Starting January 2018, all taxpayers in Ecuador will be required to start invoicing under Ecuador’s new offline schema. Announced by the SRI, Ecuador’s tax authority, in 2015, this new e-invoicing model presents both benefits and challenges to companies operating in Ecuador. On one hand, this new process will give companies a slight buffer for compliance, but it also necessities new processes and continues the zero error tolerance that Latin America is known for.
Currently, this new offline e-invoicing schema is available to taxpayers in Ecuador via the certification environment so that companies can test and adjust their compliance processes. Once the testing period is completed, the SRI will publish the production environment. Until December 31, 2017, both the current “online” model and new offline schema are enabled, allowing taxpayers to gradually migrate their e-invoicing compliance efforts.
What are the major changes companies in Ecuador can expect under the new schema?
- Process: Suppliers will have 24 hours to send an invoice to their customers and will be required to submit the invoice to the SRI simultaneously. Instead lieu of using a government verification code to be able to ship goods, companies will create their own 49-digit access key under the model. This key enables the government to track the invoice and allows suppliers to ship. Once that code is generated, companies have no more than 24 hours to submit the XML e-invoice to the SRI and buyer. Previously, companies had to submit invoices to the SRI prior to issuing them to buyers. However, this process change still necessitates real-time, proactive compliance, as any delays or errors still carry significant risks.
- Corrections: If the electronic invoice is not authorized by the SRI, the supplier is obligated to make necessary corrections within 24 hours without changing the access key. The corrected invoice must then be resubmitted to the SRI and the buyer. This short window for corrections requires a high level of responsiveness by accounts receivable teams, as delays will result in fines.
- Web services: With the new offline schema, there will be new web services for the testing and production environments, meaning that companies need to act now to ensure their processes and systems accurately and efficiently submit the required information to the SRI. Once this new process goes live, it will be too late to avoid the penalties associated with such technical errors.
- Authorization response structure: In the offline schema, the access and authorization numbers are the same 49 digit sequence. Because companies, not the government, will now be responsible for generating this number, it’s critical that processes are in place to avoid duplication, typos and discrepancies, which will trigger correction notices and/or penalties from the SRI.
Watch our on-demand webinar for an in-depth analysis of the challenges associated with Ecuador’s new e-invoicing model, and contact us to discuss how the offline model will affect your organization.