How businesses can prepare for global e-invoicing: Insights from KPMG tax experts
Highlights:
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Electronic invoicing (e-invoicing) is shaking up the world of global tax compliance. Even though its widespread adoption is still in its early stages, it’s already showing huge potential to change how businesses handle their tax responsibilities. While there are challenges with regulatory changes and global implementation, the benefits of smoother processes and improved compliance are undeniable.
To gain a deeper understanding of the future of global e-invoicing and its implications for businesses, we recently interviewed a group of tax experts from KPMG. These industry leaders are at the forefront of integrating e-invoicing compliance at corporations worldwide. Whether you’re a part of a large multinational corporation or a smaller business, their insights will provide invaluable guidance for these rapidly evolving mandates.
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| 1. Can you share any upcoming global regulatory changes in e-invoicing that businesses should prepare for, especially concerning tax compliance? |
| 2. From your experience, what are the biggest hurdles tax teams face when implementing global e-invoicing, and how do these challenges affect multinational corporations? |
| 3. What are some of the main challenges companies face in ensuring their e-invoicing systems work well with others, and how can these be addressed? |
| 4. What should corporations be looking for in e-invoicing software to make sure it integrates well with their ERP system, and what efficiencies have you seen gained? |
| Take advantage of our partnerships and alliances to achieve your e-invoicing goals |
1. Can you share any upcoming global regulatory changes in e-invoicing that businesses should prepare for, especially concerning tax compliance?
KPMG: So, historically, Latin America has been a leader in e-invoicing and digital reporting, with many countries requiring real-time reporting. Companies in this region are familiar with the process, and their digital reports must align with tax filings to avoid discrepancies and electronic audits.
Now, Europe is seeing a second wave of e-invoicing regulations. Many countries are implementing their own rules, which will be unified by 2030 through the VAT in the Digital Age legislation. The European Commission no longer needs to approve mandatory e-invoicing, leading to a surge in new mandates across Europe, including Belgium, France, Germany, Poland, and Denmark.
In the Asia-Pacific (APAC) region, countries are catching up. Malaysia and Taiwan have had e-invoicing regulations for a while, and China has expanded its pilot programme to all taxpayers. Singapore is also rolling out a voluntary e-invoicing mandate.
Most regulations focus on business-to-business (B2B) transactions, with some extending to business-to-consumer (B2C). However, not all countries have government-linked tax portals. For example, in Belgium, invoices are issued directly to customers, and the government can access the information if needed.
The key is to align your e-invoicing process with your tax filings to avoid discrepancies and potential audits. End-to-end process management is important, and strong collaboration between technical and legal teams is highly advised.
2. From your experience, what are the biggest hurdles tax teams face when implementing global e-invoicing, and how do these challenges affect multinational corporations?
KPMG: One of the biggest hurdles is navigating the many stakeholders within a multinational corporation. You need to identify specific needs for each jurisdiction and align them with internal enterprise resource planning (ERP) systems like Oracle and SAP. Then, companies need to figure out who will lead the implementation (tax or IT) and how to integrate external third-party solutions with existing systems. Partnering with service providers like KPMG is crucial to create a holistic, global blueprint.
Another major challenge is figuring out who will pay for it. In a combined taskforce scenario, determining the budget source can be a huge issue. Tax departments are often at risk because e-invoicing affects financial and tax reporting, but they might not be involved in or responsible for the implementation costs.
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3. What are some of the main challenges companies face in ensuring their e-invoicing systems work well with others, and how can these be addressed?
KPMG: One of the biggest challenges is coordinating the project, especially when it comes to leadership and communication between the provider and the IT team. Time zone differences and language barriers can make meetings a nightmare.
In countries like Colombia, real-time approval from tax authorities can take up to 10 minutes, which is a major problem for retail stores where customers are checking out in real-time. In Mexico, value-added tax (VAT) reporting is based on the payment date rather than the invoicing date, causing timing issues and making reconciliation difficult.
To address these challenges, companies need to work closely with invoicing providers to optimise response times and ensure systems align with business realities. Clear communication and strong project management are essential.
4. What should corporations be looking for in e-invoicing software to make sure it integrates well with their ERP system, and what efficiencies have you seen gained?
KPMG: The main thing to consider is how well the e-invoicing software integrates with your ERP. Most providers can develop application programming interface (API) calls, but older ERPs can be a challenge. For example, in a recent Malaysia project, we had trouble extracting specific details for accounts receivable (AR) invoices and credit/ debit memos from an outdated ERP.
The real efficiencies come from an embedded ERP. For example, if it’s already integrated with your ERP, your IT team can handle the integration smoothly. This avoids the need to coordinate with multiple teams across various time zones. It also prevents issues like 1,000 orders worth €100,000 getting stuck due to missing information, which we’ve seen happen in Germany. A well-maintained and modern ERP makes a huge difference.
Working with bigger ERPs is easier, but some clients still use homegrown solutions, which can be very particular or outdated. This makes integration more challenging, especially for smaller companies now required to comply with e-invoicing mandates. These mandates used to only impact big players, but now small taxpayers must comply, often without the budget for big solutions.
Take advantage of our partnerships and alliances to achieve your global e-invoicing goals
Corporations can look to Thomson Reuters and its partners to help them navigate the growing complexity of e-invoicing compliance. We collaborate with KPMG to help solve problems for our shared customers and maintain close partnerships with leading global technology providers. Together, we co-create integrated solutions that offer a unified experience, boosting productivity and accuracy while providing seamless compliance with evolving requirements.
Discover how our ONESOURCE Pagero solution and partnership with Oracle help multinational corporations stay ahead of the regulatory curve. Our solutions provide you with the tools and support you need to navigate the future of global e-invoicing with confidence.
KPMG Independence disclaimer: Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.