Latin America: An Update on E-Invoice Requirements

Victor Duarte
June 3, 2020

In the field of global e-invoicing and tax control, most eyes have been focused on trailblazing initiatives in Asia, as countries such as India, Vietnam and Thailand look set to introduce new reforms in this area. However, even in the home of mandatory digital tax controls – Latin America – where mandatory clearance of B2B e-invoicing first became the norm, 2020 has so far seen many new initiatives and legal changes. Some are a natural effect of Governments combatting the economic impact of the COVID-19 pandemic through VAT and other taxes, whereas other changes are being executed according to plan.

Let’s look at what’s has been happening in this region:

Adoption of e-invoicing postponed 

In Bolivia, 2020 was supposed to be the year to implement and enforce the rules of the electronic invoicing Resolution (SFE). However, after carrying out a technical analysis and taking into account the country’s current economic situation aggravated by COVID-19, the National Tax Service (SIN) postponed enforcing its Electronic Invoicing System by enacting a new Resolution repealing the previous regulations on this topic.

E-invoicing expansion plans

In May, the Colombian Tax Authority (DIAN) issued Resolution 42, a new regulation setting out the requirements for the issuance, transmission, and validation of electronic invoices. This Order sets conditions to be met by technological providers offering e-invoicing services. The mandatory adoption of electronic invoicing in Colombia will be implemented from June to November 2020, based on the sector in which taxpayers carry out the underlying transactions.

Chile’s government also enacted a reform of the VAT law which established that the issuance of paper tickets for B2C transactions will no longer be accepted. Taxpayers must issue electronic tickets for the supply of goods and services to final consumers. The taxpayers must meet an additional compliance requirement to issue these electronic documents from August 2020; the amount corresponding to the taxes must be recorded separately from the amount of the price of the underlying supply. 

The Dominican Republic is moving forward in developing its e-invoicing system. Earlier this year, the legal framework regulating the issuance of several types of electronic tax documents was successfully adopted. However, the goal of the local tax administration (DGII) is to request taxpayers operating in the country, the mandatory issuance of e-invoices; and, for that purpose, the DGII will publish a phased schedule for the compulsory roll-out.

Ecuador continues to expand the scope of its e-invoicing system. This year, as planned, two groups of taxpayers were added to the mandatory issuance of electronic invoices: 

1) Those who carry out commercialization activity of heavy machinery and road equipment; and, 

2) Individuals or entities carrying out wholesale and retail operations of liquefied gas. 

Following the schedule published by the tax administration (SRI), by 2024, most taxpayers operating in Ecuador will be required to issue electronic invoices.

This year, the Government of Panama enacted a new Decree.  It requires all taxpayers excluded from having to use electronic fiscal machines attached to their POS systems to start issuing e-invoices. This Decree establishes that this requirement will be effective from 1 August 2020. However, the tax administration (DGI) will be able to define specific dates for certain groups of taxpayers to meet this requirement.

In the meantime, El Salvador is paving its way ahead towards the use of electronic invoices. The Ministry of Finance of El Salvador announced that the country will start a pilot program in 2020, with the participation of selected taxpayers operating in the country. The plan is to incorporate into the e-invoice issuance system both small and medium-size enterprises by 2021.  

It is likely that governments across LATAM will continue to take further economic and legal measures that risk having repercussions on invoicing compliance requirements. Taxpayers operating in these countries will have to meet these new requirements despite the difficulties imposed by the COVID-19 pandemic, to maintain their businesses compliantly.

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Author

Victor Duarte

Victor is a Regulatory Counsel at Sovos TrustWeaver. Based in Stockholm and originally from Venezuela, he obtained a Law degree and a specialisation degree in Tax Law in his home country. Victor also earned a Master´s degree in European and Internal Tax Law from Lund University in Sweden.
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