As a response to complaints that online government approval of e-invoices was slowing down shipments and supply chain processes, Ecuador recently announced that it is reversing its approval model – now providing a 24-hour buffer for companies to submit e-invoices. As the SRI (Ecuador’s tax authority) begins rolling out this new model, here’s what companies operating in this country need to know.
Who’s affected?
All companies subject to e-invoicing mandates in Ecuador must comply with this new offline requirement. Those currently submitting XML invoices via the online process have until December 31, 2017, to make the move. Those just beginning implementation in Ecuador need to use the new offline schema in lieu of the previous online version.
What changed?
Using the online model, companies had to generate an XML invoice, sign it and then transmit it to the SRI. Once the SRI sent back the approval and 37-digit verification code, companies could send the invoice and ship the goods. Despite only a three-second response time for approvals, many companies felt that this dependence on government approval impeded their ability to meet shipping and order deadlines, ultimately eating away at profits. In an effort to improve this model, the SRI introduced the new offline model, meaning that shipping is no longer dependent on the 37-digit approval number. The verification number will now be the access key – a 49-digit code generated by the business instead of the government – and is now the only authorization companies need to ship. Upon generating the e-invoice and corresponding access code, the company has 24 hours to upload the XML to the SRI’s web portal for approval – allowing suppliers to continue shipping in the meantime.
What’s the impact?
While this new model offers a buffer for high invoicing volume companies (much like Argentina does), it doesn’t change the purpose behind Ecuador’s e-invoicing implementation: to maximize tax revenues and eliminate the exchange of black market goods. The government will still be looking for errors and discrepancies between e-invoices and tax claims, and shipments still must have authorized access keys, making proactive compliance and contingency processes just as important in Ecuador as in countries that don’t offer an offline model.
Contact us for a thorough examination of how Ecuador’s new offline model will affect your company.
