CENTRAL ASIA: E-INVOICE IMPLEMENTATION AND NECESSITY SCOPES
E-bill initiatives such as E-billing and real-time reporting are becoming increasingly common by governments around the world in the name of reducing tax evasion and losses.
E-bill initiatives such as E-billing and real-time reporting are becoming increasingly common by governments around the world in the name of reducing tax evasion and losses. These systems, which are very similar to each other, are quickly and effectively accepted by tax authorities in many parts of the world as a domino effect.
Latin America is one of the best examples of such practices for tax control purposes.
While Latin America allowed paper bills in the first place, it prohibited the use of paper bills by law by mandating VAT legislation and made the use of e-Bills mandatory.
Similar developments are taking place in other parts of the world, especially in Central Asia.
Developments In Central Asia
Kazakhstan has made e-billing mandatory, and now Uzbekistan and Kyrgyzstan are planning to make e-billing mandatory. Both countries have started the process of digitizing bills through pilot projects. Unlike Kyrgyzstan's voluntary project, Uzbekistan obliges businesses in various parts of the country to participate in the project.
Kazakhstan is the first country to adopt e-bill legislation in 2015 and gradually increase its scope of implementation, leading the e-bill trend in Central Asia.
As of January 1, 2019, the practice was made mandatory in Kazakhstan, with a system requiring taxpayers to process their e-bills through the state portal.
Uzbekistan and Kyrgyzstan also plan to transition to a system similar to that in Kazakhstan.
February January October 2018, Uzbekistan successfully completed the pilot project phase covering the period between October 2019 and February 2019, and adopted the regulation which will make the implementation of e – invoice mandatory from 1 January 2020.
January July 2018, a pilot project on electronic VAT invoices was launched in Kyrgyzstan following the changes in e-invoice legislation, which is expected to be completed by 1 January 2020.
Since this pilot project is voluntary, it will not be a necessity for businesses.
The General Directorate of state tax affairs of Kyrgyzstan announced electronic tax notification requirements, including the issue of electronic signature. According to this, taxpayers must have electronic signatures in order to issue an electronic VAT bill. The Kyrgyz government, which aims to finalize plans for the Official Information System before switching to the E-billing system, has been collecting feedback throughout the project.
In the process of digitisation, the value of the tax deficit measures is increasing. For this reason, relevant organisations also need to adapt to the digital tax period.