution for suppliers based in Gizpuzkoa.  

We expect a flurry of activity as EU Member States digest and consider the impact of the VAT in the Digital Age (ViDA) proposal on their own e-invoicing and e-reporting practices.  

On 3 March 2023, the Slovenian Parliament agreed to consider Bill No. 54921-12/2023/1, which seeks Slovenia’s support for proposed amendments to the EU VAT Directive 2006/112/EC. These amendments aim to combat VAT fraud and modernize tax regulations for the digital age, which is strongly indicative that Slovenia’s response the proposal is a predominantly positive one.