Khaberni - As part of the digital transformation witnessed by the Hashemite Kingdom of Jordan, a system for organizing affairs of invoicing and its control, number 34 for the year 2019, was launched, which paves the way for the application of the national electronic billing system – a comprehensive system for issuing and exchanging invoices electronically.
The instructions were issued, and the system was launched so that it becomes mandatory gradually, and traders and establishments began preparing for "Jordan's electronic tax invoicing."
The question that poses itself is: How does this new system affect traders? What does the issuance of electronic invoices mean for them in terms of changes, and what are the opportunities and risks?
What is the electronic invoicing system?
In short, "electronic invoicing" means the issuance, documenting, delivery, and processing of invoices digitally instead of the traditional paper format. In Jordan, the national electronic billing system is defined as: "A comprehensive central electronic system specialized in issuing and delivering electronic invoices… and linking them with financial collection and payment transactions."
Under this system, the issuance of an electronic invoice ("electronic invoice issuance") is required from establishments obliged according to the law, and phases for its implementation were determined, starting from registration, linkage, and then full enforcement.
Why was this system adopted?
Jordan adopted the electronic invoicing system for several important reasons:
Enhancing transparency in commercial transactions and fighting tax evasion.
Improving operational efficiency and invoicing processes, thereby speeding up procedures and reducing paper errors.
Enhancing tax control and knowing the actual revenues of establishments.
What are the obligations of traders?
The trader or establishment whose activity is subject to this system must do the following:
Register in the national electronic invoicing system through the website of the Income and Sales Tax Department, and prepare for technical linkage with the system.
Issue electronic invoices that comply with the specifications approved in the system (like UBL 2.1 standard and XML format) when selling goods or providing services.
Deal with establishments and suppliers who are also compliant with the system, especially after the phase that demands them to "purchase from those compliant with invoicing" for it to be counted tax-wise.
How does it affect traders? – Opportunities and Risks
Opportunities
It provides them with facilities in the invoicing process: the system facilitates the issuance and management of invoices electronically, reducing time and effort.
It reduces the costs associated with paper invoices, related errors, and improves the merchant's ability to track transactions and retain records.
It enhances the establishment's credibility in front of clients and regulatory bodies, which may help improve commercial relationships.
Risks and Challenges
The merchant needs to arrange the technical matters and accounting systems and connect them to the new system, which may require time and costs.
Some small traders might feel it as an additional burden, especially if they rely on manual invoices or do not have advanced accounting systems.
If the requirements of the system are not complied with, there are risks: for example, not accounting for invoices or unsupported expenses electronically, or imposing fines.
What should traders do?
Ensure they are registered in the national electronic invoicing system immediately if they haven't done so yet, as the deadline has ended or is about to end soon.
Verify that their accounting system or their invoicing program is compatible with the new system, or contract with an electronic billing solutions provider to achieve linkage.
Train their team or the person responsible for invoicing on how to issue electronic invoices according to the required technical standards (XML, UBL, linkage).
Review the supply chain and clients: Make sure to deal with those who are compliant with the system so as not to encounter problems when buying or selling.
Conclusion
Adopting the "electronic invoicing system" or "Jordan's electronic invoicing" is not just a simple technical change, but a fundamental transformation in how invoices and tax transactions are managed in the kingdom.
For traders, this system carries great opportunities to improve efficiency and credibility, but it also imposes on them technical and organizational responsibilities and challenges. It is important for the trader to take the "national invoicing system" seriously, starting with registration, linkage, and ensuring their systems' compatibility. Properly issuing the electronic invoice (electronic invoice issuance) will be key to compliance and success in the modern business environment.
