For 2014, Latin America has announced new tax and electronic invoicing policies which will divert IT funding and staff away from strategic initiatives while exposing multinationals to potential operational shut downs and severe financial penalties. If you are running a single SAP global instance or you are implementing SAP ERP in Brazil, Mexico, Chile or Argentina – the governments just threw you a curve ball.
How are you managing the mandates?
- Brazil Nota Fiscal version 3.1 is mandated for December 2014 for all organizations. The issue I see already is that there is no awareness of the potential scope required to update GRC: initial SAP releases point to the upgrades affecting SAP core. This means you have to budget the regression testing of all countries on the SAP instance. By the way, this is on top of the mandates for transportation CTe that need to be validated by the buyer as of December 2013, eSocial that goes into effect June 2014, FCI compliance that went into effect in October, and MDF-e an additional document to the CTe that will need to be validated in the middle of 2014.
- Mexico goes live with the CFDI v3.2 mandate in January 1, 2014. Have you budgeted the impact on your business for the Account Payables effect? With more than 500,000 companies switching over to the new process, you should expect at least 10-15% of your initial inbound supplier invoices to have potential issues. From a tax perspective, this means you cannot deduct the VAT tax on those invoices which would raise your tax remittances to the government in 2014 – a huge audit risk that is often overlooked.
- Chile announced that they are finalizing legislation to mandate electronic invoicing in 2014 for large enterprises. Do you fall under this category? Are you prepared and budgeted for Chile DTE (there are upwards of 10 document types, folio management, and Libros reports)
- Argentina announced on October 31stthat they are mandating the switch for many tax regimes to the web services that demand details. “With details” invoices require the line item information, not just the header information. The majority of companies are expected to upgrade by the end of 2013. Are you one of them?
These issues have an effect on your SAP support team and your SAP change management budget. Now is the time to understand the legislation and implement a solution that takes this constant chaos and turns it into a fixed, predictable cost. If you are currently managing all of these requirements in-house, close your eyes and imagine a managed service that supports the SAP issues so your team is not having to constantly update your global SAP instance with OSS notes, that supports all the government changes, supports all the day to day issues caused by these changes, and more importantly allows you to focus on growing your business, not just maintaining the status quo because the governments change.
That feeling of nausea you experienced when you learned of all the 2014 changes happening in Latin America can easily be replace by a feeling of relief and confidence knowing you are working with a partner who can help you through ALL of these changes. I would be happy to introduce you to many companies feeling quite good about their 2014 readiness for LATAM compliance changes.
