China's e-invoice reform aims to provide taxpayers with 24-hour online services, free issuance, delivery, and verification of e-invoices, eliminating the need for special tax control equipment. This reform plan is expected to be completed nationwide by 2025. The characteristics of e-invoices include simplifying the procedures for obtaining and issuing e- invoices, no special tax control equipment required, automatically assigning unique e-invoice numbers, and managing the invoicing quotas of e-invoices based on taxpayers' tax credit ratings. The plan also provides more convenient ways to issue, deliver, and verify e-invoices, including diversified invoice issuance channels, one-stop e-invoice service platforms, and more widely applicable e-invoice data. This e-Invoice reform is expected to reduce the workload of enterprise finance and accounting staff and improve the efficiency of invoicing. However, enterprises may face challenges in the short term in processing and archiving completely digitized electronic invoices.
Although the e-invoice reform will simplify enterprise invoice management procedures, the tax authorities have enhanced their ability to identify non-compliant tax behaviors through big data technology. With the promotion of the e-invoice plan and the fourth phase of the Golden Tax System, enterprises may face greater tax risks. Therefore, it is recommended that enterprises conduct regular tax health checks and strengthen internal controls to reduce operational risks while establishing their own electronic invoice management system to fully utilize the convenience brought by electronic invoices.
