VAT compliance in Chile can be more resource-heavy than in other countries, largely because of the different tax initiatives and mandates in play.
Keeping on top of your requirements—especially as rules change over time—takes a lot of work, especially if you’re a multi-national organization. That’s where this page can help, providing an overview of the different elements that can play into Chile VAT compliance.
Businesses are not currently obligated to send and receive invoices electronically when dealing with other businesses. However, as per the amendment to the Law on Accounting, a mandate is on the way.
While mandatory B2B e-invoicing will not take effect until 1 January 2028, businesses can submit B2B e-invoices to the eAddress system voluntarily starting from 30 March 2026. If they choose to issue e-invoices, the issuer must ensure the integrity of the content and the authenticity of the origin by, for example, using an electronic signature.
A B2B e-invoicing mandate has been in development for years and has been subject to several postponements. Most recently, in June 2025, the commencement date of the obligation was delayed from 1 January 2026 to 1 January 2028.
VAT rules in Chile
Tax in Chile requires knowledge of several mandates. With regards to VAT, this tax is levied on the sales of movable and immovable tangible property, provision of services and imports. Exports are exempt.
Failing to comply can lead to costly penalties and even imprisonment, so ensure you keep current on what affects your business.
Chile e-invoicing
Chile is a leader in electronic invoicing, starting its journey in 2001 through a voluntary scheme. There is now a mandate that dictates that all taxpayers in the country must issue and receive e-invoices or e- receipts in B2C transactions.
The nation’s e-invoicing scheme has strict rules and regulations. Find out more with our dedicated Chile E-invoicing page.
Requirements to register for VAT in Chile
To register for VAT in Chile, businesses must register and obtain their RUT (Rol Unico Tributario). To carry out this procedure, Chilean residents must have their tax code or digital certificate issued by the SII.
There is no VAT threshold in Chile for non-resident organisations. As a result, they are required to register for VAT when making their first taxable supply. Taxable supplies include movable and immovable goods, services, imports, intangibles relating to industrial properties and digital services.
Should an organisation qualify for VAT registration in Chile, it will need to follow this process:
Request registration and obtain a RUT through www.sii.cl
Submit an Affidavit of Commencement of Activities within 2 months of the start of activities. The procedure can be online or in person through Form 4415.
Cross-border digital purchases and services
Since August 1, 2025, non-resident platforms and digital businesses can register in the simplified system of the SII, which does not require domicile in Chile and allows them to declare and pay VAT on a monthly or quarterly basis.
From October 2025 VAT will be applied to all purchases made from Chile whose total value (including shipping costs) does not exceed 500 dollars. The tax will be calculated and withheld by the non-resident platform or digital business itself at the time of purchase, as long as they are registered in the special registry enabled by the Internal Revenue Service (SII).
Invoicing requirements in Chile
Chile was an early adopter of electronic invoicing, starting back in 2001 with a voluntary scheme for taxpayers. Since 2018, both B2B and B2G transactions require taxpayers to issue and receive e-invoices.
Electronic invoices in Chile must be sealed with an e-signature and securely archived for at least six years. There are several electronic documents that businesses must be aware of when operating in Chile, including sales e-invoices and purchase e-invoices.
Chile has penalties in place for those who fail to comply with the country’s tax regulations.
If taxpayers file a tax return late, they can expect to be penalised by paying a fee of 10% of the due taxes. If they are late for five months, the penalty increases by 2% for every month—up to 30% of the tax amount.
Late tax payments will be penalised by paying an interest fee of 1.5% of the tax amount per month. Taxpayers will also be penalised for filing incorrect returns; when the tax declared is less than the final assessed amount, the penalty may range between 5% and 20% of the difference between the two amounts.
Tax evasion produces a more significant penalty. Taxpayers attempting to evade paying tax may be fined anywhere from 50% to 300% of the tax amount, plus they could be imprisoned for up to five years. Tax fraud may result in imprisonment for up to 10 years and a fine of 100% to 300% of the fraudulent tax return amount.
Solutions for VAT compliance in Chile
Chile’s tax obligations can take up significant resources, reducing the time and energy your team has to dedicate on internal matters. Rules and regulations change frequently too, especially when operating in other countries in addition to Chile.
Sovos pairs global solutions with local experience to aid you in compliance wherever you do business. This allows you to focus on what truly matters. Speak with our expert team to get started.
VAT may be withheld by the Withholding Agents designated by the SII from taxpayers subject to withholding, mainly for non-compliance with their tax obligations.
Exporters that are exempt from VAT, on sales made abroad, can recover the VAT on purchases – either by requesting a refund the following month, or via a special mechanism that involves the acquisition of fixed assets.
In Chile, all natural or legal persons subject to taxes must be registered in the Single Tax Roll (RUT). This number is a numerical series that identifies people and allows them to be part of Chile’s economic activity and make use of various services.
Electronic invoicing in Ecuador, also known as Facturación electrónica, is mandated for established taxpayers. Like many Latin American countries, Ecuador was early in recognising e-invoices legally. However, the mandate for the document’s use only came into effect in 2014.
Ecuador has updated its regulation since mandating electronic invoicing. That’s why it’s important to stay up to date with the latest regulatory requirements, and this page is the perfect tool for doing so. Bookmark this page to stay up to date with the latest developments.
Ecuador originally implemented an “online” real-time invoicing system, where invoices and related documents had to be pre-validated by the tax administration before being issued and sent to customers.
Subsequently, in 2018, the system was switched to an offline validation method in which invoices are sent concomitantly to the SRI and customers without needing the SRI to pre-validate them.
Put simply, the offline e-invoicing process in Ecuador typically looks like the following:
An electronic invoice in XML format is generated and signed through the issuer’s platform
The e-invoice is sent to the SRI for authorisation and validation and, at the same time, may be sent to the recipient.
The RIDE (graphical printed representation) contains the access code and authorisation number (49 digits)
Characteristics of electronic invoicing in Ecuador
Ecuador B2B e-invoicing
B2B e-invoicing in Ecuador became applicable to all established taxpayers in November 2022 when the country increased the obligation to include the remaining 2,000,000 natural persons and companies.
All established taxpayers must issue e-invoices when conducting business in Ecuador, and the tax authorities must validate all electronic invoices.
E-invoicing is required for all domestic B2B transactions and exports for cross-border transactions.
Ecuador B2G e-invoicing
As with B2B transactions, taxpayers must issue electronic invoices when conducting business with the public sector. B2G transactions must have an e-invoice that is digitally signed, validated, sent electronically and securely archived.
Factoring and electronic invoicing
Using commercial invoices within the factoring system is not new in Ecuador. It has been contemplated for many decades within the country’s commercial code.
However, with the implementation of e-invoicing, provisions were established regarding the issuance, validation, processing and receipt of negotiable commercial electronic invoices. This subtype of electronic invoice must meet specific requirements to be processed and validated by the SRI.
The tax authority has established specific formats for the issuance and validation of such invoices, which must be approved or rejected by the recipients, that are secure for all corresponding legal purposes. In this regard, the SRI issued several manuals aimed at explaining the procedure for sending, validating, accepting, or rejecting such invoices.
Types of electronic receipts in Ecuador
Ecuador’s e-invoicing mandate covers the following electronic documents:
Electronic invoice: The electronic invoice is a form of issuing sales invoices that meets the legal and regulatory requirements for authorisation by the SRI.
Settlement of purchase of goods and provision of services: These documents must be issued and delivered by the taxpayers for certain acquisitions established in the Ecuadorian legal framework.
Credit and debit notes: These documents allow taxable persons to amend or modify valid invoices issued previously.
Withholding vouchers: This type of voucher indicates tax withholdings made by withholding agents authorised by local legislation.
Referral guide: These documents support the transfer of goods within the national territory, so all transport must carry them.
Format of electronic invoices and documents in Ecuador
E-invoices in Ecuador must be in XML format, according to the XSD schemes available on SIR’s web portal. They must include information such as:
Invoice number
Name and address of both issuer and recipient
Description and quantity of goods and/or services
Net, VAT and gross values
Applicable VAT rate
Electronic invoices must be secured with a digital certificate and an electronic signature. This validates that the document’s contents have not been tampered with once they are issued.
Alongside the e-invoice, both a unique access code (comprised of 49 numeric digits) and a graphical, printed representation of the document must be issued.
Participants in the e-invoicing process in Ecuador
Electronic biller
The taxpayer who issues vouchers electronically. The electronic invoicer may use its own system or a commercial system to generate invoices and other electronic vouchers.
Receiver
The consumer of goods and/or services to whom a CPE is issued and who, as such, must receive it in their capacity as a consumer. Acknowledgement of receipt is not required.
SRI
Ecuador’s internal income service is the only entity that validates electronic vouchers in the country.
Timeline of e-invoicing in Ecuador
There have been plenty of developments with Ecuador’s e-invoicing journey over the years.
May 2013: A resolution is published that establishes the mandatory schedule of electronic billing
November 2017: A resolution is published regarding the mandatory use of electronic receipts
June 2018: The Resolution which dictates the rules for the electronic transmission of information on sales receipts, withholding and complementary documents through tax printers is modified
November 2021: A law published in the Official Gazette states applicable taxpayers must be incorporated into the e-invoicing system within a year
November 2022: E-invoicing applies to all established taxpayers
May 2023: SRI published updates to its guide for cancelling electronic receipts
Penalties: What happens if I don’t comply with e-invoicing in Ecuador?
In Ecuador, there are penalties for not meeting the requirements laid out in the country’s e-invoicing regulation. For example, a fine ranging from USD $30-1,500 may be issued for each invoice a seller fails to issue.
What else do I need for VAT compliance in Ecuador?
There are numerous mandates taxpayers must consider when conducting business in the country. VAT compliance alone, especially when operating both domestically and internationally, can be a demanding and resource-heavy task.
Our dedicated page can help with VAT compliance in Ecuador.
The validity query of electronic receipts can be made by entering the www.sri.gob.ec/ SRI Online portal in the public inquiries section enter the option Validity of Electronic Receipts.
The withholding agents will mandatorily issue the withholding voucher when the payment is made. It will be available for delivery to the supplier within five business days following the presentation of the proof of sale.
Setting up e-invoicing in Ecuador with Sovos
With electronic invoicing becoming more common globally, following the lead of Latin American countries like Ecuador, it is important that you prioritise compliance.
The global – yet fragmented – adoption of e-invoicing solidifies the need to choose a single vendor for complete compliance, wherever you do business. Sovos is a tax compliance partner you can trust.
Focus on what truly matters: speak with a member of our team today to begin reclaiming your time.
Complete the form below to speak with one of our e-invoicing experts
Chile has long been a leader in adopting electronic invoicing, starting in 2001 with voluntary adoption for taxpayers.
Its status as a pioneering country with e-invoicing is reflected by the fact that all taxpayers in the nation must issue and receive electronic invoices – one type of Electronic Tax Document (DTE).
This page has all the vital information you need to understand Chile’s e-invoicing regime and how to ensure compliance. Bookmark this overview to stay updated on any future regulatory updates.
The current legislation requires companies to send all DTEs to the SII, Chile’s tax authority, in real time, after which they will inform the taxpayer about their acceptance. In some cases, the SII's authorisation must precede the document's sending to the client. This is the case for dispatch guides not accompanied by electronic invoices.
Contingency
Mandatory for all DTEs that are sent to the SII for validation. However, the SII accepts that such documents continue to be issued when such a referral is not possible. In such cases, a contingency system has been established that will allow the SII to refer and validate these.
Synchronous process
All local or export invoices, or debit or credit notes, must be declared to – and validated by - the tax administration.
File retention
All documents must be retained for six years due to the provisions of the Chilean Tax Code.
Acknowledgement of receipt
In principle, recipients of electronic invoices must generate an acknowledgement of receipt for the invoices they receive. However, current legislation establishes that it will be considered formally accepted after a period of eight days from the receipt of an invoice.
Factoring operations
One of the most important changes introduced by the 30-Day Payment Law was the incentive for factoring operations with electronic invoices issued by taxpayers within the Internal Revenue Service billing system. The electronic invoice thus becomes a negotiable instrument for suppliers, who can sell such invoices on the market as if it were another security. This has resulted in the recipients of such invoices carefully monitoring the changes generated in the ownership of the invoices they have received.
Characteristics of electronic invoicing in Chile
Chile B2B e-invoicing
Chile mandates that every established company must issue and receive electronic invoices.
While the country’s journey with e-invoicing started in the early 2000s, it wasn’t until 2018 when it became mandatory for businesses of all shapes and sizes.
Businesses must follow many rules and requirements to be compliant with Chile’s B2B e-invoicing mandate. These include using an electronic signature, securely archiving e-invoices for six years, meeting the strict administrative procedure and more.
Chile B2G e-invoicing
As with B2B transactions, Chile requires B2G transactions to be documented and processed through electronic invoices. All organisations must issue and receive e-invoices when dealing with governmental and public administration entities.
B2G transactions have the same stringent requirements as B2B and B2C transactions where security is involved. These standards ensure that documents cannot be tampered with and are approved as authentic and accurate by the SII.
Types of electronic documents in Chile
Chile has requirements for other electronic documents beyond e-invoices. Regulations include other e-documents related to buying and selling goods that taxpayers should be aware of, such as:
Sales invoice: Required in B2B transactions and generators of tax credit.
Purchase invoice: For B2B purchases in which the buyer assumes the obligation to issue the invoice.
Dispatch guide: Mandatory document that authorises the transport of goods sold.
Sales and services ticket: Mandatory in cases of B2C sales. They don’t generate tax credit.
Invoice settlement: Issued by the commission agent to the client to invoice his commission and the registration of the payment to the principal.
Debit and credit note: They apply in all the above cases except for the dispatch guides.
Format of electronic invoices and documents in Chile
There are some common elements of electronic documents (DTE), such as e-invoices, used in Chile – including:
Header: Used to identify the sender, the receiver and the total amount, among other data.
Detail by item: Data on each item sold, such as weight, value and quantity.
Discounts and surcharges: Identifies the total discounts or surcharges.
Reference information: Identifies the documents associated with the issuer.
Commissions and other charges: Mandatory field for invoice settlements.
Electronic stamp of the SII: Electronic signatures on the fields defined as representative of the document, including the Folios Authorization Code provided by the SII.
Electronic signature: Verifies the integrity of the DTE’s content. E-signatures must use a digital certificate granted by an SII-accredited certification company.
Timeline of e-invoicing in Chile
A mandate as significant as Chile’s e-invoicing ruling takes time to develop and implement. Here are the key dates of its development:
2001: E-invoicing is implemented as a voluntary scheme for taxpayers
2014: VAT e-invoicing is made mandatory for established organisations
March 2018: B2B e-invoicing is made mandatory for established organisations
March 2021: B2C e-invoicing is made mandatory for established taxpayers
Penalties: What happens if I don’t comply with e-invoicing in Chile?
Chile has penalties in place for taxpayers who do not comply with the mandate’s requirements, including a fine of 50-500% of the amount of the operation.
The aforementioned fine applies to:
Failing to issue delivery guides for invoices, debit notes, credit notes, receipts
Using unauthorised receipts, invoices, debit notes, credit notes, delivery guides
The former will also result in the physical location where the violation was committed being closed for up to 20 days. Repeated violations of this kind within three years may result in imprisonment.
What else do I need for VAT compliance in Chile?
There are other obligations established taxpayers in Chile need to meet, including general VAT compliance. Not meeting what’s required by tax authorities and governments can be costly, and that applies in Chile – so be sure you know what is expected of your organisation through our overviews.
These requirements can become even more demanding when considering your business’ obligations in other countries. That’s why Sovos is your ideal compliance partner.
An e-invoice can be cancelled in Chile if the cancellation is issued in the same tax period. An electronic credit note containing a field that indicates the annulment must be generated.
In Chile, electronic tax documents (DTE) is a general name for digital documents related to buying and selling goods and services. Electronic invoices are the most prevalent type of DTE in the country.
In Chile, electronic invoices must be secured with an electronic signature – technology that validates the integrity of the document and its content. They must also be cleared via the SII before being sent to the buyer.
If the recipient of an electronic invoice does not generate an acknowledgement of receipt within eight days of receiving the document, it will be considered as formally accepted.
Customers have eight days to respond to an e-invoice once it has been sent through SII. If it is refused or not received, the buyer must contact the seller via email. If no acknowledgement is given within that period, it will be considered formally accepted.
Setting up e-invoicing in Chile with Sovos
Electronic invoicing is becoming more common globally, following the lead of Latin American countries like Chile, and compliance must be a priority.
E-invoicing is becoming global, but it’s fragmented everywhere you do business, solidifying the need to choose a single vendor for compliance. Sovos is a tax compliance partner you can trust.
Focus on what truly matters and reclaim your time, knowing Sovos has your back. Speak with a member of our team today to begin reclaiming your time.
Complete the form below to speak with one of our e-invoicing experts
Argentina was an early adopter of electronic invoicing, with its e-invoicing journey beginning in 2002. The technology was only implemented on a widespread level across the nation in 2015, but it still beat most countries to digitizing its invoicing system.
While Argentina’s e-invoicing scheme may be less confusing than others, it’s important to know the exact rules and regulations to avoid paying the price that comes with non-compliance. This dedicated overview has you covered on all thing Argentina e-invoicing, no matter how things change in the future. Be sure to bookmark this page and check back periodically.
Here is a quick run-through of how Argentina’s e-invoicing process works:
Issue the e-invoice once you have the necessary recipient information
Receive the Electronic Authorization Code (CAE) from the AFIP Federal Public Revenue Administration (AFIP)
Once the e-invoice is validated, the issuer sends the document to the recipient
Both the issuer and recipient electronically store the invoice securely for 10 years
Characteristics of electronic invoicing in Argentina
Argentina B2B e-invoicing
Argentina was an early adopter of e-invoicing when considering the global landscape. It had an optional system starting in 2003, and it made electronic invoicing mandatory years later – slowly warming organisations up to the idea of transmitting data online.
Mandatory since 2015 for businesses operating in Argentina, the e-invoicing scheme also includes export invoices, cash receipts, credit memos and debit notes. Businesses registered in the country are required to file for an Electronic Authorization Code (CAE) through the domestic tax authority, and they must conform to the rules laid out in the mandate.
All taxpayers in the country – even freelancers – have had to meet particular e-invoicing obligations. These requirements change depending on the specifics of each business; for example, small businesses with an annual turnover under a particular threshold only need to issue e-receipts for in-person transactions, whereas larger businesses must issue e-invoices for all transactions.
Argentina B2G e-invoicing
As you may expect, having already started learning about Argentina e-invoicing, the country requires electronic invoices to be transmitted for B2G transactions.
The same rules apply as per B2B, where taxpayers are required to be approved by the tax authority, and they must issue compliant electronic invoices through the typical process.
Put simply, if you’re an Argentinian taxpayer doing business with public administrations and governmental departments, you must issue e-invoices.
Types of invoices and electronic documents
There are a host of invoices and electronic documents that businesses operating in Argentina should be aware of. Different business operations require specific types of receipts, including:
Invoices, invoice receipts and export invoices
Debit and credit notes
Purchase receipts of used goods
There are different types of invoices to be aware of, too:
Type A: Issued by registered taxpayers when transacting with other registered taxpayers
Type B: Issued by registered taxpayers when transacting with final consumers or exempt taxpayers
Type C: Issued by non-registered and exempt taxpayers to all customers
Type E: Issued by any taxpayer when dealing with exported operations
Type T: Issued by hotels and accommodation services for foreign tourists
Factura de Crédito Electronica: Applies to micro, small and medium-sized businesses, allowing the advance collection of credits and receivables issued to their customers. This type of invoice can be Type A, B or C, as defined above with their corresponding credit and debit notes.
Benefits of using e-invoicing in Argentina
While taxpayers are technically required to send and receive invoices electronically in Argentina, there are additional benefits to e-invoicing when compared to traditional invoicing.
Save costs: E-invoices reduce your reliance on paper usage, postage and manual labour
Time savings: With standardised formats and automated processes, it frees up your team to focus on what truly matters
Peace of mind: Authentication and validation are built into the e-invoicing process, ensuring the authenticity of the documents
Timeline of e-invoicing in Argentina
Argentina’s implementation of electronic invoicing was done over many years, following this journey:
2002: General Resolution 1361 is published, introducing e-invoices as a duplicate voucher
2005: Argentina published General Resolution 1956, introducing an e-invoice issuance and storage system
2006: General Resolution 2177 mandates the use of electronic invoices for certain groups of taxpayers
2008: General Resolution 2485 is published, establishing a special regime for the issuance and electronic storage of original receipts for registrants and small contributors
April 2015: General Resolution 3749 comes into effect, implementing widespread e-invoicing by mandating the technology for all VAT-registered taxpayers
April 2019: General resolution 4290/2018 mandates e-invoicing for all companies, including freelancers
June 2021: All e-invoices must include QR codes
Penalties: What happens if I don’t comply with e-invoicing in Argentina?
A taxpayer could receive significant penalties if they fail to meet the requirements of Argentina’s e-invoicing scheme.
As per conditions established by the Federal Administration of Public Revenues, those who fail to issue e-invoices or comply with the regulation may be sanctioned with the closure of their organisation for two to six days.
What else do I need for VAT compliance in Argentina?
While it’s important to stay current with e-invoicing rules and regulations in Argentina, your business also has other obligations.
Argentina’s VAT regulations, for example, require your organisation to pay attention to – and comply with – more than just electronic invoicing mandates. Overall tax compliance is vital for businesses, and Sovos is here to help.
Once an electronic invoice has been approved and issued, cancellations are not accounted for. Reversing the transaction must be done by issuing a credit note.
With electronic invoicing becoming more common globally, following the lead of Latin American countries like Argentina, it is important that you prioritise compliance.
The global – yet fragmented – adoption of e-invoicing solidifies the need to choose a single vendor for complete compliance wherever you do business. Sovos is a tax compliance partner you can trust, allowing you to focus on what truly matters.
Speak with a member of our team today to gain peace of mind.
Complete the form below to speak with one of our e-invoicing experts
The Chilean Internal Revenue Service (SII) recently published version 4.00 of the document describing the format of electronic tickets for Sales and Services.
The electronic ticket (or Boleta Electrónica) is an electronic receipt issued for the sale of goods or services to individuals, consumers or end users.
The document includes basic information about the transaction, such as:
The seller’s tax identification number
A summarised description of the goods or services
The total amount paid
Applicable taxes
The electronic ticket is for less formal, business-to-consumer (B2C) transactions and is subject to less rigorous reporting requirements than electronic invoices (Factura Electrónica). It is often used for smaller transactions, such as retail purchases or services rendered to individuals.
Who is required to issue electronic tickets?
All taxpayers who issue sales and service receipts on paper
All taxpayers who start as a company must issue sales and service receipts to final consumers
Businesses must use certified invoicing software to generate electronic tickets. These software solutions need to be approved by the Chilean tax authority, the Servicio de Impuestos Internos (SII).
The generated electronic invoices must be digitally signed using an electronic signature to ensure their authenticity and integrity.
Taxpayers authorised as issuers of electronic tickets must digitally send all the electronic tickets issued and generated to the SII. These should follow the Technical Instructions provided in Annex 1 of Resolution 74 of 2020, and any future updates.
What’s required in an electronic ticket?
In accordance with the Technical Instructions, the electronic ticket must contain the following information:
The net amount of the transaction
VAT corresponding to the transaction
Business name of the company that made the sale
Single Taxpayer Registry (RUT) of the company
Single Taxpayer Registry (RUT) of the buyer
Date of issue
Merchandise breakdown: product sold, quantity, unit price and total sale
After generating the electronic tickets, businesses submit them to the SII. Since the SII must validate both the XML format of the document and its electronic signature, the SII has established a limit of 500 ballots per batch.
How electronic tickets can help businesses
On the other side of the transaction, the recipient of an electronic ticket can access and verify the invoice through the SII’s online platform. They can accept or reject the invoice, which helps maintain transparency and accurate transactions.
The data generated by this electronic receipt system drives efficiency. For example, businesses can obtain important information, such as:
The number of sales during a given time
The company’s sales flow
The number of tickets or transactions in different branches of the same business
Other data to help business decision-making
Businesses must maintain records for six years in the XML format established in version 4.00.
Non-compliance with the electronic invoicing requirements or submitting inaccurate information can lead to penalties. The SII has the authority to audit businesses to ensure compliance with tax regulations.
Need help for invoicing in Chile?
Are you in financial services or working at a bank with more questions about invoicing in Chile? Speak to our tax experts.
Customers can securely process high volumes of documents for billing and electronic validation in real- time
BOSTON – October 5, 2022 – Global tax software provider Sovos today announced it has acquired Lima, Peru-based Escontech, one of the main leaders in the country in SaaS electronic invoicing and validation services for the issuance of electronic receipts. In the last five years, the company has specially focused on the integration of transactional solutions in Information Technology using world-class standards, achieving in the last two years the fastest growth in the ecosystem of Peruvian companies that provide this type of specialized services.
Escontech’s technology and positioning in the Peruvian market strengthen Sovos’ current capabilities and scope in this type of services, by efficiently covering and supporting major companies in areas such as banking, financial services, insurance, mass market, tolls, and other high transaction industries. The company has been approved as an Electronic Services Provider and Operator by the Peruvian Tax Administration (SUNAT), which allows it to support its users in the issuance, transformation and final computer verification of invoices, bills, and other electronic payment vouchers from a company’s administrative systems.
“Escontech will play an important role in our ability to provide customers in these regions, as well as globally, with the technology needed to process high volumes of documents securely for billing and electronic validation, while ensuring compliance with local regulations. These solutions will be a great complement to Sovos’ existing portfolio, simplify the integration process and be supported by the best professional services group in the industry,” said Alvaro Gonzalez, managing director, Latin America.
Leading companies and institutions rely on Escontech to validate their transactions quickly and securely, paving the way for frictionless commerce business environment. Together, Escontech and Sovos will help lead the fight against fraud while ensuring compliance in highly regulated industries.
“The group of professionals that make up the productive force of Escontech value with great enthusiasm to be part of a great global organization and leader such as Sovos. Since our beginnings in the provision of this type of specialized transactional services, we have sought to innovate with value, by delivering a user experience of quality and excellence, but mainly, of commitment and closeness. Now with Sovos’ vision, its technological and financial resources, its multi-territory presence, and its specialized human talent, we will contribute more efficiently to delivering satisfactory experiences to users in different areas and geographies,” said Rogelio Martinez, founder of Escontech.
Sovos is owned by Hg, the London-based specialist private equity investor focused on software and service businesses, and TA Associates. The terms of the deal were not disclosed.
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About Sovos
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe and is owned by Hg and TA Associates. For more information visit www.sovos.com/es and follow us on LinkedIn and Instagram.
About Escontech
Escontech is a company dedicated to the integration of information technology and security solutions through world-class standards. Throughout its history, the company has incorporated a special group of human talent that in the last 16 years has provided services to leading companies in Colombia, Ecuador, Peru, Venezuela, and the Caribbean.
With the entry into force of resolutions SAT-DSI-1240-2021 and SAT-DSI-1350-2022, most taxpayers in the country are now obliged to issue electronic invoices under the Online Electronic Invoice System (Regimen de Factura Electronica en Linea – FEL).
The latest taxpayers to join the mandatory electronic billing system are include taxpayers incorporated into the General Value Added Tax (VAT) Regime and the group of natural and legal persons registered in the Small Taxpayer Regime.
With the addition of these last two groups, the Superintendence of Tax Administration of Guatemala (SAT) has practically completed the gradual process of incorporation into the country’s electronic invoicing regime.
Today, the general population should only accept FEL documents from obligated taxpayers. Paper invoices (preprinted) are no longer valid, making them unusable for transactions such as tax credit, among others.
The operating model and the rules applicable to the online electronic invoice of the Republic of Guatemala includes the issuance, transmission, certification, and preservation by electronic means of invoices, credit and debit notes, receipts, and other documents authorised by the Superintendence of Tax Administration, known as Electronic Tax Documents (DTE).
Electronic documents
The following tax documents are available for issuance under the Regimen de Factura Electronica en Linea – FEL:
Sales Invoice
Exchange Bill
Small Taxpayer Invoice
Small Taxpayer Exchange Invoice
Special Invoice
Agricultural Taxpayer Invoice
Agricultural Taxpayer Exchange Invoice
Small Taxpayer Invoice Electronic Regime
Exchange Invoice Small Taxpayer Electronic Regime
Agricultural Taxpayer Invoice Special Electronic Regime
Agricultural Taxpayer Exchange Invoice Special Electronic Regime
Credit Note
Debit Note
Credit Note
Donation Receipt
Receipt
Guatemala e-invoice issuance process
The Guatemalan system follows e-invoice clearance system, the well-established trend in LatAm countries. The clearance system means that the tax authority must authorise the electronic documents before the issuer is able to send them to the recipient.
The issuance process goes through the following mandatory steps:
The taxpayer issues the document with an electronic signature, and it is sent to the certifier automatically.
The certifier receives, validates, and authorises each document, which is automatically sent to the issuer and to the SAT.
The issuer delivers the document to the receiver or client.
The SAT verifies each electronic tax document and makes it available to the issuer and receiver for consultation and verification.
Archiving
The SAT store all invoices. This does not exempt senders and receivers from keeping the XML file for the period of four years, established in the Tax Code. The certifiers are also obliged to keep the certified DTE files in XML format, as well as the respective acknowledgments of receipt from the SAT.
Implementation
Now 98.23% of the total billing of the General VAT Regime is using FEL, with only around 20,000 businesses needing to migrate to the system since it was first launched in 2020.
Online e-invoices for all remaining VAT registered business will be mandatory from 1 April 2023 via the FEL.
More taxpayers join the Electronic Invoicing System of Paraguay (SIFEN)
Since Paraguay started implementing its National Integrated System of Electronic Invoicing (SIFEN) plan in 2017, the Undersecretary of State for Taxation of Paraguay (SET) has carried out the process.
The different phases are:
Pilot plan
Voluntary phase
Mandatory implementation
Due to the arrival of SET resolution 105/21, numerous companies have been voluntarily incorporated into the system. This is to prepare for mandatory electronic invoicing in 2023. SET resolution 105/21 provides measures for the issuance of electronic tax documents and an implementation calendar for 10 groups of taxpayers.
More than 80 million electronic documents have been issued since the system started operating. With resolution 105/2021 coming into force, it is expected that over 5,000 taxpayers must issue their receipts electronically by 2023.
How the SIFEN Works
The SIFEN is oriented towards large and medium-sized invoice issuers, whether they join voluntarily or are mandatorily designated by the Sub-Secretary of State for Taxation (SET).
The system contemplates two moments in its operation flow:
Commercial operation with electronic documents
Transmission of electronic documents to the SET
In the first moment, because of the commercial operation, the obliged taxpayer issues the digitally signed electronic document and sends it to the buyer or receiver in XML format. The issuer must make available a graphic representation of the document (KuDE) that supports the transaction in a physical or digital format if the buyer or recipient is not operating under the SIFEN.
The second moment comprises taxpayers’ transmission of the digitally signed XML document to the SET for its approval process.
SIFEN’s operating model is deferred, meaning that the issuer of an electronic invoice must transmit the electronic documents in an XML file for their respective validation. This needs completing within 72 hours of the electronic document’s signature – any later and it will be considered as extemporaneous transmission and subject to penalties.
Electronic documents acquire the nature of Electronic Tax Documents (DTE) with legal validity and tax incidence once signed and authorised by the Tax Administration by means of an approval transaction number.
Mandatory and Voluntary Adoption
Resolution 105/2021 expands the list of those required to advance with the mass use of electronic invoicing, establishing the dates from which 10 groups of taxpayers must electronically issue all tax documents.
In accordance with the calendar established by the resolution, the companies participating in the pilot phase and voluntary adhesion became mandatory for electronic invoicing as of 1 July 2022.
The other taxpayers made up of groups 3 to 10 must implement electronic invoicing according to the schedule that begins with group 3 on January 2 January 2023, and ends with Group 10 on 1 October 2024.
More information on the taxpayer groups is available on the SIFEN web portal.
Voluntary adoption is possible for all taxpayers who wish to issue invoices electronically via the SIFEN. The minimum requirements are for companies to use software that integrates with the SIFEN and holds a valid Digital Signature certification.
Paraguay’s New E-invoicing System to Gradually Become Mandatory From July 2022
The electronic invoicing system in Paraguay has been in development since 2017 according to the plan carried out by the Undersecretary of State for Taxation (SET) to modernise and improve tax collection and minimise the incidence of tax fraud.
The introduction of the Integrated National Electronic Invoicing System (Es. Sistema Integrado de Facturación Electrónica Nacional -SIFEN –) meant the introduction of a new e-invoicing regime in the country. The adoption of this new system is currently in its voluntary adhesion phase, which began in 2019, and has allowed entrepreneurs, merchants, and companies to issue e-invoices optionally. However, from July 2022, the use of the system will gradually become mandatory for certain taxable persons.
Electronic Tax Document types
Taxpayers in Paraguay can use the SIFEN to issue Electronic Tax Documents (Es. Documento Tributario Electrónico – DTE). The DTE is a digital version of the invoice and other traditional documents, which has tax and legal validity. The DTE has become a modern, effective, secure and transparent form to issue and manage e-invoices for distinct types of business operations.
The DTEs are validated upon issuance by the SAT to support the VAT deductions and transactions related to income tax. Among the distinct types of DTE in Paraguay, we find:
Electronic sales documents:
Electronic invoice
Export electronic invoice
Import electronic invoice
Complementary electronic documents:
Electronic self-invoicing
Electronic debit note
Electronic credit note
The DTE issuance process
The e-invoices issued by the taxable persons that have adhered to the SIFEN are generated in XML format. The authenticity and integrity of each document are guaranteed through the digital signature and the control code that DTEs include. Each document must be sent electronically to the tax administration for its clearance.
The SIFEN is responsible for verifying and validating each document. Once it is established that the DTE meets all the requirements, it becomes a legal e-invoice. The taxable persons issuing the e-invoice then receive the verification results through the web service system.
After the e-invoice is cleared, suppliers can send the DTE to their buyers via email, data messaging or other means.
Paraguay E-invoicing mandate roll-out
The Paraguayan Undersecretary of State for Taxation recently published a General Resolution providing administrative measures for the issuance of DTEs. This resolution also established a phased schedule of implementation, in which certain taxable persons will be required to issue e-invoices and other DTEs using the SIFEN.
The implementation schedule consists of ten stages starting on 1 July 2022 with all taxpayers who joined the pilot program to adopt the SIFEN. From January 2023, the mandate will include more taxpayers. However, it is not yet defined which companies will start in that stage. The SET aims to cover all taxpayers carrying out economic activities in the country by October 2024.
What’s next
Companies in Paraguay must get ready to issue e-invoices under the requirements of the SIFEN. From 1 July 2022, all companies in the country will be able to use this system voluntarily. The list of taxpayers required to comply with the mandate will be available on the SIFEN website and on the SET website (www.set.gov.py). The SET will notify affected taxpayers via the Paraguayan Tax Mailbox known as “Marandu.”
Take Action
Get in touch with our team of experts today to ensure compliance with the latest Paraguayan e-invoicing regulations.
Moving goods from one place to another is a quintessential part of business. Manufacturers, wholesalers, transporters, retailers and consumers all need to carefully orchestrate the shipping and handling of raw materials, parts, equipment, finished goods and other products to keep business flowing. This supply chain harmony is what makes production and trade possible in society.
In Canada, the United States and most European countries, tax administrations don’t intervene much in these trade processes. Until recently, the same could be said about most countries of Latin America. But, with the rise and expansion of electronic invoicing mandates in the region, this is rapidly changing.
Most governments with mature e-invoicing mandates are now recognizing that these mechanisms and government platforms can be used as vehicles to understand where, what, how and when goods are being moved. The traditional electronic invoice, is no longer enough – and tax authorities are requiring businesses to report goods movements in real-time.
The implications are serious too. Goods moved on public roads without those documents are very likely to be seized by the authorities, and the owners and transporters will be subject to fines and other sanctions.
Brazil and Mexico lead the way
The country with the most sophisticated system in place is arguably Brazil. The MDF-e (or Manifesto Eletrônico de Documentos Fiscais) is a mandatory document required by the tax administration in order to audit the movement of goods in Brazil.
This purely digital document combines the information of an electronic invoice (NF-e) and the electronic documents that hauling companies issue to their clients (CT-e). This system became mandatory in 2014 and has since been expanded and modernized with a vast grid of electronic sensors and transponders placed in the public highways of Brazil, intended to ensure that every truck moving goods already has the corresponding MDF-e, NF-e and CT-e. In most cases, the authorities don’t need to stop the trucks to verify the existence of the document.
Mexico recently issued a new resolution requiring taxpayers delivering goods, or simply redistributing them, to have the corresponding authorization from the tax administration (SAT). Products delivered by road, rail, air or waterways need to have what is known as the CFDI with the Supplement of Carta Porte.
CFDI is the acronym for an electronic invoice in Mexico. That supplement of Carta Porte is a new attachment to the electronic invoice of transfer (Traslado) issued by the owners delivering products or to the CFDI of Income (Ingresos) issued by the hauling companies. Carta Porte will provide all the details about the goods being transported, the truck or other means being used, the time of delivery, route, destination, purchaser, transporter and other information. This new mandate will become effective on 30 September 2021. As is in Brazil, noncompliance with this mandate will result in hefty penalties.
E-transport elsewhere in LatAm
Chile also has a mandate requiring the delivery of goods to be pre-authorized by the tax administration. These tax authorized documents are locally known as Guias de Despacho (or dispatch guides) and since January 2020 they can only be issued in an electronic format.
There are some exceptions where the dispatch guide can be issued temporarily on a paper format by certain taxpayers. Also, in cases of contingency, taxpayers may be authorized to issue paper versions of the guide; however, that will not exempt the issuer of regularizing the process once the contingency is complete.
The content of the dispatch guide will vary depending on who issues it and the purpose of the delivery (sales, consignment, returns, exports, internal transfers etc.) but in general, delivery of goods in Chile without the authorized dispatch guide will be subject to penalties from the tax administration (SII).
Argentina has a federal level VAT and a provincial level gross revenue tax. To control tax evasion, both levels of governments exercise certain levels of control in the process of dispatching goods within their jurisdictions.
The tax authority’s system for controlling the flow of goods in public ways is not as encompassing as in Brazil, Chile and Mexico, but it is getting closer. Only the provinces of Buenos Aires, Santa Fe and Mendoza, plus the City of Buenos Aires, require authorization from the fiscal authority to move goods that originated in, or are destined to, their jurisdictions. For that, they require the COT (or Transport Operations Code) where all the data related to the products, means of transport and other information is included once the authorization is provided. The provinces of Salta, Rio Negro and Entre Rios are working on similar regulations.
At federal level, the AFIP (Federal tax administration) only requires pre-authorization for the delivery of certain products such as meat and cereals. But at this level too, the regulatory environment is changing.
The AFIP, along with the Ministry of Agriculture and the Ministry of Transportation have issued a joint resolution 5017/2021 that mandates the use of a digital bill of lading (Carta Porte Electronica) whenever there is a transfer of agricultural products on public roads in Argentina. This change will become effective on 1 November 2021. In 2022, this federal requirement may expand to other products.
LatAm sets the scene for electronic invoicing trends
The requirement of authorization for moving goods in LatAm is not limited to the largest economies of the region. Smaller countries with electronic invoicing systems have expanded, or are in the process of expanding their mandates to require taxpayers to inform the tax authority, before goods are moved as result of a sale or any other internal distribution.
For instance, Peru requires the Guias de Remision from taxpayers before they start the delivery of their products. This electronic document should be informed to and authorized by the tax administration (SUNAT) using the digital format established for that purpose and will include all the information about the product delivered, issuer, recipient, means of transport, dates and more.
Uruguay has the ‘e-Remitos’ which is an electronic document authorized by the tax administration (DGI). It is required for any physical movement of goods in Uruguay. As in other countries, this document will provide all the information about the goods being transported, the means used, the issuer, the recipient and additional data. It is electronically delivered and authorized by the tax administration using the XML schemas established for that purpose.
Lastly, in Ecuador the tax administration (SRI) requires the ‘Guias de Remision’ (Delivery Guide) for any goods to be transported legally inside the country. As the infrastructure to support the electronic invoice is not fully developed in Ecuador, in some cases the tax administration allows the taxpayer to comply with this part of the mandate by having the electronic invoice issued by the retailer delivering the goods to his clients. Even though Colombia and Costa Rica do not require a separate electronic document to authorize the transport of goods, it is expected that in the future, this requirement will come into effect, mirroring what has happened in many other countries of the region.
The common element of all these mandates in Latin America, is that all of them are closely knitted to the electronic invoicing system imposed in each country. They are basically seen as another module of the electronic invoice system where information regarding goods being transported by public roads, waterways, by rail or air should be submitted to the tax administration, via the XML schemas established for that purpose.
Tax administrations in the region are actively enhancing their systems to ensure that movements of goods are properly controlled in real time. In some cases, tax administrations have provided online solutions aimed at taxpayers with small numbers of deliveries. But for all other taxpayers, a self-deployed solution is required.
Enforcement of the mandate is made not only by the tax administration, but also by the police and the public roads authorities, both of which routinely seize goods for non- compliance. Since these mandates have proven to be successful to control tax avoidance and smuggling, it’s safe to say that the Remitos, Dispatch Guides, Carta Porte or COTs are here to stay for good and taxpayers doing business in Latin America have no option but to comply with this new regulatory requirement.
The Colombian electronic invoicing system is reaching maturity level. Since its inception in 2018, Colombia has been steadily consolidating and expanding the mandate to make it more stable, reliable and comprehensive.
As a result of the enactment of the recent Resolution 000013/2021, the Colombian tax administration (DIAN), officially expanded the electronic invoicing mandate to also include payroll transactions. This expansion follows the pattern established by Mexico, Brazil and other countries that already expanded the electronic invoicing mandate to payroll transactions as well.
The Support Document for Electronic Payroll is known locally in Colombia as Documento Soporte de Nomina Electronica or also simply as Nomina Electronica. It is a new digital document intended to support and validate the payroll related costs and deductions of income tax and the VAT credits (if applicable) when businesses make payments resulting from labor, legal, and other similar types of relations (pensions).
In simple terms, labour cost transactions should be reported under this new digital system for them to be valid. This is whenever employers make payments for wages, salaries, reimbursements, pensions etc.
Who is required to comply with the electronic payroll mandate?
Employers paying wages under a labor relation, where payments are reported as expenses for income tax purposes or as deductible taxes for VAT, need to comply. However, there are important exceptions derived from that legal framework. For instance, public offices, non-for-profit entities or taxpayers under the simplified regime are not currently required to comply. Consequently, they do not need to use such payments for deductions of income tax or VAT.
Schedule of deployment
The DIAN established an implementation schedule based on the number of employees the taxpayer has in the payroll. There are four stages or groups subject to the following deadlines:
Group
Deadline to start the generation and remittance of the document
Number of employees
From
Up to
1
1 September 2021
More than 250 employees101
2
1 October 2021
101
250
3
1 November 2021
11
100
4
1 December 2021
1
10
Deadline for remittance
As the Nomina Electronica is required to be reported monthly, the payments for each month should be reported by the 10th day of the next month as a result. The adjustment notes should be reported within the same deadline, once they have been made by the employer.
Reporting elements of the electronic payroll mandate
There are two basic types of reports that are parts of this mandate: the Support Document of the electronic payroll, and – when necessary – the Adjustment Note.
Support Document of Electronic Payroll or Nomina Electronica
This electronic document contains the information supporting the payments made to employees as wages and other compensations, deductions and the difference between them made by the employer, as reported in the payroll. The employer must then generate and transmit the document to the DIAN using the XML format established in the technical documentation included in the regulation 000037/2021.
Adjustment Notes
In this mandate there are no credit notes as we know them in the electronic invoice system of Colombia. However, when an employer needs to make corrections to the Support Document of Electronic Payroll reported to the DIAN, it can issue what we know as Adjustment Notes (or Notas de Ajuste) where the employer will be allowed to correct any value previously reported to the DIAN via the Nomina Electronica.
Content and structure of the reports
Employers must submit reports to the DIAN individualised for each beneficiary receiving payments from the employers. As a result, the report requires the provision of some mandatory information for the DIAN to validate. This includes the proper identification of the report itself, the reporting party, in addition to the employees, wages or other payments employees, date, numbering, software etc.
Another mandatory information element that is worth mentioning is the CUNE or Unique Code of Electronic Payroll Support Document. This is a unique identifier for each Electronic Payroll Support Document. It will allow exact identification of each report or the Adjustment Notes issued after it. However, there is some additional optional information that can be provided depending on the needs or convenience of the employer making the report.
From a technical perspective, neither the Support Document of the Electronic Payroll nor the Adjustment Notes are based on the UBL 2.1 structure used in Colombia for the electronic invoice. This is because the UBL standard does not include modules for payroll transactions or reports. Therefore, the DIAN has based its architecture in a different XML standard. Each report requires a digital signature. For that, the taxpayer can use the same digital certificate used for signing electronic invoices.
Generation, transmission and validation
The current regulations do not require that the Nomina Electronica or the Adjustment Notes should be generated by a particular software solution or by a software provider authorized by the DIAN. Taxpayers have the option to generate the report using their own solution. That is a market solution or a solution that the DIAN will provide for small taxpayers. However, all reports should strictly follow the technical documentation issued by the DIAN within the Resolution 000037/2021. The remittance of those documents is electronic, using the webservices specified by the DIAN.
After making the transmission, the DIAN then validates the document. They will then report back the corresponding application response to the taxpayer, indicating its acceptance and validation. Only then, will the amounts reported in the payroll document are valid expenses for the deduction.
Penalties and sanctions
Non-compliance with electronic payroll in Colombia will be subject to the same fines and penalties established for not complying with the electronic invoicing mandate, as defined in Art. 652-1 of the Tax Code of Colombia (Estatuto Tributario). But the most important implication of non-compliance is that any payment not reported by the employer, will not be allowed as expenses for income tax or VAT purposes when applicable.
With two weeks to go until the first mandatory phase of the Indian e-invoicing reform go live, the GST Council slammed the breaks. Or at least, bring it to a significant temporary standstill of 6 months. As a result, the India e-invoicing reform is now postponed until 1 October 2020
Following a long list of complaints — both from the private sector toward the GST Council, as well as from the GST Council vis-á-vis the IT infrastructure provider that powers the GST Network, Infosys — the council decided to revisit the 1 April go-live in a recent meeting held today, Saturday 14 March.
Delaying the first mandatory go-live of the e-invoicing reform with six months, from 1 April 2020 until 1 October 2020
Delaying the obligation for B2C invoices. Those issued by the largest taxpayers in India, with a threshold above Rs.500 Crore. This is to include a QR code, from 1 April 2020 until 1 October 2020
Excluding certain types of taxable persons from the scope of the e-invoicing reform
The obligation to generate QR codes. For example, insurance companies, banks, and other financial institutions. Also non-banking financial institutions, and passenger transportation services
Postponing the entry into force of the new GST returns until 1 October 2020
Calling the chairman of Infosys to attend the next three GST Council meetings. This is for the purpose of reporting status updates of technical and infrastructure improvements to the underlying IT platforms that are the foundation of the on-going GST control reforms
The decisions made in the 39th meeting of the GST Council will require either that the legislative framework (Notifications) published in early December be amended or entirely replaced with new ones to reflect the new reality. However, it wouldn’t be unreasonable to expect even further delays to the roll out of this reform. This given to the recent economic volatility triggered by the ongoing pandemic. Only once both global markets as well as the underlying technical platforms of the GST control reform seem to stabilize will the post-October timeline of the roll out be fully certain.
Sun Chemical consolidates its global tax obligation with Sovos
case study
Sun Chemical
Sovos made multinational reporting simple for Sun Chemical, allowing it to consolidate its compliance efforts.
Summary
Business Challenges
Sun Chemical sought to find the right solution to minimise the impact of changing mandates on 24/7 business operations.
The company needed to address language barrier among local and technical teams.
Solution
Sun Chemical needed a platform that could consolidate its compliance efforts across all its Latin American markets.
Benefits
The Sovos Business to Government regional solution minimises business delays and disruptions for 24/7 operations.
It offers local support in Spanish, English, and Portuguese, eliminating the language barrier issue.
Without the constant need for legislative monitoring, the Sun Chemical team can focus on innovation.
The Company
Sun Chemical is the world’s largest producer of printing inks and pigments. With more than $3.5 billion in annual sales, the company is a leading provider of materials to packaging, publication, coatings, plastics, cosmetics and other industrial markets in 56 countries. Sun Chemical operates 24 hours a day, seven days a week, and has hundreds of multinational suppliers and partners from around the world.
The Challenge
Sun Chemical cannot afford business disruptions or shipping issues due to its operating schedule. Its e-invoicing process must be seamless across throughout the process, including SAP configuration, middleware performance, connections to the local authority’s compliance server, and printing.
Because of e-invoicing mandates in Latin America, Sun Chemical faced the challenge of conducting constant legislation reviews to determine new requirements that needed to be converted into the system. The language barrier also posed a challenge. With technical requirements being communicated in local languages, fluency to understand the mandates and to convert changes into the system was required. For parties without a high level of technical proficiency in the local language, this caused lag time and confusion, contributing to reduced efficiencies.
The Solution
Based on individual compliance needs, Sun Chemical initially elected to implement different solutions in each country. In Argentina, it selected the regional Sovos Business to Government Reporting solution to maintain its compliance platform. In Chile and Mexico, it selected two separate local providers with two different models, and in Mexico, it implemented an internal solution. Get in touch with our experts for your compliance journey.
“Change is happening, but we’ll automatically solve it with the [Sovos] solution. Converting a legal requirement in a local language into a configuration plan is very complex, so the service of automatic updates to the new legislation was a clear key point of help for us.”
Aldo Magenes
SAPAnalyst, Sun Chemical
The Benefits
The metrics showed a large production support advantage in Argentina, where Sun Chemical had implemented the Sovos Business to Government Reporting regional platform. The company elected to expand its partnership with Sovos to cover its operations in Chile, Mexico and Brazil as well.
The Results
With local support in English, Portuguese and Spanish, the Sovos Business to Government Reporting regional platform helped Sun Chemical isolate its compliance problems and focus on driving business results. The Sovos solution alleviated the need to monitor every single change and translate each of those changes into system configuration plans, saving the team valuable time and reducing the risk of penalties.
Why Sovos?
Sun Chemical evaluated each of its four Latin American e-invoicing compliance solutions with a series of analytics measuring cost and benefits. Company leaders knew the internal team’s time was best spent on innovation and improving business and customer relationships, so they were looking for the solution that would minimise delays and disruptions and keep the team focused where it mattered most.
Companies dealing with complex sales and use tax determination, VAT regulations and other tax challenges across the globe know that SAP alone is not equipped to support the varying requirements from country to country. As SAP sunsets support and updates for ECC and R3, companies must move to HANA to keep their systems up to date. With this inevitable change to S/4HANA or HANA Enterprise Cloud, now is the perfect time to step back and develop a comprehensive strategy to managing tax worldwide.
SAP users must migrate to HANA by 2025, but a majority have not yet started the process. Since the move requires major changes to ERP infrastructure, SAP users with global operations should take advantage of the unique opportunity to be more strategic in their implementation. With the right approach, companies can future-proof their solutions in a way that ensures they can keep pace with constant changes in tax regulations throughout Latin America, Europe and beyond.
Learn how to minimise business disruption during an SAP S/4HANA upgrade project in the wake of modern tax: Read Preparing SAP S/4HANA for Continuous Tax Compliance and don’t let the requirements of modern tax derail your company.
Governments around the world are implementing technology for tax enforcement. In order to keep up, companies must make the digitisation of tax a core pillar of their HANA migrations.
In the move to HANA, companies must consider the new world of tax, which includes:
Constant change management – Companies must be able to anticipate and quickly adapt to major tax reform legislation and smaller rate and field changes while not disrupting operations or risking non-compliance.
Internal processes – Compliance often requires changes to basic processes, procedures and technologies employed by global companies. For example, in Latin America, logistics can be impacted by VAT regulations because many countries now require e-invoices to act as a bill of lading, created before products can ship.
Required automation – Standardisation requirements in Latin America and Europe are designed to quickly identify errors and data discrepancies by eliminating paper-based reports in favour of automated processes. Companies must automate their own operations to avoid errors and audit triggers.
The move to S/4HANA or HANA Enterprise Cloud requires companies to move all of their processes, customisations and third-party add-ons to the new platform. As such, there are several critical considerations.
What to migrate, and when
Since most companies’ SAP ERP systems have been built and customised over many years, many will benefit from a phased approach to HANA implementation. The less customised modules, such as Financial Accounting (FI) and Controlling (CO) will be easier to move than Materials Management (MM) or Sales and Distribution (SD), which will need a long-term plan for customisations.
What to do with customisations and third-party apps
Many SAP configurations have become a patchwork of customised code and bolt-on applications. This is especially true when it comes to sales and use tax determination, e-invoicing, and VAT compliance and reporting, since requirements are vastly different in every jurisdiction a company operates. The move to HANA gives companies the opportunity to consolidate, eliminating local configurations in favour of a global strategy. Companies that proactively plan can help to ensure that the next 15 years are simplified, without the constantly changing configurations needed in the previous 15 years as governments have gone digital.
Take Action
With an upcoming migration to SAP HANA, businesses must consider a solution that maintains SAP as the central source of the truth while keeping pace with constant regulatory change. Learn how Sovos is helping companies do just that, safeguarding the value of their HANA implementation here.
