Interoperability of Electronic Invoicing Systems in the APEC Region

APECCommittee on Trade and Investment February 2025 Interoperability of ElectronicInvoicing Systems in theAPEC Region APECCommittee on Trade and Investment February 2025 APEC Project:CTI 06 2024S Produced by:Deloitte Touche Tohmatsu50 Bridge StreetSydney, NSW, 2000Australia With support of:Department of Foreign Affairs and Trade,RG Casey Building, John McEwen Crescent,Barton ACT 0221 Australia.Website:https://www.dfat.gov.au/ ForAsia-Pacific Economic Cooperation Secretariat35 Heng Mui Keng TerraceSingapore 119616Tel: (65) 68919 600Fax: (65) 68919 690Email:info@apec.orgWebsite:www.apec.org ©2025APEC Secretariat APEC#225-CT-01.1 Contents GlossaryivExecutive summaryvi1Introduction111.1Background and context111.2The'Principles for the Interoperability of Electronic Invoicing Systems in the APEC Region'111.3Purpose of this review111.4Data Sources and methodology121.4.1Data Limitation122Trade and invoicing in APEC132.1Trade value and trends132.2The growth of eInvoicing in APEC132.2.1Digital maturity of businesses142.2.2Other considerations relating to trade across APEC153eInvoicing state of play163.1What is eInvoicing?163.2eInvoicing models163.2.1Interoperability163.2.2Continuous Transaction Control (CTC) Models173.3Comparison and compatibility between different models183.4Current state of eInvoicing acrossAPEC193.4.1Australia193.4.2Brunei Darussalam203.4.3Canada203.4.4Chile213.4.5People'sRepublic of China213.4.6Hong Kong, China213.4.7Indonesia223.4.8Japan223.4.9Republic of Korea233.4.10Malaysia233.4.11Mexico243.4.12New Zealand243.4.13Papua New Guinea243.4.14Peru243.4.15The Philippines253.4.16The Russian Federation253.4.17Singapore263.4.18Chinese Taipei263.4.19Thailand273.4.20The United States283.4.21Viet Nam28 4.1Agreements promoting interoperability in digital trade4.1.1Chile; Korea;New Zealand;andSingapore4.1.2E-commerce Agreement4.1.3Australia and Singapore4.1.4United States (US) and the European Union (EU)4.2Examples of cross border interoperability in practice4.2.1Australia and New Zealand:4.2.2The European Union and VAT in the Digital Age4.2.3Italy and San Marino 4.2.3Italy and San Marino324.3Challenges and key factors for achieving interoperability334.3.1Technical Interoperability334.3.2Regulatory and compliance considerations364.3.3Cost and resource constraints364.3.4Security measures and data privacy374.3.5Resistance to change374.3.6Complex business networks374.3.7Region-specific technical barriers374.3.8Stakeholder Engagement and Collaboration375Potential economic gains from enhancing interoperability395.1Economic benefits of interoperable eInvoicing systems395.2Quantifying the productivity gains and costs savings from greater adoption of eInvoicing incross border trade395.2.1Data and methodological approach395.2.2Productivity benefit and cost savings405.2.3Economic impact of eInvoicing adoption415.3Other economic benefits of eInvoicing445.3.1Reduced cyber security risks445.3.2Improved accuracy and data quality455.3.3Enhanced transparency and visibility455.3.4Procure-to-Pay (P2P) Digitisation465.3.5Faster payment processing465.3.6Increased integrity and reduced tax evasion465.3.7Compliance and regulatory alignment465.3.8Potential impacts on the environment465.3.9Enhanced business relationships475.3.10Scalability and global reach475.3.11Stimulated economic growth475.4Summary of eInvoicing benefits485.5Costs of implementation485.6Costs and benefits and the impact of interoperability506Recommendations for implementing eInvoicing across APEC516.1Proposed recommendations for interoperability516.2Recommendations for economies based on eInvoicing maturity536.3Specific economy recommendations54A1.Appendix 1: Economy Summary57A2.Appendix 2: File Format Protocols and Data Exchange Formats60A3.Appendix 3: Economic modelling steps and key assumptions62A3.1Overview of economic modelling for eInvoicing62A3.2Identifying the value of bilateral trade flows between APEC economies and averagetransaction value62A3.2.1 International trade value across APEC economies62A3.2.2 Average transaction value and adjustment for bilateral trade relationships63A3.2.4 Calculating the number of bilateral transactions between APEC economies64A3.3Evaluate productivity gains and cost savings per invoice64A3.3.1 Productivity metrics and cost saving assumptions64A3.3.2 Assumptions and data considerations65A3.4 Assessing potential economic benefits by economy at varying adoption rates65A3.4.2 Scenario analysis for adoption rates66A3.5 Caveats and limitations67A3.5.1 Range of results and scenario variability (Best case vs. Worst case)67Limitation of our work68General use restriction68 Charts Chart 2.1: Projected market value of electronic Invoicing (Billion USD), 2024 to 2028.........................................14Chart 5.1: Projected productivity benefits for APEC trade vs eInvoicing adoption rates(Billion USD) *...............42Chart 5.2: Annual APEC Economies’ Productivity gains fromeInvoicing (Billion USD)...............