Government should avoid e-invoicing mandate, says KPMG

Businesses must be allowed to adopt e-invoicing at their own pace and the government should postpone mandating the technology until it has matured, KPMG said.

If the switch to electronic invoicing became mandatory, then “a minimum of five years” was needed to successfully implement the system, the company said in a submission to the Treasury consultation on the matter.

He said events of the past two years had slowed progress and even the conversion to e-invoicing needed time.

“While many large companies, such as KPMG, are already working on implementing e-invoicing, many have not started the often long and costly journey, particularly due to the COVID-19 pandemic. 19″, says the document.

“The Commonwealth Government itself, as one of the pioneers in this space that we applaud, has yet to fully implement e-invoicing and share valuable lessons learned.”

KPMG said wider consultation with Australia’s international peers was needed before the technology was widely adopted and that the government should work in partnership with businesses to share lessons learned and “build standards and interoperable national systems”.

Company partner David Sofra said that any decision to invoke a right to business e-invoicing (BER) – in which one company cannot refuse another’s request to use e-invoices – was unnecessary and was not an effective means of encouraging adoption of the system.

“BER’s approach appears to be that a company cannot refuse another company’s request to use e-invoices, provided the company is covered by the mandatory phase-in period, is listed in an e-invoicing register and not otherwise exempt. In KPMG’s view, this approach appears administratively cumbersome,” said Sofra.

“KPMG considers that the introduction of the BCR concept is contrary to the objective of reducing the administrative burden for all companies and could potentially have negative effects; increase in payment terms for small suppliers if the recipient company disputes the CDR.

“While KPMG strongly supports the initiative to increase the adoption of electronic invoicing, in our opinion the document did not clearly explain why a BER would be the best option or, in fact, necessary.

Mr Sofra urged the government to continue working with the OECD to align the standards and also assess the results of a European Commission review.

The government should engage with international peers to learn more about their experience before implementing any mandatory adoption of e-invoicing. KPMG notes that the European Commission has recently launched its own stakeholder consultation on electronic invoicingsaid Mr. Sofra.

“At the national level, the government should review its own processes and act on lessons learned regarding e-invoicing and related systems before imposing complex obligations on businesses.”

Mr. Sofra said it would be important to consider how e-invoicing would apply to businesses of different sizes, entities and departments.

He warned that it might be impossible to standardize e-invoicing processes due to conflicting standards across professions, and exemptions would be needed for different types of entities, as well as the number and nature of invoices issued.

The government also needed to consider how to align e-invoicing with future tax compliance.

Government should avoid e-invoicing mandate, says KPMG

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Last update: March 28, 2022

Posted: March 28, 2022

Philip King

Philip King

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, information and educational content for professionals in the accountancy and SMSF industries.

Philip joined the titles in March 2022 and brings extensive experience from various roles at The Australian national broadsheet daily, most recently as Automotive Editor. His background also includes spells in various consumer and trade magazines.

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