The governments and tax administrations of South and Central America were among the first in the world to adopt ambitious programmes that mandate the use of e-invoicing based on ‘clearance’ and structured data files. Over the past ten years, we’ve seen them leapfrog the time-honored concepts of paper-based, post-audit processes to put in place entirely new control infrastructures made mandatory through national legislation.
One of these countries, Guatemala, introduced its e-invoicing framework back in 2007 when its tax administration, the Superintendency of Tax Administration or SAT, issued the directive: Acuerdo de Directorio Número 24 (2007).
The Old FACE Framework
The system introduced, commonly referred to as FACE 1, established the foundation for how taxpayers issued electronic invoices.
This early e-invoicing mandate included the obligation to fulfill certain legal requirements, including:
- The taxpayer had to contract and use the services of an approved agent called ‘Generador de Facturas Electrónicas’ (Electronic Invoices Generator), or GFACE for short, who could generate outbound invoices and validate inbound invoices. GFACE’s were also under the legal obligation of providing the tax authority with connectivity to their systems, thereby enabling control of taxpayer transactions.
- The taxpayers had to obtain the classification of ‘Emisor de Facturas Electrónicas’ (Issuer of Electronic Invoices) or EFACE. This process included the designation of a GFACE to be used in the issuance of electronic invoices.
- All invoices had to be issued through a GFACE agent and obtain prior authorization from the tax authority before being sent to a buyer (known as a clearance model).
In 2016, the Guatemalan tax authority updated the FACE1 framework to FACE2, this update included modernizing the standards and making it mandatory:
- To use XML as the legal invoice format.
- For GFACE agents to use advanced electronic signatures as proof of their validation/authorization of the invoice.
- To deliver the XML with an e-signature to the tax authority within 24 hours.
Last month (May 2018), the SAT in Guatemala issued the Acuerdo de Directorio Número 13 (2018) and introduced a new framework, known as the FEL model.
The New FEL Framework
The updated framework supersedes the FACE2 model and is intended to fully replace the old FACE framework. The roll-out of the mandate and the migration to FEL will be carried out through notifications sent by the tax authority directly to taxpayers. However, if they so wish to, taxpayers may also voluntarily migrate to the new framework.
The new framework put back on taxpayers some of the obligations performed by the GFACE agent as it mandates taxpayers to issue electronic invoices in XML format with the mandatory use of a digital signature based on a certificate issued by the tax authority to the taxpayer. While in the old model, taxpayers were mandated to use the services of a GFACE agent who would generate the invoice, now taxpayers must use the services of a Certifier. The role of a Certifier is only to validate that the taxpayer has complied with the legal and technical requirements, but in doing so, the Certifier will also authorize the invoice by assigning a unique identification number and will add its own qualified electronic signature.
The Certifier is also responsible for delivering the invoice to the supplier and to SAT, where a second validation will occur and the invoice will be authorized or rejected. This status is communicated by SAT issuing a message towards the Certifier. Only after an invoice is authorized by SAT will it be considered a legally valid tax document.
Taxpayers are obliged to archive the authorized documents through the mandatory retention period of 4 years counted from the moment in which the payment of the tax is due and the Certifier will also be obliged to archive the certified invoices until the tax authority renews their accreditation as such.
The introduction of the FEL framework is intended to modernize and streamline the tax procedures within Guatemala. For the latest news on e-invoicing and e-archiving compliance or for updates from our global team of legal experts, follow Sovos on Linkedin.