Costa Rica Electronic Invoicing Mandate Has Businesses Hurrying to Find Service Providers

Gustavo Jiménez
June 20, 2018

Costa Rica is one of the latest countries in Latin America to embrace electronic invoicing, and many companies doing business in the country are under pressure to find a service provider to help them comply with the country’s eInvoicing mandate. Manufactures and retailers are set to fall under the mandate in the next few months.

Costa Rica has been rolling out its eInvoicing mandate to businesses by category since the beginning of 2018. Many businesses in the country are already subject to the mandate, and those that aren’t yet will have to comply by the end of October as the country moves to establishing deadlines by tax ID number.

The eInvoicing requirement began rolling out in January, with deadlines for compliance depending on a company’s industry. Most services-based companies doing business in Costa Rica had compliance deadlines of May 1, 2018, or before, but other businesses still have until the fall to comply.

Specifically, remaining companies with tax ID numbers ending in 1, 2, or 3 have a deadline of Sept. 1; companies with tax ID numbers ending in 4, 5 or 6 have a deadline of Oct. 1; and companies with tax ID numbers ending in 0, 7, 8 or 9 have a Nov. 1 deadline.

Electronic invoicing for manufacturers and retailers

The eInvoicing mandate requires companies with operations in Costa Rica to issue electronic invoices either by using a software provider or by using the software provided by the tax administration. Generally, companies that issue large numbers of invoices daily will need to use a software provider that can automate the process, as the tax administration software is only available for smaller businesses that issue fewer invoices and don’t need automation.

With the government set to issue large fines and penalties for invoices that are reported incomplete, companies doing business in Costa Rica have strong motivation to comply. The government can even shut a business down in extreme cases of non-compliance.

Preparing for the eInvoicing mandate

In order to prepare for the mandate, manufactures and retailers need to do what many service providers have already done: find a reliable software provider, such as Sovos, which has experience implementing eInvoicing in the most complex markets, such as Brazil, Mexico and the rest of Latin America.

The provider needs to be able to, at the very least, meet the minimum requirements of eInvoicing for the country. That means having the ability generate XML in the standard format required by the government, and also signing the invoice, sending it to the government for approval and archiving it for a period of at least five years.

Other requirements include an extensive list of regulations related to language and the content of the invoice itself. Beyond that, the right eInvoicing vendor will offer a solution that’s flexible and efficient.

Complexity of eInvoicing in Latin America

In addition, one of the most complex things to deal with regarding eInvoicing in any region, including Costa Rica, is constant change in regulations. Costa Rica is just beginning to implement the basic modules of an eInvoicing mandate and will expand by adding elements such as transportation and inbound eAccounting. The mandate, then, will become more complex.

In any case, two regulatory changes at a minimum per year is standard in most eInvoicing jurisdictions. Companies need to partner with a software provider that will be be there when the law changes and automate the process of implementing changes in regulatory policy.

Sovos is a pioneer in providing eInvoicing services to Latin America and Europe as governments continue to mandate eInvoicing as a way to maximize tax collections. Manufacturers and retailers that need an eInvoicing service provider can turn to Sovos for solutions that will enable them to meet mandates in Costa Rica as well as around the world.

Take Action

Discover more about Sovos eInvoicing solutions or contact Sovos for more information.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Gustavo Jiménez

Gustavo Jimenez is the Product Marketing Manager for Sovos’ e-invoicing solutions and is based in Atlanta. Gustavo is responsible for go-to-market strategy for Sovos LatAm e-invoicing solutions in countries with existing and upcoming mandates. He has more than five years of experience in e-invoicing, middleware integrations, and regulatory research. He works closely with the product management and development team as well as sales and marketing to facilitate compliance process transformations for Sovos clients. Prior to joining Sovos, Gustavo was responsible for marketing activities and strategy at Invoiceware International, a leading e-invoicing solution for businesses with operations in Latin America. He focused on the go-to-market strategy of their solutions as well as communications with the LatAm market about regulatory changes and new solutions.
Share this post

North America Tax Information Reporting
March 22, 2024
Market Conduct Annual Statement Reminders and More

On the second Wednesday of each month, Sovos experts host a 30-minute webinar, Water Cooler Wednesday, to share the latest updates on statutory filings. In March, Sarah Stubbs shared information about the many filings due after March 1, from Market Conduct Annual Statements to health supplements for P&C and life insurers writing A&H businesses and […]

North America ShipCompliant
March 21, 2024
How Producers Can Build a DtC Shipping Market

Direct-to-consumer (DtC) shipping has become one of the leading sales models for businesses of all sizes and in all markets. The idea of connecting directly with consumers is notably attractive, as it helps brands develop a personal relationship and avoid costly distribution chains. Yet, for all its popularity, DtC is often a hard concept to […]

North America ShipCompliant
March 20, 2024
Key Findings from the 2024 DtC Beer Shipping Report

This March, Sovos ShipCompliant released the fourth annual Direct-to-Consumer Beer Shipping Report in partnership with the Brewers Association. The DtC beer shipping report features exclusive insights on the regulatory state of the direct-to-consumer (DtC) channel, Brewers Association’s perspective and key data from a consumer preferences survey. Let’s take a deeper dive into some of the […]

March 20, 2024
As the World Gets Smaller, Think Bigger About Global Tax Compliance

For the past few weeks back, my colleagues and I have been talking a lot about the importance of a global strategy when it comes to addressing today’s modern tax environments. On the heels of Sovos introducing the Sovos Compliance Cloud, many in our company’s leadership team have blogged about related topics and the critical […]

North America ShipCompliant
March 12, 2024
Florida HR 583 Set to Uncork Larger Format Wine Bottles

Florida wine lovers could soon enjoy a bigger selection of bottles based on a recent bill passed by the state’s legislature (HR 583) that would remove the existing cap on wine bottle sizes. What is Florida’s HR 583 bill? Currently, Florida law prohibits the sale of wine in bottles larger than one gallon (a little […]