Spain eInvoicing Process
E-Invoicing has become mandatory in B2G transactions in Spain since 2015. All public institutions are required to receive all invoices, without discrimination, from a single entry point. The name of this common entry point is FACe. In accordance with the law, all invoices sent to public institutions must be submitted electronically, be in a structured format (Facturae V3.2.X) and be signed with an electronic signature based on a qualified certificate. Public administrations receive and process these invoices electronically. However, administrations can also accept printed invoices under certain conditions (for example, if the amount is less than 5 000 Euros).
What is the FACe System?
FACe allows the sending and tracking of E-Invoices sent to thousands of public administrations connected to the system. The General State Administration offers FACe as a free service to all public institutions. The use of FACe is mandatory for central government and optional for regional and local governments. More than 8,000 public administrations use FACe, including 16 of the 17 autonomous communities, more than 8,000 local governments and all public bodies of the General State Administration (updated data are available from the public administration observatory OBSAE).
On September 29, 2022, the Spanish government published Law 18/2022 on Job Creation and Growth (“Crea y Crece”), which includes the necessary measures to support business growth. This law is a measure that opens the door to the implementation of B2B electronic invoice in Spain. Pursuant to the Law, all B2B transactions must be supported exclusively by electronic invoices, and the software solutions used by taxpayers to create, process and verify these invoices must be authorized by the tax administration. The law covers all Spanish VAT payer companies and individuals in creating and receiving electronic invoices. This regulation will be valid from July 2024 for large taxpayers with an annual turnover of over 8 million Euros, and the e-Invoice application will continue until 2026. The threshold will gradually decrease and coverage will expand over time to cover all other taxpayers. By implementing e-invoicing at the sub-center level, operational savings, reduction of administrative burden and optimization of payment time are aimed.
The law imposes certain obligations on both companies that send and receive invoices and providers that provide electronic invoice services. Some of those:
- Businesses are obliged to issue, send and receive electronic invoices in business relations with other entrepreneurs and professionals.
- Sender and receiver will need to provide information about the status of invoices.
- Technology providers will be required to provide free interconnection and interoperability between technology solutions or platforms. The procedure for accreditation of interconnection and interoperability will be determined by regulation.
- Recipients will be required to maintain access to electronic invoices for 4 years. Thus, if the recipients of electronic invoices are no longer customers of the sending companies, access can be allowed for 3 years from the end of the contracts.
- Access, viewing, downloading and printing of electronic invoices will be allowed and facilitated for recipients.
What is FACeB2B System?
The Spanish Ministry of Industry offers free software for creating and managing electronic invoices, which is especially useful for small and medium-sized businesses that process a limited amount of electronic invoices. Additionally, FACEB2B, an additional platform for managing electronic invoices between contractors and subcontractors of public administration, has been available since 2018. This platform is also free and uses the same formats and interfaces as the equivalent government platform. As a result, the use of e-invoices in B2B has been allowed and encouraged for some time, although it is not yet mandatory.
What are the Basic Functions of the FACeB2B System?
FACeB2B offers companies a web services interface that allows integration with the system. This interface offers many functions such as creating, canceling, downloading and monitoring the status of the invoice. The web portal offers two different accesses for the customer and the company providing the billing service. Additionally, the portal will offer an asset search engine based on company number, name and code, similar to the search engine of the DIRe system.
How to Register to FACeB2B and Send Invoice?
If a company wants to use FACeB2B, it must first register in the system. Doing this requires a DIRe code. DIRe code is a code assigned to a company so that it can receive electronic invoices through FACeB2B’s Public Entry Point. For this, the receiving company must register with FACeB2B and register the DIRe code. This code is usually your NIF (NIF is a code required when completing the data of both the issuer and recipient of an invoice, followed by four zeros).
Unlike FACe, one must work with a service provider to benefit from all the advantages FACeB2B offers. The provider must also be registered with DIRe and FACeB2B. In addition, the relevant company must authorize its service provider as ESF (Empresa de Servicios de Facturación-Invoice Service Provider Company) during registration.
Finally, it is possible to export invoices in a specific format only from an ERP system such as SAP or Microsoft Dynamics NAV. This requires a specialist EDI provider.
What are the Required Formats of the e-invoice?
- Facturae format is used for B2G relationships. This is an XML-based national standard (used in conjunction with an eSignature conforming to the XAdES standard).
- The format of B2B e-invoices in Spain must comply with the EN 16931 standard The following will be accepted:
- CII Sector-wide CEFACT/UN Invoice XML messages,
- UBL Invoice and Credit memo messages in accordance with ISO/IEC 19845:2015
- EDIFACT invoice messages compliant with ISO 9735,
- Facturae messages. (Invoicing version between businesses and professionals)
As MELASOFT, we are a company specialized in e-invoicing and electronic data exchange. Over the years, we have helped many businesses streamline their supply chains and improve core processes, while minimizing the workload on your employees. Please contact us to learn more about how we can help you comply with e-invoicing regulations in Spain and for advice on what practical steps you can take towards automation. We will be happy to serve you with our experienced consultants.