General Outlook of e-Invoicing in APAC

Through live transaction reporting and e-invoicing systems, tax authorities around the globe are digitizing VAT reporting. New regulations and adoption timelines in the B2G and B2B sectors are accelerating the implementation of e-invoicing requirements in the APAC region as well.? In the past few years, the region has seen the emergence of a few e-invoicing trends. Many of these countries have begun to take steps to regulate the issuance of e-invoices (notably by adhering to the PEPPOL system), and related national standards have been established for a variety of e-invoicing flows for B2B and B2G scenarios. Additionally, e-invoicing is either fully or partially required in some of these countries, and there is a trend toward more countries aiming to gradually implement mandatory e-invoicing or CTC in the upcoming years. Every country is implementing its own model which includes dealing with various platforms, document formats, and technical requirements at the national level.

Let’s take a look at the country specific details of the growing e-invoicing mandates in APAC region.

India

Indian Tax Authority (Goods and Services Tax Council) launched an e-invoicing system within the scope of B2B invoices, export invoices and debit notes on a mandatory basis on October 1, 2020. In India, the tax authority announced 6 phases regarding obligating taxpayers by their turnovers. The last group of the obliged taxpayer list was announced in January 2023 by the government, so now all businesses are obliged to issue and report e-invoices in JSON format to the Invoice Registration Portal(IRP).These e-invoices are signed by the government on the official platform. IRP will not store invoices, taxpayers must archive invoices for 8 years. Additionally, IRP generates QR codes for printed invoices for verification.?

South Korea

In South Korea, electronic tax invoice is named e-Tax and has been mandatory for both B2G and B2B transactions since 2010. While all VAT registered businesses are under the scope, there is a threshold determined by the National Tax Service (NTS). In 2010, the regulation covered registered businesses whose turnover exceeds 300 million KRW ($264,500). With the latest update published by the tax administration, the threshold is reduced to KRW 100 million (about $81,000) as of July 2023. Electronic invoices must be generated in XML format and must be signed before upload to NTS. There are several ways to report e-Invoice to NTS;

- Via the Hometax portal for limited numbers of files

- Via Application Service Provider(ASP) for large amounts of files

- Via the AVRS telephone system in case of limited access of internet

Issued e-invoices are sent to the recipient via email by the supplier. However, to send e-Invoices tax authority’s certified ERP or application service provider (ASP) is required.

Japan?

The Japanese government promotes digitalization and chose Peppol e-invoice as? the best option for standard specification of e-Invoice. After the cooperation between the e-invoice Promotion Association (EIPA) and OpenPeppol, JP PINT (Peppol International) which is based on 3.0? has been accepted as an e-Invoicing? model in Japan. From October 2023, under the new input tax credit system which is named Qualified Invoice based Method, e-invoicing will be implemented nationwide following the JP PINT regulations. Before the implementation, 31 March 2023 is the registration deadline for the companies that are intending to issue e-invoice.

China

Following the normal VAT e-fapiao and the Golden Tax System phase VI, Fully Digitalized e-fapiao is the new type of electronic invoice that has started to be used by the new taxpayers in the selected provinces under the pilot program of e-invoicing in China. The Fully Digitalized e-fapiao has the same legal effect as normal VAT e-fapiao and traditional paper fapiao.The fully digitalized e-fapiao does not need to meet with a specific requirements like PDF or OFD formats. While retaining PDF, OFD and other formats, additionally XML format can be used to facilitate the delivery. The pilot program has been expanding broadly since 2022. As of 31 January 2023, Shanghai, Inner Mongolia, Chongqing, Dalian, Tianjin, Shaanxi, Qingdao, Guangdong, S?chuan, Xiamen, have been included in the expanding pilot program. 2025 is the expected year of? the nationwide implementation of the e-invoicing mandate.?

Philippines

In the Philippines, the e-invoicing system has started as of July 2022 as a pilot programme. According to the list published by The Bureau of Internal Revenue (BIR), identified 100 large taxpayers have to meet their e-invoicing obligations in the first step. During 2023, it is expected that the tax authority will release more list taxpayers and guidelines for the full implementation of e-invoicing/and-receipting. Thus, announced taxpayers will need to enter the official system named Electronic Invoicing/Receipting System (EIS), if an official announcement arrives. The EIS contains three portals:

1. Electronic Invoicing/Receipting System (EIS)– platform for Taxpayers;

2. EIS Certification – platform for Certification of middleware developed by Taxpayer and Issuance of the Permit to Transmit (PTT) required sales data; and

3. EIS for Revenue Officers (ROs)– platform for BIR Revenue Officers (for BIR internal use only).

Taxpayers engaged in exports of goods and/or services, e-commerce and that fall under?

the jurisdiction of the Large Taxpayers Service (LTS) are mandated to use e-invoices. E-invoices should be created with a digital signature and transmitted to tax authority in JSON format. Archiving period is 10 years.?

Australia

The Australian Taxation Office, as the Australian Peppol Authority is responsible for governance and administration of the Peppol network in Australia, as well as encouraging voluntary adoption of e-invoicing in the business and government sectors. In the B2G sector, Australian Government agencies are able to receive Peppol e-invoices by 1 July 2022. Businesses supplying Federal Government agencies are open to choose to send invoices by their preferred channel (ie email or Peppol eInvoice). Even though there is currently no B2B e-invoicing mandate in the country, under the Business e-Invoicing Right (BER) proposal, it is stated that all companies will be able to require their trading partners to send them e-Invoices in the PEPPOL format gradually.? The suggested implementation timeline of B2B e-Invoicing under BER initiative is as follows;

• As of July 1, 2023: All businesses can require their large trading partners to send them e-invoices. Large companies will be obligated to send e-invoices? upon the request of the BER in the PEPPOL format.
• As of July 1, 2024: All businesses can require their medium to large trading partners to send them e-invoices. Medium and large companies will be obligated to send e-invoices upon the request of the BER in the PEPPOL format
• As of July 1, 2025: All businesses will be required to exchange e-invoices. All companies will be obligated to send e-invoices upon the request of the BER? in the PEPPOL format.?

New Zealand

Following Australia's lead, New Zealand is going forward with the adoption of electronic invoicing. As of 31 March 2022, large businesses and Central Government agencies are required to be capable of receiving e-invoices. With this initial step of mandatory implementation of B2G e-invoicing, the New Zealand government intends to save up to $4.4 billion and enforce %90 of B2G? e-invoicing by July 2026. In order to use electronic invoices in the country, businesses must have a certified PEPPOL access point and a New Zealand Business Number (NZBN). The aim of the implementation of electronic invoicing is firstly to support fiscal processes and businesses, then to handle large volumes of invoices to reduce costs, alleviate administrative processing, and combat tax fraud overall.?

Thailand

Thai Revenue Department (TRA) is the relevant authority that regulates e-invoicing system. The e-invoicing system includes debit notes, credit notes, and receipts to be in electronic format from 2017 on a voluntary basis.These invoices should? be issued in XML, PDF format and digitally signed using a certificate which is issued by certification authority and confirmed by the Thai Revenue Department.There are two main ways to prepare electronic tax invoices;

1- E-Tax Invoice & E-Receipt System: All VAT registered entities are within the scope of this method. Sellers and entrepreneurs can issue e-invoices or e-receipts. The format of e-invoices in Thailand is XML, PDF or any other electronic one.The invoices should be digitally signed and buyers must verify the documents of e-invoices and e-receipts. For both XML and PDF they must be digitally signed.?

2- System e-Tax Invoice by Email: VAT registrants, whose income does not exceeds 30 million baht per year are scope of this method. Sellers can issue and send e-invoices via e-mailing. File size should be under 3MB, photography and converted documents are not allowed. Also since 1 July 2018, e-invoice by e-mail should be in PDF/A-3 format and also should have a time stamp.?

Singapore

In Singapore, IMDA is the tax authority which became the first Peppol authority outside the EU in May 2018. In January 2019, IMDA has launched the nationwide e-invoicing network which is renamed as InvoiceNow in September 2020. IMDA has been promoting the use of e-invoicing for B2G and B2B environments. Even though currently e-invoicing is voluntary in Singapore, with the latest announcements the government has announced that it is planned to mandate use of InvoiceNow for B2G transactions with the unclear implementation date. About 55,000 businesses have already adopted InvoiceNow.?

Malaysia

Malaysian Ministry of Finance gave part to implementation of e-invoice in the Pre-Budget Statement 2023. Statement offers reforms aimed at strengthening financially and increasing sustainable socio-economic resilience. The Inland Revenue Board of Malaysia(IRB) took on the planning of the new electronic invoice system. Details are not published yet but expected to be announced within this year. The Malaysian Ministry of Finance following the Italian e-invoice system closely and also adapting Peppol Standards are one of the options.

Vietnam

In Vietnam, there is an example of a clearance model in terms of e-invoicing. In 2020, Vietnamese tax authority General Department of Taxation (GDT) introduced an electronic invoicing system as two phases due to Covid-19 pandemic. Companies have had a transition and adaptation period by July 2022. Vietnamese authorities made the implementation of electronic invoices mandatory from 1 July 2022 for both public and private sectors including? enterprises, economic organizations, business households, and individuals.?

E-invoices should be issued in XML format with digital signature and collected data should be archived during 10 years.

Taxpayers have to register the e-invoice portal of the General Department of Taxation before using electronic invoice. Registration and approval process by authority are required. After this process taxpayers could issue their electronic invoices.

When it comes to the content of an invoice, the text on invoice must be written in Vietnamese language. If using foreign language is necessary, companies should place it below or on the right of Vietnamese language and must be smaller than Vietnamese language.