Session of the Working Group for the Deployment of Electronic Invoicing in Spain

Some weeks ago, I had the pleasure of participating as an expert in the 2nd Session of the Working Group for the Deployment of Electronic Invoicing led by the Secretary of State for Economy and Business Support, which is part of the General Directorate of Economic Policy of the Ministry of Economic Affairs and Digital Transformation.

The working group is made up of various administration bodies, including the Ministry of Finance and Public Administration, the Tax Agency and Social Security, among others.

First of all, I must thank the Working Group for trusting B2Brouter to be the first expert invited. The daily work of the entire B2Brouter team is rewarded by events like this, which shows the dimension of an international project with great knowledge of the market and best practices.

This second session studied, among other topics, the interoperability among different electronic invoicing systems, which was the subject of my presentation in two parts.

In the first part I tried to expose the state of the art of electronic invoicing in terms of platforms for the exchange of electronic invoices that exist today in Spain, including the old EDI networks, e-procurement portals and those other issuing solutions that are sold by entities as different as the ERP manufacturers themselves or some banks.

I commented on the different sectors where electronic invoicing is used intensively and the different transmission methods, as well as those public and private entities that have their own e-invoicing portals.

After painting the starting scenario, we enter in the main subject with the Report with recommendations to the Commission on fair and simple taxation supporting the recovery strategy, issued by the Committee on Economic and Monetary Affairs of the European Parliament (10/2/2022) that requests that "Set-up a harmonised common standard for e-invoicing across the Union without delay and by 2022 to reduce the cost of the creation of fragmented, different system across the Member States” and “Explore the possibility of a gradual introduction of obligatory e-invoicing across the Union by 2023, focusing on a significant reduction of costs of compliance, especially for SMEs”.

This scenario is not possible if portals and e-invoicing services are maintained without interoperability with others, which also force companies to hire the services of certain providers to send invoices (The issuance is mandatory due to the Spanish tax legislation and Billing Regulation, both derived from the Directive 2006/112/CE and its amendments). It is also not possible if these companies that impose mandatory e-invoicing, also threaten their suppliers with stopping contracting them if, at the same time, the suppliers do not contract the e-invoicing services with a specific e-invoicing service provider.

I gave documented examples of how certain public entities, especially in the healthcare environment, have collaborated, intentionally or not, in the growth of certain market operators, creating situations of competitive advantage over third parties, and how certain operators have agreements between them to avoid competition.

We also saw that companies and public organizations have their own portals without any possibility of automated interaction with third parties that force suppliers to manually mechanize invoices, including some public entities and companies that flagrantly fail to comply with the Spanish Resolution of October 10, 2014 of the Ministry of State of Public Administrations and the Secretary of State for Budgets that makes mandatory a common web service for receiving e-invoices.

Can anyone guess how a “significant reduction of costs of compliance, especially for SMEs” is going to happened in a “fragmented system” like this? I believe there is only a single solution: To eliminate the fragmentation and to cease to turn a blind eye when certain companies come in what could allegedly be infringement of competition law, typified in article 1 of Spanish 15/2007, on the Defense of Competition Law.

That is why, the first part of my speech ended with a big thanks to the writing team of the Draft Law on the Creation and Growth of Companies that collected the allegations on interoperability presented by the "Working Group on Interoperability in Electronic Invoicing”, made up of the National Association of Internet Companies (ANEI), Docuten Tech, Easyap, Esker Ibérica, Firma, Proyectos y Formación (Firmae), Invinet Sistemes (B2Brouter), Nalanda Global, Petita i Mitjana Empresa de Catalunya (PIMEC), Spairal Commerce, Validated Id and ZeroComa, and supported by the Register of Economy and Digital Transformation (ReDigital) of the General Council of Economists, which have given rise to the future drafting of article 2 bis 2 of the Law 56/2007 on Measures to Promote the Information Society: “The technological solutions and platforms offered by companies that provide electronic invoicing services to companies and autho- gnomes must guarantee their free interconnection and interoperability”

The second part of the intervention tried to transfer a holistic version of the electronic invoicing, in an environment where sooner than later it will converge in syntax and networks with the rest of the documents of the supply chain.

This reflection arises from the very nature of security guarantees (authenticity of origin and integrity of content) which, forced by the introduction of the "technologically neutral" principle, introduced by DIRECTIVE 2014/55/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on electronic invoicing in public procurement, bases these guarantees not on the electronic signature or EDI, but on "business controls which create a reliable audit trail between an invoice and a supply of goods or services” as indicated in Council Directive 2010/45/EU of 13?July 2010 amending Directive 2006/112/EC on the common system of value added tax as regards the rules on Invoicing

In the absence of a definition of what a "reliable audit trail" is, the Spanish General Directorate of Taxes, in response to the binding consultation V 0861 - 14, of March 28, 2014, established that "the invoice is considered a document that forms part of the management and accounting processes and it is not an independent document” and that “it is important to remember that invoices, whether in paper or electronic format, constitute, as a general rule, a single document within a series of documents (eg purchase order, contract, transport document, payment requirement, etc.), all of them related to an operation which they document.”

It is therefore justified that electronic invoice should not be legislated as an independent document, so, we should reflect on why the different governments have not deepened the promotion of the "use of electronic means in all phases of the contracting processes" that was repeatedly cited by the Spanish Law 56/2007, of December 28, on Measures to Promote the Information Society, and especially asking us if this crucial moment is going to be missed once again and Spain is going to lose the chance of convergence with Europe.

It should be noted here that, from the Spanish public administration, and more specifically from the General Directorate of State Heritage, this global vision was not only held, but also, with a vision of leadership that never was sufficiently recognized, it was carried out in 2008 through the CODICE project (Interoperable Components and Documents for Electronic Procurement) in which some members of what is now B2Brouter participated. An architecture of standard components and electronic documents for the development of applications for Spanish electronic public procurement in accordance with the procedures and requirements of Directives 2014/23/EU; 2014/24/EU; 2014/25/EU; 2009/81/CE starting point for the tasks of the CEN/ISSS Business Interoperability Interfaces for Public eprocurement in Europe Workshop (CEN/BII 1) and seed of version 2.1 of UBL, which Oasis finally published in 2013, including the invoice format.

Nowadays, seen in hindsight, and seeing that the Commission Implementing Decision (EU) 2017/1870 of 16 October 2017 on the publication of the reference of the European standard on electronic invoicing and the list of its syntaxes pursuant to Directive 2014/55/EU of the European Parliament and of the Council, requires the acceptance of UBL invoices by all the public bodies of EU member, it would be easy to say that the adoption of our current XML Facturae was not the right decision, but it would be unfair with the great boost that the Facturae format gave in 2015 for the dematerialization of electronic invoicing in Spain.

This does not mean that the European Commission is not looking at "some countries, where governments have established centralized hubs for the public sector to receive eInvoices based on specific formats" and reminds them that in those cases "Migration plans for the roll-out of the eDelivery will be necessary.” In its document Interoperability in end-to-end eProcurement of February, 2020, and more specifically in Annex 1 - Lessons learned from eInvoicing.

It is the same document in which the commission reminds the member states of the importance of PEPPOL (Pan European Public Procurement On-Line), a long term project that the Commission promoted and financed with several million euros. Peppol has bring the largest existing interoperability network in the world, fully compliant with EU standards, which reaches places as far away as Japan or Australia and is a reference for the BPC and the FED in their current e-invoicing pilot in the United States. A network, to which more than half a million companies have already joined, including freelancers from a lot of countries around the world and all the EU countries, except one, which unfortunately is ours, Spain.

It is what I call the "Spanish track gauge about electronic invoicing" remembering the Iberian train track gauge that made impossible for Spaniards and Portuguese to connect by train with Europe beyond the Pyrenees, and that Spain finally had to change to connect with Europe by train but still leaves deep traces that are well known by users of the railway from Madrid to Pamplona who have to make a specific stop to change the track gauge.

Is this what we want for Spain regarding e-invoicing? Do we want a permanent surcharge for all our exporting companies? Would this be a new “Iberian exception” to add to the railway or energy exceptions that our Prime Minister recently spoke about? I want to apologize to the people in Balearic and Canary Islands, especially to my own relatives, but the islands served some time ago to banish someone, like Napoleon or Unamuno.

(Miguel de Unamuno was an illustrious Spanish writer who was rector of the University of Salamanca. He was relieved of his post by the government of the Second Republic and when Franco's troops reached Salamanca, he was given the post of rector again. Franco was not aware that Unamuno did not support a civil war and when he knew it, he removed to Unamuno from his post again and sent him into exile to Fuerteventura Island).

But nowadays we make as effort as we can to connect them for having them as closer as possible, for example, with the discount for residents on plane or boat travels. Which is the connection model that we are looking for e-invoicing, the interoperable model or the banish model?

Entities such as the British National Health Service (NHS) have already taken the step of eliminating EDI and joining Peppol by unifying electronic invoices and the rest of the supply chain documents in an interoperable model. Other countries such as Italy, which also created their own electronic invoice model (FatturaPA) before the publication of regarding directives ?are aware of the change and have already begun to implement in Peppol the purchase orders of the Public Administrations as a way of converging, or at least not to diverge from the European standard.

In Spain, the health services chose obsolete standards from the 20th century (1996) that they had to mix with XML Facturae to maintain a supply chain that only benefited a few. It happened due to the lack of leadership from the central administration. A legacy that no rookie CIO would choose, especially because neither to him, nor the 20 previous promotions, are no longer taught it in college

And let us not forget that no matter how hard we try to be an island, Europe continues to move forward like a bull in a china shop and the obligatory implementation of eForms (Tender Announcements by Public Administrations) is also being carried out in many countries with the same syntax.

In conclusion of the above, I explained that we must converge with Europe, and not because I say so, but because the "Plan Espa?a Digital 2025" itself says that "over the next five years, the aim is to promote the process of digital transformation of the country, in line with the digital strategy of the European Union” and leave the “Spanish track gauge for electronic invoicing”. That when it comes to e-documents, e-invoice is not alone and the strategy must be joint and consistent with the rest of the documents in the supply chain. That we should also converge on tax reporting or the so-called CTC. That not doing so implies extra costs for Spanish exporting companies that worsen their competitiveness, so, in my opinion, Spain should address:

- The integration of FACE and FACeB2B with Peppol

- The integration of the ORDERS of the General Directorate of Heritage and all the documents of the supply chain with Peppol, avoiding obsolescence such as those of the health services.

- The implementation of the new e-procurement processes, from bidding to payment, with Peppol

Finally, I quoted Ortega y Gasset, an important Spanish philosopher who died in the mid-20th century, when he said that "Spain is the problem, Europe is the solution" and that "Europeanization means the creation of a 'Spanish interpretation' of the world, an interpretation that will not be possible without overcoming Spain's backwardness, using for this the tools that Europe gives us”.

I don't know if now, when in Spain we are going to stop studying philosophy in schools by government decision, this is a good thing to bring up, or if it is precisely because we no longer studied it, that these perspectivism theories do not make us reflect enough, but in any case, it was now or never when they had to be put on the table to converge with Europe and make our companies more profitable by removing obstacles in the world of electronic invoicing.