Figure of Digital Document Reception Service Provider comes into being

As we reported previously, in this post, 2015 for Mexico is a year of new tax developments in the electronic sphere. The Omnibus Tax Ruling (RMF) announces the creation of a new figure: the Digital Document Reception Service Provider or DDRSP. This will make it easier for taxpayers to deliver the different documents they have to declare to the Tax Administration Service (SAT). The first to be covered by the scheme will be the Suppliers’ VAT Statement (DPIVA). Later, annual tax returns and interim payments are next in line for inclusion in e-invoicing.

As specified in section of the Omnibus Tax Resolution (RMF), authorized reception service providers will take care of validating the documents from taxpayers and assigning the folio number that identifies the file content. They must also incorporate the digital seal of the SAT and comply with the technical specifications corresponding to each type of invoice document. Then, they send the taxpayer an e-acknowledgment of the information provided, or else a rejection notice if any mistakes have been detected.

Who can be a DDRSP?

The regulation states that Authorized Certification Providers (PAC) and legal entities that meet the set requirements may be granted approval by the SAT. Nevertheless, the application procedure to become a DDRSP is different. PACs only need to notify the AGSC’s Central Administration for Quality Management, indicating that they also want to operate as service providers. The remaining entities, however, must make an application under the provisions of information sheet 176/CFF.

What are the requirements for a DDRSP?

DDRSPs must be up-to-date on fulfillment of their tax obligations, hold a subscribed and paid-up company capital of at least ten million pesos and audit their financial statements for tax purposes. Another requirement consists of ensuring the protection of personal data regarding the information contained in the digital documents they receive and keeping them for at least three months. Likewise, they must provide taxpayers with an electronic acknowledgment, as well as a tool that can check the details of the same.

Service providers may also be reprimanded if they commit any of the infractions set forth in section of the RMF.

How do I know who the DDRSP are?

Currently due for imminent release, the SAT website will publish the name, corporate name and RFC password of the digital document service providers whose applications have been accepted or rejected.  The authorization granted by the SAT shall remain in force for this tax year and the next.

Tax obligations in Mexico 2015

Obligaciones fiscales para México

Mexico is advancing towards construction of an increasingly electronic society. Most accounting procedures are already carried out digitally, enabling users to save time, cut business costs and improve fiscal control. This has made the North American country a benchmark for other neighbouring countries and even Europe and Asia. Nevertheless, there is still a long way to go.

In 2015, the Tax Administration Service (SAT) has established new tax obligations, which will also be transacted electronically and added to the breakthroughs achieved last year. In general, these are the requirements to be taken into account by companies in order to fully comply with the legislation:


Widespread use of CFDI

Since 2014, all Mexican taxpayers are required to use the Digital Tax Receipt via Internet (CFDI) in their business relations, as set forth in Article 29 of the Federation Tax Code. Mexico is currently one of the leading countries worldwide in the rollout of electronic invoicing, with a high penetration level which is gradually increasing.

To issue CFDI, taxpayers must use one of the 79 Authorized Certification Providers, which assume the responsibility for ensuring validity of documents for tax purposes and declaring them to the SAT.

Edicom was the first company to be certified as a PAC in Mexico and has different solutions to fully automate the creation, sending and storage of invoices. This way, companies can cut costs and boost productivity, while fulfilling their tax obligations.


Invoice storage in XML

Paper invoices are not valid for the SAT, as they only presuppose the existence of the tax receipt. In other words, taxpayers must store their CFDI in XML format. This way, they can make the appropriate deductions.

EDICOM holds NOM 151 accreditation (electronic notary) to ensure compliance with the preservation and safekeeping requirements for e-invoices. Find out more about this certification here.


Electronic payroll

All companies must issue their payrolls using the CFDI schema. This measure, which was introduced in mid-2014, constitutes an economic saving of up to 88% on each document. Now, the process is handled electronically and workers can sign their receipts with no need to leave their workstation, using solutions such as Business Mail Payrolls. This way, they have managed to do away with long queues waiting in line.

Taxpayers must bear in mind that this requirement applies to businesses of all shapes and sizes. Moreover, it is necessary to issue a CFDI for each payment made.


Electronic accounting

This is undoubtedly the main new tax feature for entrepreneurs in 2015. As stated by the SAT in a press release, 203,807 taxpayers must begin sending their accounting information from this January. However, corporations and individuals with annual earnings of less than 4 million pesos will have another year’s deadline to start using electronic accounting. In other words, until January 2016.


Electronic withholding document

The SAT, through point I.2.7.5 of the Omnibus Tax Ruling for 2014, announces the obligation to issue certificates of retentions (withholdings e-document) for all taxpayers providing online information on tax withholdings and payments.

This is an e-document containing the fiscal information on payments made by the taxpayers, to which the pertinent withholding complement is added in each case. This way, taxpayers must generate a standard XML file with the information required for each item subject to withholding of taxes set forth in the catalogue of withholdings published by the SAT.

Prior to submission to the SAT, each invoice must be submitted to an Authorized PAC for incorporation of the digital tax stamp that certifies it.

Businesses and taxpayers may issue the e-document with their retentions on an annual basis by the 31 January 2015 deadline for the issuing of withholdings pertaining to tax year 2014.

Find out more more about this tax requirement.

Latin America at the forefront of electronic invoicing

Factura electrónica en Latam

Electronic invoicing is currently in full expansion worldwide. According to Billentis, this year roughly 40 billion invoices will be exchanged in this format. Of these, more than half, about 25 billion, correspond to Latin America. This region has already become the most advanced in the field in the international scope, due to the fiscal policies carried out by the governments of the various states.

Mexico is positioned as the front runner. This year the country celebrated the tenth anniversary of the Digital Tax Receipt via Internet with a high degree of penetration. Since 2014, the so-called CFDI is mandatory for almost all taxpayers. Now, the Tax Administration Service continues to develop policies designed to cut down the number of administrative procedures on paper. For example, new measures to encourage electronic accounting, or the new e-document for tax withholdings and payment information.

Along with Mexico, Brazil has one of the highest rates of uptake. According to Billentis, in this case the figure is around 90 %. This is due to strict legislation rolled out some years ago, which requires a large number of taxpayers to use the digital document known as Nota Fiscal Electrónica (NF-e).

In Chile, adoption of this system is also widespread, although until recently the Electronic Tax Document was voluntary. It is estimated that more than half of all invoices are now generated electronically, and an ongoing high growth rate is expected due to the new policies. Last October, the country’s big businesses were required to sign up and the Internal Revenue Service expects migration to be completed by 2018.

In the group of e-invoicing early adopter countries, we must not forget Guatemala. There, since 2013, the FACe scheme is mandatory for all individuals or legal entities classified as special taxpayers.

This has also been a year of great breakthroughs for Uruguay, which is destined soon to become another of the leading countries in e-invoicing. D.G.I. Resolution Nº 798/2012 has prompted around a thousand large companies to start using the electronic invoice for tax purposes known as Comprobante Fiscal Electrónico. Currently, the General Directorate of Taxation plans to set out a schedule for adaptation that includes new groups of taxpayers. A similar measure was taken by Argentina with General Resolution 3571/2013, which led thousands of taxpayers to sign up to this system between April and August. Moreover, in recent months the Federal Administration of Public Revenue has decided to include new sectors in e-invoicing, such as the mining industry .

Ecuador has adopted a similar model to these countries and is currently immersed in the process of rolling out electronic invoicing. On 1 October, the first taxpayer group signed up and the rollout of electronic invoicing is expected to be completed in 2015.

In Peru, taxpayers have been able to present their bills electronically on a voluntary basis since 2010, although legislation is moving towards making it mandatory. This year, 239 of the country’s largest companies had to roll out the system and according to some newspapers, the National Superintendency of Customs and Tax Administration proposes that 100% of taxpayers should be using electronic billing by 2017. However, no legislative action has yet been taken in this sense.

Another new feature this year is the announcement by the Costa Rica Ministry of Finance of a new project for mandatory e-billing and e-signature. The new system, which still has no release date, will replace the setup rolled out in 2013 to ensure information processing.

Over the coming year, electronic invoicing is expected to keep on growing worldwide. The policies promoted in the Latin American states are already configured as a role model for many European and Asian countries, such as Vietnam.


International Electronic Invoicing Platform

Companies operate in a global environment with partners and customers from different countries and regions. It is indispensable to have e-invoicing solutions tailored to this market situation. EDICOM offers businesses an electronic invoicing platform with permanent monitoring of the state of the laws and regulations in the countries concerned. The result is an e-Invoicing solution ready to issue legally valid electronic invoices anywhere in the world, transparently for our clients, as the data used to build the files (CFDI, NFe, DTE, Facturae, Fattura PA…etc), are taken automatically from the company’s own ERP or accounting system.

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Taxpayers now required to issue tax withholdings document electronically by January 31, 2015

Documento electrónico de retenciones

The SAT, through point I.2.7.5 of the Omnibus Tax Ruling for 2014, establishes the obligation to issue the certificates of retentions (withholdings e-document) for all taxpayers who issue digital invoices online including information on withholdings and payments for tax purposes.

Businesses and taxpayers may issue the e-document with their retentions on an annual basis by the 31 January, 2015 deadline for the issuing of withholdings pertaining to tax year 2014.


What is the electronic withholdings and payment information document?

An e-document that contains the information on the withholdings and payments made by taxpayers. This is constructed on the basis of a set of general tax data, to which complement is added with the corresponding tax in each case.

This way, taxpayers must generate a standard XML file with the information required for each item subject to withholding taxes set forth in the withholdings catalogue published by the SAT.

The receipt must be submitted to an Authorized PAC for incorporation of the digital tax stamp that certifies it, prior to its declaration to the SAT. Finally, the receipt is sent to the receiver so that they can present it as required for tax purposes.


EDICOM integral solution

EDICOM, as an Authorized Certification Provider (PAC), can supply an integral solution to automate the entire process of issuing e-documents with information on tax withholdings and payments.

This way, our software takes the data needed to build the XML directly from your ERP or accounting system, then stamps it and submits it to the SAT, before forwarding the receipt to the receiver of the withholdings. Our CFDI issuing platform provides a significant added value with the storage system for invoices under Official Mexican Regulation NOM-151-SCFI-2002.

From EDICOM we urge you to contact your commercial adviser as soon as possible, given the proximity of the deadline (January 31, 2015) for presentation of withholdings pertaining to the year 2014.


CFDI or Mandatory e-Invoicing in Mexico: Challenges and Opportunities

Between 2005 and 2013 in Mexico, some 10 billion electronic invoices were issued. Taking into account that these data have been growing exponentially in recent years, it is easy to suppose that this figure will have grown considerably by the end of 2014

But what is the reason for such widespread use of e-billing in Mexico? Mainly the fact that use of the CFDI, which is how the electronic tax document used to issue invoices is designated, is mandatory. Nobody can have missed the fact that the monitoring of invoices, as a support to document business transactions, will prove very useful to the tax authorities to ensure due payment of the taxes associated with every trading operation.

In this sense, the SAT or Mexican Tax Administration Service has developed a system whose principal raison d’être was to exert this control, in such a way that only those bills declared online to the SAT with the pertinent electronic certification will be legally valid for tax purposes.

But beyond the obligation, electronic invoicing provides key competitive advantages for companies: Better control systems, greater efficiencies, lower costs, shorter response times, etc. Achieving this level of efficiency calls for something more than simply issuing electronic invoices of an obligatory nature. An improvement in management processes is also required, along with greater technological development and a culture of ongoing improvement. It requires a decisive boost for e-commerce among companies in general, private individuals and public administrations, and which would be achieved largely by placing the focus on two major objectives:


Sending 100% of bills in electronic format

If practically 100% of invoices issued in Mexico are electronic, why are so many still printed on paper today? The paradox arises that a high percentage of these documents have to be printed out in order to reach their destination. The same technological solutions employed in the issue of CFDIs should also be prepared to receive them, thereby automating the delivery and integration of the invoices into management systems. On many occasions the problem is not so much technological as procedural, and calls for diverting the control systems based on workflows of authorizations around the document on paper towards parallel models based on electronic systems.


Integrating new electronic transactions

The invoice is a key document in business relations, but it is still just another and the final link in the chain.

Why not take advantage of the same technology used for issuing electronic invoices to manage purchase orders or dispatch advices in electronic format? Why not extend technology-based models such as EDI (Electronic Data Interchange)? The possibilities of keeping track of a bill with its corresponding purchase orders and delivery receipts would help to automate sending, reception and query processes and make them more efficient.

Building an electronic society is hard work, which in the case of Mexico already has a solid foundation thanks to e-invoicing. Continuing to taking steps to overcome the fiscal requirement of issuing invoices, and making it a real opportunity to make the Mexican economy even more competitive and efficient, is the big challenge that lies ahead both for public administrations and private initiatives.

This article is part of an analysis of electronic invoicing in Mexico, performed by the online magazine, The Paypers.

For the entire article, please send an email to to receive the E-invoicing Paypers, a premium-newsletter produced by The Paypers.