From 2020 there will be a new legal framework for electronic invoicing. Published in the Diário da República (Portugal's official gazette) on 15 February, Decree-Law no. 28/2019 aims to harmonise the rules, simplify the law and create the conditions for tax documents to be issued and stored digitally.

Below are the key questions about the new electronic invoicing regime.

The key questions about Electronic Invoicing

• What is an electronic invoice?

According to European Union Directive 2014/55, an electronic invoice is "an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing".

So simply emailing a PDF invoice to a customer does not automatically make it an electronic invoice. For that, the data must be created in the correct structure defined by the European standard, and then sent directly from the seller's system to the buyer's so that it can be imported automatically into the public body's system, with no need for manual entry.

• Who is it mandatory for?

Since the start of 2019, electronic invoicing has been mandatory for all companies covered by public contracts, as well as for public authorities and bodies.

National and European legislation provides for only one exception, concerning "contracts declared secret or accompanied by special security measures".

This obligation is not limited to the Public Administration: it also covers contracts between private parties and the State, or between private parties that are suppliers to the State.

Ultimately, the legislation does have an impact on the private sector, although it is being implemented in phases and according to company size.

It becomes mandatory to use a certified invoicing programme for companies with organised accounts or a turnover above 50,000€.

• From what dates is it mandatory to use a certified programme?

Public Sector:

• 18 April 2019: for bodies of the direct State administration and public institutes;
• 18 April 2020: all other public bodies (public foundations; local government, including parish councils; public associations and other public entities).

Private Sector:

• 17 April 2020: large companies (more than 250 employees; turnover above 50 million euros; balance sheet of 43 million euros);
• 31 December 2020: micro, small and medium-sized enterprises.

• What data must appear on an electronic invoice?

According to Decree-Law no. 111-B/2017 on the Public Contracts Code, these are the elements that must appear on the electronic invoice "whenever applicable":

• Process and invoice identifiers
• Invoicing period
• Details of the co-contractor
• Details of the public contracting party
• Details of the beneficiary entity (if different from the above)
• Details of the contractor's tax representative
• Contract reference
• Delivery terms
• Payment instructions
• Details of adjustments and charges
• Details of the invoice line items
• Invoice totals

• What is not considered an electronic invoice?

Although a visual image or a PDF may be created to make it easier for the user to read, this serves only as a complement to the electronic transmission of the invoicing data, which is the real purpose of electronic invoicing.

According to the Connecting Europe Facility, the following are not considered eInvoicing models:

• Unstructured invoices issued in PDF or Word
• Unstructured invoices in HTML, on a web page or in an email;
• Images of invoices (in .jpg, .tiff or other formats)
• Scanned paper invoices (Optical Character Recognition)
• Paper invoices sent as images by fax
• Any invoice sent electronically to the customer's system that does not follow the standard invoice model approved by the European Commission.

• If there is an inspection, what information stored electronically must I provide?

In the event of an inspection, you must provide the Portuguese Tax Authority (AT) with copies of the relevant storage media and legible paper reproductions of the archived documents, and allow any type of analysis or search of the archive to be carried out. Whenever necessary, the means for reading the media and the images they contain must be made available.

• Is it mandatory to keep copies of the information?

Yes. It is mandatory to have at least two backup copies of the invoicing and accounting information, which must be kept up to date and stored in separate locations, "under the conditions of preservation and security necessary to guarantee that the files cannot be lost."

Need help acquiring invoicing software or ensuring backup copies? Talk to us!

With more than 25 years of experience and as information systems specialists, Openlimits is the right partner to help your company comply with the new legal framework for electronic invoicing.

Talk to us so we can advise your company on the invoicing programme you should use and how to ensure the mandatory backup copies of your information.

Written by:
Openlimits

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