Digital transformation in businesses is advancing by leaps and bounds, and 2025 is proving to be a crucial year for adapting to the new challenges that are emerging.
Among the most notable is the Electronic Invoicing Act, which is causing some uncertainty amongst businesses. Until now, the requirement to use electronic invoicing only applied to public bodies, but under Law 18/2022, it has been extended to include businesses and professionals as well.
In this article, we explain what you need to know and how to adapt to electronic invoicing in 2025 correctly.
What is the ‘Create and Grow’ Act?
The new electronic invoicing law, also known as the ‘Create and Grow’ Act, forms part of the Recovery, Transformation and Resilience Plan (Next Generation EU). It came into force in 2022 following the adoption of Royal Decree-Law 18/2022, with the aim of boosting entrepreneurship and digitalisation, thereby fostering the growth of the business sector in Spain.
The law has now been passed and many companies are making progress with digitalisation, but we are still awaiting the final regulatory framework for the Crea y Crece Act.
The main objectives and measures to be implemented under the electronic invoicing law in Spain are:
| Objective | Measure |
|---|---|
| Encouraging the creation of businesses | Incorporation of Limited Liability Companies with a share capital of one euro (€1). |
| Reducing late payments by businesses | Mandatory use of electronic invoicing. |
| Removing barriers to economic development |
|
| Improving access to finance | Exploring alternative sources of funding to bank finance: crowdfunding, collective investment or venture capital. |
Of all the measures mentioned, the one that will have the greatest impact on the development of business activity is the electronic invoicing.
Many companies are wondering when this obligation will come into force and, to make it easier for them to adapt, the Act itself sets out the deadlines for doing so:
- Companies with an annual turnover of more than 8 million euros: They will have 12 months from the publication of the implementing regulations to introduce electronic invoicing.
- Companies and self-employed individuals with a turnover of 8 million euros or less: They will have 24 months from that same date to adapt.
There will be no exceptions to the requirement to issue paper invoices. From that point onwards, everything will be done digitally. To comply with this requirement, it is essential to use an electronic invoicing programme that complies with the regulations.
Although most tools are currently paid-for, the Government is working on a public solution to make them more accessible to the self-employed and small businesses.
Objectives of the Crea y Crece Act
In the table above, we have already set out the main objectives covered by the ‘Crea y Crece’ Act, but it is essential to examine them in greater detail in order to understand the purpose of this new measure.
- Encouraging business start-ups: Being able to set up a limited liability company for just 1 euro makes it easier to establish new businesses by removing that financial barrier to entry. Furthermore, it helps to prevent the loss of entrepreneurial activity to other countries by offering more flexible and competitive requirements within Spain.
- Reducing late payments by businesses: The requirement for electronic invoicing speeds up payments and makes the process much more transparent, thereby reducing late payments. It also helps to reduce delays, which tend to affect SMEs in particular.
- Removing barriers to economic development: One of the aims of this law is to reduce the barriers to starting a business in Spain. To this end, the aim is to cut red tape and amend certain laws, with a view to facilitating entrepreneurship and ensuring a more streamlined and standardised approach across the country.
- Improving access to finance: The aim is to reduce businesses’ reliance on traditional bank financing by promoting alternatives such as crowdfunding, collective investment and venture capital. These options, which are in line with European regulations, are much more accessible and are better suited to the specific needs of each project.
Is the turnover Is electronic filing compulsory for the self-employed?
Law 18/2022 of 28 September introduces a requirement to use electronic invoicing for commercial transactions, which affects both businesses and self-employed professionals. This measure is one of the key changes to invoicing for self-employed people, and aims to improve control, traceability and efficiency in invoicing processes. Although the relevant regulations are yet to be finalised, electronic invoicing is expected to come into force in the coming months, marking an important step towards the digitalisation of the business sector.
How does this affect SMEs?
At present, it is still difficult to assess how this measure will affect small and medium-sized enterprises. Most will need to have an electronic invoicing tool in place to issue and receive invoices, as well as train their staff in the use of these solutions.
However, the change goes beyond simply making electronic invoicing compulsory: both businesses and professionals will be required to generate an electronic invoicing code for each document issued, to ensure its validity and traceability within the system.
In this context, technology-based SMEs have a significant advantage, as many of them have their own invoicing solutions. However, for many others, this will require additional effort, involving investment in technology and training.
Solutions that can help SMEs through this transition
Among the solutions that can help SMEs are:
- Electronic invoicing software compliant with the new regulations.
- ERP system with an invoicing module.
- Cloud-based tools.
- Digital training for teams.
- Specialist technology and digital consultancy.
- Grants and digitalisation programmes for SMEs.
The benefits of electronic invoicing
The benefits of electronic invoicing include:
- Reduction in costs and administrative time.
- Greater control and traceability.
- Improvements in payment times.
- Promoting digitalisation.
- It makes it easier to access funding.
To summarise, the main purpose of this Act is to improving the business climate, fostering business creation and growth. Spain is a country moving towards digitalisation, and this is yet another step towards achieving digital transformation in business.
