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E-Invoicing in Russia: Ready for take off Grigoriy Povarov Business Development Director SKB Kontur, Russia 6th European EXPP Summit, October 11-12, 2010, Munich

E-Invoicing in Russia: Ready for take off

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Page 1: 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

Page 2: E-Invoicing in Russia: Ready for take off

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=

Page 3: E-Invoicing in Russia: Ready for take off

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

Page 4: E-Invoicing in Russia: Ready for take off

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)

Page 5: E-Invoicing in Russia: Ready for take off

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

Page 6: E-Invoicing in Russia: Ready for take off

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 :-(

Page 7: E-Invoicing in Russia: Ready for take off

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)

Page 8: E-Invoicing in Russia: Ready for take off

digital signature

fixed XML format

time stamping

signature verification

certified by Gov

roaming

Supplier Buyer

Service provider Service provider

Page 9: E-Invoicing in Russia: Ready for take off

With or without signature? PDF? EDI? XML?

There are no such questions in Russia!

Do we need unified format?

Service providers of direct communication?

Page 10: E-Invoicing in Russia: Ready for take off

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)

Page 11: E-Invoicing in Russia: Ready for take off

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

Page 12: E-Invoicing in Russia: Ready for take off

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

Page 13: E-Invoicing in Russia: Ready for take off

and much more...

Page 14: E-Invoicing in Russia: Ready for take off

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)

Page 15: E-Invoicing in Russia: Ready for take off

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

Page 16: E-Invoicing in Russia: Ready for take off

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)

Page 17: E-Invoicing in Russia: Ready for take off

Questions & Answers

Page 18: E-Invoicing in Russia: Ready for take off

Thank you!

Grigoriy PovarovBusiness Development Director

SKB Kontur, Russia

[email protected]

twitter.com/gpovarov