e-Invoicing status worldwide
e-Invoicing status worldwide
Billentis consulting has published a new edition of the annual “E-Invoicing / E-Billing” report describing the state of e-invoicing around the world. As in recent years, in 2017 this technology is again likely to increase, foreseeably by 10% to 20%. In total, the global volume of e-invoices exchanged should reach around 36 billion. Nevertheless, there is still a lot of potential for growth ahead.
Nowadays some 90% of these documents are managed on paper, although according to the Billentis report, this might change in the near future. By 2025, e-invoicing is expected to be the predominant model worldwide. In addition, other tax documents will be added, as is already starting to happen in many countries. This is due, on one hand, to the inexorable digital transformation, but on the other to the cost savings, estimated at 8% to 39% compared to invoicing on paper.
These are the general figures from the Billentis report, but the evolution of this technology is very unequal in the different countries. What is the status of e-invoicing in each area?
e-Invoicing in Latin America
There can be no doubt that Latin America is the most advanced region in the rollout of e-invoicing. There, the system has become a tool to improve fiscal control and mitigate the high rates of evasion.
Chile, Mexico and Brazil were pioneers in the use of e-invoicing. In these countries, use of the system is now widespread and beginning to make headway in other tax compliance policies, such as e-accounting. The aim is to facilitate these tasks for taxpayers and lower economic costs.
Argentina is another frontrunner state. As of 2016, all economic sectors are required to use e-invoicing in their business relations. In Peru, the rate of uptake is also very high, although so far 85% of electronic billers have joined the system voluntarily. In any case, the country plans to roll out compulsory use for all taxpayers in 2018.
On the side of the less developed, we would find Colombia. So far, this model has enjoyed low acceptance. However, the DIAN has launched a gradual adoption project with a new e-invoicing model. By 2019, all Colombian companies must use this system.
e-Invoicing in Europe
In recent years, Europe has seen remarkable growth of e-invoicing, especially in the B2G area. The public sector acts as a driving force when it comes to encouraging the switch to paperless billing.
Denmark was the first country to make use of B2G e-invoicing mandatory back in 2005. Since then, many other countries have followed this example, such as Austria, Finland, Italy, Norway, Slovenia, Spain, Switzerland or France. B2B e-invoicing is also starting to be promoted through tax incentives or with the obligation to submit VAT returns electronically, now increasingly frequent.
At this stage, as noted in the Billentis report, the main problem is atomization. It is estimated that there are more than 40 legislations regarding the use of e-invoicing in Europe, which makes interoperability between different regions difficult. To resolve the issue, at the end of 2018, the European Union will require all public bodies in the Member States to adapt to e-invoicing in a common European standard.
e-Invoicing in North America
In North America, e-invoicing is conceived differently from Europe and Latin America. In this region, the main objective of companies when implementing this technology in the B2B/B2G area is the optimization and automation of work processes.
Billentis currently calculates that two thirds of the companies are sending their invoices in PDF by e-mail. However, only 20% are issuing structured e-invoices by means of EDI. One of the reasons for this low uptake is that the country does not have a VAT system, so the processing performed in these documents is the same as for any other business transaction.
Even so, the Federal Administration proposes to promote this technology, after running a pilot project to discover the advantages it can bring to public and private organizations. In 2018, e-invoicing will have to be used by all public sector bodies.
e-Invoicing in Asia and the Pacific
In these areas, e-invoicing is still in the development phase. The main drivers of change are currently the public sector, retail industry and transport, mainly in states such as Singapore, Hong Kong, Taiwan and South Korea.
Moreover, the high rate of tax evasion has led the Tax Authorities in some countries to take measures and require e-invoicing as a means of control, following the example of Latin America. Among them, China and Indonesia. The latter announced in July 2016 that it would require almost all taxpayers to use e-invoicing in VAT-related transactions.
Russia is also advancing in the spread of this technology. Although it only started to be used recently, development is swift and the e-invoicing volume is expected to be 2 or 3 times higher in 2017 than in 2016
Another country featured this year is Turkey. The e-invoicing adoption system there is gradually adding new sectors and taxpayers. In 2017, another 100,000 taxpayers are scheduled to join the system.
In turn, Australia and New Zealand present a very similar context to Asia. e-Commerce and digital transformation are becoming established among companies in the country, which are beginning to use B2B e-transactions, especially in the healthcare industry. Nevertheless, the majority of invoices are exchanged in paper or PDF and sent via e-mail.
e-Invoicing in Africa
South Africa is the only country in this region that has a fully developed e-invoicing system. In 2012, the country updated the regulatory framework to boost this technology among companies.
In the rest of Africa, the use of e-invoicing is residual, although some countries like Morocco and the Maghreb are starting to show some timid growth in this system.
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