What is TicketBAI & BATUZ

If your company conducts operations in the Spanish autonomous community of the Basque Country, you must be aware of an important development in administrative regulation: TicketBAI (and BATUZ in Bizkaia).

What is BATUZ

The strategy for controlling the taxation of businesses and self-employed individuals, regardless of their size, by the Provincial Council of Bizkaia is called BATUZ.

For now, we will focus a bit more on the situation in the Historical Territory of Bizkaia, as it is the province where a large majority of our clients are located, and it is also where IGN operates from. In any case, TicketBAI will operate in a similar manner in Gipuzkoa and Álava, as we will see later on.

Returning to the strategy in Bizkaia, although it is often referred to exclusively as TicketBAI, BATUZ consists of three components:

The billing assurance software TicketBAI. An invoicing computer system that ensures the declaration of all sales transactions.
The Book of Economic Operations Register (LROE). These are the forms used to declare the income, expenses, and invoices of anyone engaged in economic activities. Model 140 is for individuals, and Model 240 is for legal entities.
Drafts of VAT, Corporations, and Income Tax. Using information from Models 140 and 240, the Bizkaia Provincial Treasury prepares draft VAT, Corporations, and Income Tax declarations for individuals and legal entities engaged in economic activities.

What is TicketBAI

As introduced in the previous section, TicketBAI is a new system for controlling the income of businesses and self-employed individuals in the Basque Autonomous Community, regardless of their size or revenue.

All affected individuals or organizations engaged in economic activities are required to issue an invoice or receipt to report their income to the Treasury of their Basque Historical Territory.

This implies that companies and self-employed individuals in each Basque province must update their systems to implement software that complies with TicketBAI requirements. Computing is the only way to issue invoices as stipulated by the regulations.

Starting from 2022, all taxpayers must be correctly certified to issue their receipts and invoices, which must carry a TBAI code for the Administration to identify and validate them.

The solution is part of what is known as the Joint Plan to Combat Tax Fraud in the Basque Country, which is being gradually implemented in the three Basque provinces.

This plan to combat fraud aims to prevent tax evasion through a system that enhances tax collection, making it more difficult to evade obligations.

On the other hand, there is also a desire to monitor economic activity. Hence, it is necessary to control all the income of self-employed individuals and businesses of all sizes. Therefore, the system monitors cash payments, requiring the generation of invoices for all transactions, including those settled in cash.

Finally, TicketBAI is also a push for the digitization of Basque businesses. With its mandatory use, it is necessary for (especially) small and medium-sized enterprises (SMEs) and self-employed individuals to adopt technology capable of complying with regulations, hoping that it will be a step towards the adoption of new technologies. The system simplifies the relationship between companies and self-employed individuals and the administration, digitizing bureaucratic processes, demonstrating that digitization offers significant benefits in terms of competitiveness.

The solution consists of three basic steps:

The generator creates a file with an individual invoice for each transaction, including each payment received from a customer.
The file is sent to the corresponding Tax Authority within the specified deadlines and following the established guidelines for validation.
A TBAI code and a QR code are included in the invoice, containing all the necessary information for the Tax Authority to identify it.

As mentioned earlier, all companies and self-employed individuals must have a computer system that generates TBAI and QR codes.

As inferred from the previously mentioned information, TicketBAI affects every business with its fiscal address in the Basque Country. Therefore, its use is not dependent on income, type of company, size, tax regime, etc. Every economic activity in Euskadi must be adapted to this system.

Like any obligation, non-compliance entails penalties, which can be of two types:

Penalties for non-compliance, amounting to 20% of the previous year’s invoice, with a minimum of €20,000, regardless of the company’s size or income. Recurrence can increase the percentage to 30%, with a minimum of €30,000.
Penalties for manipulation and deletion, applicable to both the party involved and the company responsible for managing the system. The fine would be 20% of the previous year’s revenue, with a minimum of €40,000 (or 30% and a minimum of €60,000 for repeat offenders).

Companies with their fiscal headquarters in the Basque Country must integrate software capable of meeting the discussed requirements.

This software must also be validated by the public administration to be usable. Thus, the companies responsible for developing such applications or add-ons had to make their initial submissions in September 2020. Now, other organizations have the option to acquire these programs to comply with the regulations.

As is customary in similar cases, during the initial phase, the programs were not connected to the Basque Tax Authorities. It has been since January 2021 that this connection has taken place, allowing for voluntary submissions to, on the one hand, test the solution and, on the other hand, access tax benefits.

With an appropriate solution, we will be able to meet the requirements of TicketBAI in the three Basque provinces as follows:

Generate and electronically sign the TBAI files (XML File).
Conduct communication with the corresponding Tax Authority to send the TBAI file with its submission grid and response viewer.
Issue invoices with their QR code and TBAI Code.

Additionally, for companies in the province of Bizkaia, we have the solution to comply with the requirements of BATUZ: maintenance of the LROE records – Model 140 and Model 240 for VAT. Ask us without obligation.

This new system of communication and income notification for business activities of local entities in the Basque Country aims to achieve several objectives:

Streamline billing processes to save costs and time.
Improve the relationship between Basque companies and public entities.
Facilitate possible claims on invoices.
Minimize tax fraud, allowing an increase in public revenue.

Are there any drawbacks? This type of change always involves some “inconvenience” for companies and self-employed individuals. The main one is the need to adapt to a new system, which also requires billing software to comply (which can be a problem for small businesses).

In any case, these are not significant inconveniences for the vast majority of companies and self-employed individuals; much less considering the expected benefits.

FAQs

The similarity that the system shares with other processes can lead to confusion, potentially causing non-compliance with the regulation; so let’s try to clarify what it entails in comparison to other systems.

VS SII

Although the Immediate Supply of Information (SII) has similarities with TicketBAI, they should not be mixed.

The SII has been in force since 2017 when companies were first required to electronically communicate billing data to the Administration.

It is true that both systems report income, aim to facilitate accounting, and are tools against tax fraud. However, TicketBAI is for all companies (even those with a significant amount of cash income) and is a tool for both companies and self-employed individuals to declare their true income, making it more difficult to manipulate accounts. On the other hand, the SII is a system for companies that invoice more than 6 million euros annually and VAT groups registered in the REDEME.

Moreover, the software required for TicketBAI has specific requirements, while for the SII, a relatively standard accounting program with some modifications is sufficient.

VS electronic invoice

There are also similarities between the two, but they are not the same either. The TicketBAI system is focused on combating tax fraud, while the electronic invoice is only a digital fiscal document.

It is true that the electronic invoice helps control income, being mandatory only for companies invoicing the Public Administration. TicketBAI, on the other hand, will be mandatory for all companies in the Basque Country (and in the future, for the entire country of Spain).

TicketBAI in Alava

The project envisions the following phases for TicketBAI to become mandatory, according to sectors:

04/01/2022: Advisory services.
07/01/2022: Professional activities and pharmacies.
10/01/2022: All other taxpayers.

It will be possible to start using TicketBAI voluntarily from 01/01/2022.

Norm 13/2021 of TicketBAI creates a deduction in the full quota of 30% of the amount of investments and expenses incurred.

Those who voluntarily participate as of 01/01/2022 will see this deduction increased to 60% of the investments and expenses incurred, with a maximum base of €5,000.

TicketBAI in Gipuzkoa

The mandatory implementation of TicketBAI will be carried out in phases, based on sectors of activity:

01/01/2022: Tax management professionals.
03/01/2022: Professional activities.
05/01/2022: Retail trade, hospitality, and lodging sector.
10/01/2022: Construction, real estate development, transportation, and recreational, cultural, and personal services.
12/01/2022: Manufacturing, wholesale trade, telecommunications, financial services, and artists.

The voluntary period in Gipuzkoa is throughout the year 2021 in general, but there are different voluntary periods depending on the sector: one month before the start of mandatory compliance in each sector.

12/01/2021: Tax management professionals
02/01/2022: Professional activities
04/01/2022: Retail trade, hospitality, and lodging sector
09/01/2022: Construction, real estate development, transportation, and recreational, cultural, and personal services
11/01/2022: Manufacturing, wholesale trade, telecommunications, financial services, and artists

Taxpayers who choose to enter the voluntary period may apply a deduction amounting to 60% of the expenditure incurred in both Personal Income Tax (IRPF) and Corporate Income Tax, with a limit of 5,000 euros.

TicketBAI in Bizkaia

It will be possible to start using TicketBAI voluntarily from 01/01/2022.

Incentives for Implementation Taxpayers who implement TicketBAI during the voluntary period will have a progressive compensation:

From January 1, 2022, they will have a 15% reduction in their taxable base in Personal Income Tax (IRPF) or Corporate Income Tax (IS) for the years 2022 and 2023.
From April 1, 2022, the compensation will be 13% in 2022 and 2023.
From July 1, 2022, 11% in 2022 and 2023.
From October 1, 2022, 9% in 2022 and 2023.
From January 1, 2023, 5% in 2023.
From April 1, 2023, 4% in 2023.
From July 1, 2023, 3% in 2023.
From October 1, 2023, 2% in 2023.

Additionally, the deduction of 30% of the expenses incurred to adapt computer systems, and if necessary, acquire new equipment, is extended for two years (until 12/31/2023).

The implementation of TicketBAI in Bizkaia has been extended until 2026. Originally, it was expected that all companies and professionals in Bizkaia would adhere to the new regulations in January 2024, but the Provincial Council of Bizkaia has extended the implementation period until 2026, with staggered dates for different types of taxpayers.

1/1/2024 – Corporate Income Tax contributors that are not micro, small, or medium-sized enterprises (7,084 companies in total, 5,919 pending incorporation into the new system).
1/7/2024 – Individuals, entities in the income attribution regime, and contributors to Corporate Income Tax that are micro, small, or medium-sized enterprises and engage in industrial, manufacturing, construction, and transportation business activities; financial, legal, insurance, rental, and other professional activities except for education and cultural activities (45,452 individuals in total, 35,752 pending incorporation into the new system).
1/1/2025 – Individuals, entities in the income attribution regime, and contributors to Corporate Income Tax that are micro, small, or medium-sized enterprises in the hospitality, trade, repair of movable goods, and hairdressing sectors, and other personal services whose owners are legal entities and ERAR with PJ (7,917 individuals in total, 6,602 pending incorporation into the new system).
1/7/2025 – Individuals, entities in the income attribution regime, and contributors to Corporate Income Tax that are micro, small, or medium-sized enterprises in the hospitality, trade, repair of movable goods, and hairdressing sectors, and other personal services whose owners are individuals and ERAR without PJ (18,516 individuals in total, 16,500 pending incorporation into the new system).
1/1/2026 – Entities wholly and partially exempt from Corporate Income Tax. Non-profit entities. Contributors engaged in agriculture, livestock, and fishing, as well as professionals in education, cultural services, and other contributors (10,694 individuals in total, 9,253 pending incorporation into the new system).