e-invoicing in russia: ready for take off

E-Invoicing in Russia:Ready for take off

Grigoriy PovarovBusiness Development DirectorSKB Kontur, Russia

6th European EXPP Summit, October 11-12, 2010, Munich

What is Russia?

Sources: CIA The World Factbook, TNS Global

Area: 17 million sq. km (4 x EU)

GDP: $1.255 trillion (10% of EU)

Population: 140 million (30% of EU)

Business class: 2 million (10% of EU)

Internet users: 65%

Time zones: 11 (!)

×48=

Document & Invoicing landscape

ContractBill

(payment)Delivery

note / etcInvoice

(VAT)

•15 billion inv. annually (30 billion in EU)

•60% biz produce 1000+ inv., 20% biz produce 10000+ inv. annually

•Documents with signatures & stamps (MUST)

•5 years storing (MUST)

•99,99% in PAPER

Sources: PCWeek/Russian Edition, Russian Federal Tax Office

VAT-invoicing detailsGov.

invoice

biz biz

•Unified printable form, strict rules for content

•Gov’s inspection at any time (1 time for 3 years guarantee)

•Strong penalty for violations (18% of invoice amount + fees)

BUT!

Main way for invoice exchange? Russian Post!

Next door: 4-7 days

In city: 10-23 days

Between cities: 5-40 days

42 000 offices all over Russia€3 for one mail

Sources: Russian Post, «Komsomolskaya Pravda» newspaper

E-Invoicing in Russia: Pro & Contra

•Huge distances and bad offline communications

•High risks of penalties

•Long-time document storing

•Active role of Russian Gov

•Automation is not a fetish (average salary — €300/month)

•Cost reduction ideas are not very popular — too many oil and gas :-(

What about E-Invoicing?

Yesterday

Today (formally from 2 Sep 2010, really from 1 Jan 2011)

•biz-doc in paper or digital signed

• Invoice only in paper

(if you have agreement with your partner)

(if you want to be VAT-OK for Gov)

• Invoice in paper or digital signed(under Gov’s rules)

digital signature

fixed XML format

time stamping

signature verification

certified by Gov

roaming

Supplier Buyer

Service provider Service provider

With or without signature? PDF? EDI? XML?

There are no such questions in Russia!

Do we need unified format?

Service providers of direct communication?

Russian digital signature issues

•Own criptography standart (no RSA, no AES, ГОСТ!)

•Strong sertification of cryptograpy software by Federal Security Service (ex-KGB)

•Cryptography software export is banned

•Obligatory licensing for Certificate Authorities & Service Providers with digital signature (e.g. E-Invoicing SPs)

B2G-service providers

46% are still offlineSKB Kontur

850 000

Kaluga-Astral237 000

Tensor400 000

Taxcom200 000

Sources: Forbes Russia, Russian Federal Tax Office

•Every (!) middle/large biz has its own digital signature

•54% of taxpayers use electronic tax declaration

•100+ B2G-service providers

•50+ digital signature certificate authorities

taxp

ayer

s

Looking for cooperation?

Welcome to EXPP Operators Forum: October 13, 14:00, Breakout Session D

«Search and find appropriate interconnection partners»

— Real-life Russian Service Provider will speak about its business & cooperation

and much more...

Action! No waiting!

•Your Company’s Global IT vs. Local reqs. — big issue

•Deep pilot project for Russian E-Invoicing of ECR-Rus with Metro Cash & Carry, Kraft Foods and SKB Kontur

•Results presented at 6th Annual ECR Forum and sent to Gov

•http://slidesha.re/aoDKxX (Metro Cash & Carry)

•http://slidesha.re/c4MYWW (SKB Kontur)

•http://slidesha.re/cBXfSv (Kraft Foods)

E-Invoicing in Russia: perspectives

2M Biz

Uniform rules

Gov active role

A lot of service providers

Legislation is OKPlenty of international

companies

High internet & digital signature penetration

E-Invoicing in Russia: perspectives

2004 2005 2006 2007 2008 2009

850 000 taxpayers @ SKB Kontur

Last years electronic B2G ex-ponential growth — Biz are ready for innovations.

« Russia has all the ingridients to penetrate to market of electronic document flow much faster than the Europe is doing» (Bruno Koch)

Questions & Answers

Thank you!

Grigoriy PovarovBusiness Development Director

SKB Kontur, Russia

gp@skbkontur.ru

twitter.com/gpovarov