These businesses are taking the opportunity to start issuing E-Invoices. An E-invoice essentially means an invoice which has been generated from an accounting software. In many other countries outside of Malta, this is considered as the norm and has been so for a number of years already!

E-invoicing is also on top of the EU’s agenda. The European Union envisages that in a few years, handwritten invoices will be obsolete. E-invoicing pose three main advantages; (1) the obvious environmental benefit as less paper would be wasted on printed invoices (2) added accountability which would reduce VAT evasion; (3) and it is easier for customers to keep track of old invoices in electronic format.

An E-invoice does not exempt businesses from their responsibilities. An E-invoice must still meet the minimum criteria as set out the twelfth schedule of the VAT Act. Some basic information which must be included are: –

• Name of tax person issuing the invoice
• Business address
• Business VAT number
• Invoice number
• Date
•  Description of the goods or services sold
• VAT Rates
• Total Amount

Other more specific information is required such as specific wording for businesses applying Reverse Charge mechanism or Margin Scheme to mention just a few.

Furthermore, when a tax person is issuing E-invoices to a customer who is not registered for VAT, which is also referred to as B2C transactions, the business must have an EXO number and such EXO number has to be included in the E-invoice issued to their client.

An EXO number can only be obtained if a warranted auditor audits the accounting system or Electronic Point of Sale being used and it meets certain criteria as established by law. Once the auditor is satisfied that the relevant criteria are met, an application is submitted to the VAT department along with a certificate of conformity from the accounting software or accounting software agent.

At Borg Galea & Associates, we can help you and your business to obtain the required EXO number so that you can start invoicing your clients electronically.