E-invoicing adoption in Asia has grown quickly in recent years, positioning the region at one of the highest annual growth rates for e-invoicing.
The majority of Asian countries have fully embraced fiscal digitalisation, with the notable exception of South Korea. This momentum is accelerating as it is recognised as an effective VAT control measure.
In recent years, a number of countries have introduced regulations for the issuance of electronic invoices via their own platforms or via PEPPOL. In addition, national standards for B2B and B2G transactions have been implemented.
In addition, Continuous Transaction Control (CTC) models are gaining ground in selected Asian countries.
China
The concept of "e-Fapiao", equivalent to an electronic invoice, was introduced in China in 2015. With the aim of completely phasing out paper-based invoices, China launched the e-Fapiao pilot programme in December 2021.
Initially, the programme was limited in scope, focusing on specific regions and enterprises. However, in the months that followed, its reach was gradually extended. The latest additions include the following cities and provinces: Shanghai, Chongqing, Qingdao, Dalian, Tianjin, Shaanxi, Henan, Jilin, Shenzhen, Ningbo, Fujian and Yunnan.
Singapore
The Singapore government plans to implement B2G e-invoicing through its InvoiceNow platform, although no specific timeline has been set. It is expected that all B2G transactions will eventually be processed through this platform.
InvoiceNow is a voluntary service provided by the government to facilitate the exchange of structured invoices and operates on the open standard network known as Peppol. These invoices are transmitted directly between management systems via PEPPOL, which streamlines the transmission process and payment terms, benefiting both SMEs and larger companies.
Japan
In September 2021, the Japanese government established a digital agency to drive digitisation initiatives. Among its upcoming plans, Japan will introduce a qualified electronic invoicing system in October 2023.
This new qualified invoicing system is expected to streamline the exchange of invoices through the PEPPOL network.Although not mandated by Japanese tax law, the Electronic Invoice Promotion Association (EIPA) has been strongly committed to creating a business-friendly system and promoting the adoption of electronic invoicing.
India
In India, e-invoicing has become mandatory for business-to-business (B2B) transactions. The government has meticulously rolled out this initiative in a phased manner, starting from 1 October 2020 and culminating on 1 April 2021. Under this programme, taxpayers are required to submit their invoice details through the Invoice Reference Portal (IRP).
From 1 August 2023, the e-invoicing requirement will be further extended to taxpayers whose annual turnover exceeds Rs 5 million.
Malaysia
In 2015, Malaysia introduced e-invoicing initially as a voluntary practice, requiring the consent of both parties and imposing a seven-year data retention period. From 2024, it will move to a mandatory system covering B2B, B2C and B2G transactions and applicable to resident taxpayers.
Under the adopted model, known as Continuous Transaction Control (CTC), invoices will undergo initial verification by tax authorities through a government API before being sent to customers. In addition, PEPPOL will serve as an optional method and invoices sent to customers will be required to include QR codes.
South Korea
In 2011, South Korea introduced real-time electronic invoicing in the B2G and B2B sectors, requiring prior approval of invoices by the National Tax Service. Since 2014, businesses with an annual turnover of more than KRW 300 million (about €210,000) have been required to issue electronic VAT invoices. In July 2022, this threshold will be reduced to KRW 200 million (approximately €140,000).
From July 2023, the e-invoicing programme, called e-TAX, will cover a wider range of businesses with an annual reporting threshold of KRW 100 million (approximately €70,000). It's important to note that this system only applies to domestic transactions and does not cover cross-border transactions.
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