Last July 13th, Mexico’s tax administration published modifications to the third miscellaneous fiscal resolution for 2016 along with its annexes on its website. The planned changes will become effective for taxpayers on August 15th ,although there are some exceptions. The supplement for payments will be mandatory 30 days after the tax administration has made it public.
Among all of the modifications, this new supplement is one of the most important and affects a large number of businesses and taxpayers. In the legislation, Mexico’s tax administration includes different situations for optional or mandatory use for payments made in relation to online digital invoices.
- Operation of payments in installments. Once the supplement for payments becomes active, it will be mandatory for all operations paid in installments. Companies will have to issue an electronic invoice for the total value of a transaction at the time it’s made. Then it must issue an online digital invoice for each payment made. To do this, it will be necessary to use the supplement for payments and the total amount of the operation in pesos.
- One installment payments, including credit transactions. In this case, using the supplement for payments is optional. However, those wishing to use the supplement may do so when a taxpayer makes one installment payment and when the electronic invoice is issued.
- Invoice protection. The supplement will limit the cancellation of electronic invoices since it’s evidence that the payment has been made fully or partially. If a correction is necessary, companies will have to issue a credit note that indicates the error. This way the new supplement will provide greater legal security to fiscal transactions, although this use is also optional.
What information will the supplement for payments contain?
The tax administration is currently working on the payment supplement, a process in which EDICOM, a company that provides certification services for online digital invoicing along with other groups in the sector, participated in. When it’s ready, the supplement will be published on the tax administration’s website. Although there may be some small modifications, the most foreseeable modifications is that online digital invoices will include the following fields:
- Date of payment
- Form of payment
- Field type
- Operation number
- Payer’s name
- Payer’s RFC account
- Payer’s account
- Beneficiary’s name
- Beneficiary’s RFC account
- Beneficiary’s account
- Payment chain type
- Payment certificate
- Payment chain
- Payment stamp
- Related documents
What are the advantages?
The supplement for payments, which includes the third resolution of modifications, comes at a time during which the electronic invoice is making great strides in Mexico. The tax administration addressed update 3.3 of the online digital invoice, which will take effect in 2017, with the objective of correcting some of the errors that have been detected over the past few years and to simplify tax compliance for taxpayers.
These same objectives are being pursued with the creation of the supplement for payments made. Its implementation will mean advantages in the administrative field for businesses. These are some of the advantages:
- It will avoid false duplications of payments made by installments.
- It will prevent excessive cancellation of invoices because some taxpayers have informed the tax administration that some suppliers nullified payment proofs without reporting the cause. This made deductions and tax credits impossible.
- It will allow one to know whether or not an invoice has been paid. This way, it won’t be possible for clients who haven’t made payments to use the invoice to deduct expenses.
- It will automate the process of capturing payments, which will minimize the time dedicated to this task while reducing human errors in the process.
- It will accelerate management processes.
Other Foreseen Modifications
Beyond the incorporation of the payment supplement, the third resolution of modifications will cause other changes related to the electronic invoice. In particular, it will modify the requirements of the printed representation of digital online invoices as well as some obligations of certified providers authorized to send digital documents. To learn more about these changes in depth, consult the tax administration’s website.
EDICOM has been authorized by Mexico’s tax administration (SAT) as the first provider certified to receive digital documents (PCRDD) after a rigorous process of technological and fiscal auditing. Additionally, EDICOM was the first provider authorized to issue electronic invoices (CFDI) by Mexico’s tax administration in 2010. With this new certification, EDICOM has become one of the main companies in the country to provide fiscal electronic data integration services.
The new designation has already appeared in the Miscellaneous Tax Resolution for 2015 and is about how external suppliers are responsible for validating digital documents, certifying them and securely sending them to the tax administration. One of the differences with being certified to send digital documents is the obligation to comply with syntactic and semantic validations to ensure the quality of data.
Why must a provider be certified to receive digital documents (PCRDD)?
The main objective of this new electronic system is to make the service of receiving digital documents more available, to offer the most advanced solutions to businesses and to simplify the management of electronic communication between tax payers and the tax administration which is a tedious process.
This new initiative unifies and simplifies all electronic communication procedures into a single solution that meets the standards of the tax administration. Therefore the service of receiving digital documents becomes more available and gives companies the choice of having more advanced technological solutions that are not only customizable but integrated with their systems.
Another advantage of this system is that it generates an acknowledgement every time a document from a tax payer is received. It will also show the status of the validation process, an ID number, and a digital seal as well as other complementary data. This system enables companies to receive precise data and exercise better control over that data.
What documents are validated?
Currently, the system for receiving digital documents validates declarations from VAT providers. However, Mexico’s tax administrations plans to add other tax services and documents such as electronic accounting, annual statements, interim payments and DeclaraNot, an electronic program used by notaries to present information about monthly operations.
The perfect provider
EDICOM is a global provider of electronic data interchange solutions, electronic invoicing and other digital transactions that align with the fiscal requirements of each country. Not only has EDICOM been authorized as the first provider certified to receive and send digital documents in Mexico, but it’s also a leader in the development of software that optimizes communications in the B2B sector.
Get more information about our PCRDD Service
Billentis published a report on e-invoicing/e-billing titled, “Entering a New Era,” which states that in 2015, approximately 42 billion electronic invoices will be processed around the globe. Latin America will process 25 billion of these electronic invoices, which is more than half of the e-invoices being processed worldwide. These facts confirm that Latin America is a global leader in paperless invoicing initiatives.
In Latin America, Chile is the birthplace of the electronic invoice. Taxpayers who live there have the option of choosing whether or not they want to use electronic invoicing since exempt resolution number 45 was passed in 2003. However in 2014, the internal revenue service began to take steps to establish a timeline for adopting obligatory e-invoicing, which will end in 2018. Chile wants to establish an e-invoicing regulation similar to the ones implemented in Mexico and Brazil, which has made them the two most developed countries in electronic invoicing at an international level.
Brazil has managed to expand e-invoicing by 90% in the B2B and B2G sectors. According to Billentis’ report, Brazil exchanges almost 1 trillion digital documents every month. The state treasury’s challenge is to take this technology a step further by requiring companies to identify end consumer transactions with a specific type of electronic fiscal note, also known as a fiscal note for end consumers.
The e-invoice has also been expanding rapidly in Mexico due to e-invoicing implementations that have been taking place since 2004. Since electronic invoicing already extends to areas such as payroll or electronic accounting, it’s been estimated that the country processed 5 trillion electronic invoices in 2014.
In 2015, Argentina is expected to experience high growth as well. The tax administration recently added hundreds of thousands of taxpayers to the expansion program and has also announced plans to continue expansion throughout 2016. Also, Uruguay will play a leading role this year. Its tax administration hopes the growth of this system will reach 40%.
Other countries such as Peru, Costa Rica and Colombia that already use electronic invoicing are on the verge of making even greater progress soon. In the near future, Colombia is expected to approve an expansion regulation that would require certain businesses to migrate to the new system in 2016 while others will be added as time goes on.
Mexican airlines have been required to issue digital tax documents for airplane ticket purchases since July 2014. After the tickets have been purchased, these tax documents must be sent to all taxpayers who request them within two business days.
For huge corporations in Mexico that purchase large quantities of plane tickets, the retrieval of digital tax documents can be a long and arduous process. That’s why EDICOM has developed a service specifically designed for automatically obtaining tax documents, therefore making daily management and administration tasks more efficient.
The digital tax document platform recognizes more than 90% of the airline hubs operating in Mexico. The platform’s ability to do this enables it to retrieve the digital tax documents for airplane ticket purchases.
How does this solution work?
The first step is to contact your travel agency to request a unique IATA code for your business or organization. This code is useful not only for retrieving invoices but it also improves the management and administration of flights purchased by your company.
Once you have the code, EDICOM’s digital tax document platform will take care of the rest by allowing the:
- Integration of shopping reports: EDICOM’s solution has a search inquiry form that allows you to enter dates and search for tickets acquired during a certain period of time. These dates enable the solution to start the digital tax document retrieval process.
- Transformation of shopping reports: EDICOM’s solution transforms shopping reports into a markup language (XML), which enables it to connect to airline hubs.
- Communication with airline hubs: Communicating with the airline hubs enables this solution to collect all the tickets generated by the company’s airlines. This happens once a request is made to retrieve the tickets.
- Retrieval of digital tax documents: Using the dates in the search inquiry form, the platform detects the digital tax documents and returns a message in response to the request for tickets.
- Integration with an accounting system: Once the digital tax documents are retrieved, the solution transforms them into a language the company’s internal management system can understand.
EDICOM is the leader in the development of electronic invoicing solutions in Europe and America. As the first authorized provider certified to implement electronic invoicing, EDICOM has a powerful technological infrastructure that integrates all the necessary services for issuing and receiving digital tax documents from invoices to payroll management.