As Mexico attempts to better track the money flowing through its economy – and the taxes owed on said transactions – it recently introduced a new process requiring companies to submit payment receipts. This new mandate, which goes into effect on December 1, 2017, will affect both IT and business teams, yet is not supported by standard SAP functionality.
This new requirement addresses several visibility gaps that the SAT, Mexico’s tax authority, was experiencing as a result of CFDI electronic invoice submissions. For example, the SAT was previously unable to track partial payments. Now, there will be a direct relationship between invoices and payments received. There were also scenarios in which taxpayers were requesting VAT credits on the invoices without VAT, creating discrepancies in the taxes collected by the SAT. Now, the SAT will be able to ensure that they collect the accurate VAT owed once payment is received and ensure that deductions only apply to paid transactions. Other discrepancies emerged when invoices were canceled by a supplier after a payment had been sent by the client. This new requirement – complemento de pagos – will help the SAT avoid all of these issues.
For companies operating in Mexico, complemento de pagos equates to several new processes – none of which are capable in SAP without leveraging Invoiceware by Sovos. Never have companies had to report to the government when payments are received – until now. In the event of partial payments, which are very common, suppliers must create one invoice for the total amount, and then a separate complemento de pago for each individual payment received by the client. Every complemento de pago must be linked to the original invoice – this is the mechanism that will allow the SAT to track all the payments to a specific invoice. The complemento de pagos must be made available to customers to validate their monthly VAT claims. Additionally, this new requirement means that suppliers can no longer cancel invoices if a payment has been received. Adjustments must be made via credit or debit note instead. All-in-all, this payment receipt documentation includes 32 fields, including payment type and payment method, that must be accounted for with each transaction and reported to the SAT.
However, the payment receipt process does benefit companies – not just the SAT – by providing real-time visibility into invoices paid and pending. It also allows for improved process automation on accounts receivable – automatically populating remaining balances in the event of partial payments and eliminating the consolidation of invoices paid. These efficiencies ultimately improve accuracy and reduce audit risk.
Despite the importance of this new initiative, SAP recently announced that it would not be delivering functionality for payment receipts, even though this is a completely new business process in Mexico, requiring a new SAP module to extract the necessary information. Failing to comply can lead to fines and penalties by the SAT and business interruptions. Invoiceware by Sovos offers the only end-to-end solution for CFDI v3.3 and payment receipts that allows companies to maintain a centralized source of truth in SAP.
To learn more, watch our on-demand webinar, Mexico SAT: Lessons Learned from Complemento de Pagos & CFDI 3.3, where we discuss the major implementation challenges and the audit defense benefits of this new reporting requirement in Mexico.