Canary Islands SMEs Voice Concerns Over New Tax Compliance System

As the deadline of January 2026 draws near, small and medium-sized enterprises (SMEs) in the Canary Islands are expressing growing unease regarding the upcoming implementation of a new invoicing system mandated by the Spanish Tax Agency. This initiative, aimed at modernizing tax compliance, has sparked a wave of questions and concerns among local business owners.

Understanding the Verifactu System

The new invoicing system, referred to as Verifactu, is set to revolutionize the way electronic invoices are managed and submitted to tax authorities. Designed with advanced features, Verifactu will enhance the traceability of invoices, ensuring that every transaction is accurately recorded and easily accessible for auditing purposes. The system will include automatic reconciliation of payments and receipts, advanced search capabilities, and robust auditing functions to facilitate seamless invoice tracking.

One of the standout features of Verifactu is its ability to automatically validate invoice formats and required data, which aims to simplify compliance with existing tax regulations. This move is part of a broader effort by the Spanish government to digitize tax processes and reduce the potential for errors in invoicing.

Challenges Faced by Local Enterprises

Technology firms, such as HolaSoft, based in Tenerife, are already working to integrate Verifactu into their software solutions. With over a decade of experience in enhancing business management for local enterprises, HolaSoft’s CEO, Joel Cabrera, has noted that the regulation, which received approval in July 2021, is designed to prevent any modifications to invoices once they have been issued. This aspect of the regulation has raised concerns among many SMEs, particularly those who still rely on traditional invoicing methods, such as paper or Excel spreadsheets.

Both SMEs and self-employed individuals will be required to adopt Verifactu, although self-employed individuals will have an additional six months to comply. Cabrera has reported that many of his clients are feeling significant anxiety about the transition, especially those who are accustomed to more conventional invoicing practices. The new verification system will be crucial for any business that utilizes electronic means to issue invoices, including cash registers and scales, which are commonly used in various retail sectors.

Clarifying Misconceptions and Providing Reassurance

Among the most common concerns voiced by business owners are questions regarding potential errors in invoicing and whether they will have the ability to modify invoices after they have been issued. In response to these worries, Cabrera has reassured clients that the system does allow for annulments, thus providing a level of flexibility that many entrepreneurs may not have anticipated. He emphasized that the transition to digital invoicing presents a significant opportunity for growth and digital transformation among businesses in the Canary Islands.

Notably, the adoption rates for digital invoicing among SMEs in the region have surged, increasing from 22% in 2021 to an impressive 46% in 2024. This shift is indicative of a broader trend towards modernization in business practices. To further support this transition, the government has previously introduced a digital kit that offers subsidies of €3,000 for invoicing software and essential computer equipment, making it easier for businesses to adapt.

Implementation Approaches and Industry Readiness

Verifactu offers two distinct methods for implementation, and HolaSoft has opted for a strategy that involves sending invoice information directly to tax authorities at the moment of issuance. This approach allows printed tickets to feature a QR code that contains all relevant details, streamlining the invoicing process. However, there are concerns that many consulting firms have not adequately informed their clients about the necessity of adapting to these new regulations.

HolaSoft asserts that Verifactu will be applicable to both physical and online businesses across various sectors, including hospitality, distribution, service centers, and self-employed individuals. Essentially, any business that issues invoices, regardless of its size or operational model, will be impacted by this new requirement. The comprehensive nature of Verifactu underscores the importance of preparation and awareness among local businesses as they navigate this significant change.

Key points

• Canary Islands SMEs must adopt Verifactu by January 2026 for electronic invoicing compliance.
• Verifactu will enhance invoice traceability and simplify compliance with tax regulations.
• HolaSoft is integrating the tool into its software to assist local businesses in the transition.
• Concerns exist among entrepreneurs regarding the shift from traditional invoicing methods to digital systems.
• The system allows for invoice annulments, addressing common fears about potential errors in invoicing.
• Adoption rates for digital invoicing among SMEs in the Canary Islands have increased significantly, reflecting a trend towards modernization.
• Verifactu applies to all businesses issuing invoices, regardless of their operational model, highlighting the need for widespread readiness.