Blog

Hidden USMCA Compliance Pitfalls for American Companies in Mexico

As part of the recently updated “new NAFTA,” or USMCA, Mexico is enticing companies to move operations into its maquiladora zone of factories along the US border. Major benefits of relocation include exemptions from value-added tax (VAT) and other taxes for qualifying manufacturers, along with a VAT rate reduced by half applied to local transactions […]

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“Trends” Report Excerpt: The Consequences of VAT Non-Compliance

The following is an excerpt from “Trends in Continuous Global VAT Compliance,” the 11th edition of the industry’s most comprehensive guide to e-invoicing, e-archiving and VAT reporting. The full report is available for download.  To reduce the VAT gap, countries are pushing taxable organizations to comply with VAT requirements and enforcing different types of legal […]

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Mexican Tax Reform Introduces Anti-Abuse Rule

Mexico is introducing a tax reform to be enforced on 1 January 2020, implementing a general anti-abuse rule.  Its aim is to increase governmental control over the transactions carried out by taxpayers. To counter abuse of tax law, the anti-abuse rule will allow tax authorities to adjust the nature of the operations reported and, consequently, […]

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New Global VAT Compliance Report Provides Guidance for Multinationals

Companies are dealing with a fundamental shift in the way they do business with trading partners. In a rapidly increasing number of countries, there’s a third party inserting itself into every transaction. It’s the government, and it’s wedging its way into every order a company ships or receives.  In an effort to close a massive […]

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Extension of Mexican E-invoicing Mandate Puts New Pressure on Maquiladoras

A new wrinkle in Mexican electronic invoicing adds complexity to the e-invoicing process for maquiladoras, or foreign-owned factories operating along the US-Mexico border.  Compared to some other countries in Latin America, Mexico has kept its core electronic invoice, the CFDI, relatively simple. Whereas an invoice in Chile has 250 fields or more of required information, […]

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Why Clearance E-invoicing Is Both Inevitable and Positive for Businesses

Clearance-model e-invoicing will sweep the globe because it works – at least for tax administrations. With the VAT gap opening to more than half a trillion dollars worldwide, governments around the world are likely to follow the Latin American model of tax authorities inserting themselves into transactions. A new report from Bruno Koch at industry […]

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E-invoicing: Optimization Strategies to Withstand the Digital Tax Tsunami

The great corporate awakening Many corporations that previously saw e-invoicing mandates as a developing country problem are now realizing that invasive transaction-based digital tax controls are popping up everywhere around the world. Teams of experts and executives across finance, IT, tax and other functions are being pulled together by leading enterprises to define ways to […]

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SAP Central Finance Migration: Tax Compliance Spells Trouble

SAP S/4HANA is the promised land for SAP customers: an entire suite of ERP functionality in one place with a single data store. The ability to run all ERP capabilities, both from SAP and non-SAP systems, from a single source represents delivery of a model IT professionals and SAP administrators have sought for years. Getting […]

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Marketplace Facilitator Tax Collection Responsibilities in Latin America

Marketplace Facilitators and Payment Processors Find Themselves in the Global Tax Compliance Crosshairs – Part II As we discussed in part I, “Marketplace Facilitators and Payment Processors – The New Taxpayers?” an indirect tax trend the past several years is an effort to expand the number of types of businesses responsible for collecting tax, such […]

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Why Compliance in Mexico Is Especially Important for Maquiladoras

Mexico has overhauled its e-invoicing requirements in recent years, and while businesses of all kinds have had to adapt, keeping up with changes is particularly important for maquiladoras. Maquiladoras are manufacturers, often with factories near the border with the US, which have a special designation from the Mexican government that allows them to import materials […]

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Por qué es importante el nuevo proceso de cancelación de facturas electrónicas en México

Los cambios relacionados con el nuevo proceso que permite anular facturas electrónicas en México no son triviales, ya que repercuten de manera importante tanto en las operaciones de las AP (cuentas por pagar), como en las AR (cuentas por cobrar). El nuevo mandato, que pretende llenar el gran vacío que hasta ahora existía en la […]

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Why the New Process for Cancelling E-Invoices in Mexico Matters

The changes involved in the new process for cancelling electronic invoices in Mexico are not trivial. There are major ramifications for both accounts payable (AP) and accounts receivable (AR) operations. The new mandate, which fixes a major gap in Mexico’s e-invoicing policy, is aimed at enabling the SAT, the Mexican tax authority, to recover money […]

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November 1 2018: The Debut Day of the New CFDI Cancelation Process in Mexico has Finally Arrived. Are you Ready?

As previously announced by Sovos and after several delays in the implementation of the new CFDI cancelation process, the final deadline has arrived. The Mexican tax authority (SAT) has kept its commitment to not delay the implementation of the new CFDI cancelation process, as advised in their press release. These changes are designed to eliminate […]

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Mexico in the Digital Age: 7 VAT Compliance Measures to Know

Governments have rapidly adopted digital models to better collect every type of transactional tax, including value-added tax (VAT), goods and services tax (GST), and sales and use tax. The SAT (Mexico’s tax authority) is no different. Interestingly, Mexico has been a trailblazer in the digitization of tax, adopting new digital models and processes to ensure […]

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Mexico Postpones the New CFDI Cancellation Process until November 2018

During 2017, Mexico made several changes to its eInvoicing framework. In addition to the implementation of CFDI version 3.3, modifications have been made to article 29 A of the Tax Code designed to stop the practice of suppliers unilaterally cancelling CFDIs. This process is being replaced with a bilateral process in which the buyer must […]

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Mexico Postpones Electronic Invoice Cancellation Policy Change until September

Mexico’s planned process change for cancellations of electronic invoices will take effect Sept. 1 rather than in July as previously announced. The Mexican tax authority, the SAT, will require senders of electronic invoices, a document called a CDFI in Mexico, to get permission for cancellation from the party that received the invoice before the sender […]

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How to Reduce Risk and Protect Revenue In Mexico with the Digitization of Tax Administration

Invoicing in Latin America has become complex to the point of being daunting. Businesses that get electronic invoicing processes wrong could quickly grind to a halt. Mastering the eInvoicing process is critical, then, and it involves making sure that all four elements of eInvoicing are working smoothly at the same time. New regulations, most notably […]

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México lanza nuevos requisitos de contabilidad electrónica

Tras anunciar a fines de 2016 el mayor cambio en su esquema de facturación electrónica en años, México también anunció una importante actualización de su mandato de contabilidad electrónica en enero de 2017. A pesar de que el SAT, la autoridad fiscal mexicana, no anunció un cronograma específico de implementación de eContabilidad 1.3, tomó a […]

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