What is e-invoice?

What is e-invoice?

General

A lot of times business persons use this term in day to day functions. The terms in the economic world are indeed of many kinds. No doubt some terms still sound familiar to some people, including the term e-Invoice. For some people, maybe the term e-Invoice is still very foreign to the ear. But for people who often wrestle in the world of taxation, of course the term e-Invoice is no longer a foreign term in their ear.

Definition of e-invoice?

What is e-invoice? Before discussing thoroughly about e-Invoices, it’s good to first understand the terms of the invoice itself. An invoice is a sales calculation using a later payment calculation. Generally, invoices are made in triplicate order. The first copy is handed over to the buyer, the second copy is kept by the seller, and the third copy is contained in the invoice book.

Types of e-invoices

Ordinary Invoices:  are those invoices used in simple transactions or in sale and purchase transactions. This type of invoice has a simple system and is usually given for transactions in general.

Proforma Invoices: is an invoice given to a buyer for which the buyer has not received the goods as a whole. After the goods have been received as a whole, then the Proforma Invoice will be replaced with a complete invoice or an ordinary invoice.

Consular Invoice: is an an-invoice which is a special invoice used for foreign trade. This type of invoice must be legalized by the representative of the importing country.

Electronic Invoice

After thoroughly analyzing the meaning of invoices, now it is the time to discuss e-Invoices in details. E-Invoice is defined as an invoice created through an application or electronic system. E-Invoice is introduced by the Directorate General of Taxes (DGT). Sometimes, DGT impose a requirement for Taxable Enterprises to avoid misuse of tax reports. The use of e-Invoices also helps in harmonizing the DGT prescribed format.

Misuse that often occurs in making tax returns is:

What is Fictitious Tax Invoice?

Fictitious tax invoices are tax invoices made by entrepreneurs that have not been assigned. Even though the entrepreneur already has a TIN, it does not mean that the entrepreneur has been allowed to issue tax returns.

What is Double Tax Invoice?

Double Tax Invoice is usually created because of negligence from the entrepreneur himself. This negligence can be caused by poor administrative processes.

What is Tax Invoice Not / Late Published?

This type of invoice usually occurs when an entrepreneur deliberately does not issue an invoice in accordance with the specified time.

E-Invoices are made not at random times. E-Invoices are made within the allotted time. In essence, making e-Invoice is the same as when the paper tax invoice was made, namely:

  • At the time of receipt of payment.
  • At the time of payment.

Other times are regulated based on the Minister of Finance Regulation

Paper tax invoices

As explained earlier, the emergence of e-invoices is actually a form of

Advantages of E-invoice:

improvement in the use of paper tax invoices.

E-invoice was chosen because it has many advantages compared to paper tax invoices. These advantages are:

The format has been determined by the DGT.

This predetermined format will make it easier to create e-Invoices, and also make it easier for DGT to correct reports made. These e-invoices help business persons in business transactions.

Electronic signatures make transactions secure

The Government has explained the form of electronic signatures in Government Regulation act. In this regulation, the intended electronic signature is a signature consisting of electronic information that is attached, associated, or related to other electronic information that is used as a verification and authentication tool.

Although it is not mandatory to be printed, if there are parties who need a physical form of e-Invoices, the employer can print the e-Invoices.

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What is e-invoice?
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What is e-invoice?
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What is e-invoice? Before discussing thoroughly about e-Invoices, it's good to first understand the terms of the invoice itself.
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talibilm.pk
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