Electronic invoicing in Ecuador
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.
Table of contents
1. How does e-invoicing work in Ecuador?
2. Characteristics of electronic invoicing in Ecuador
3. Types of electronic receipts in Ecuador
4. Format of electronic invoices and documents in Ecuador
5. Participants in the e-invoicing process in Ecuador
6. Timeline of e-invoicing adoption in Ecuador
7. Penalties: What happens if I don’t comply with e-invoicing in Ecuador?
8. What else do I need for VAT compliance in Ecuador?
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.
FAQ
Is e-invoicing mandatory in Ecuador?
E-invoicing is mandatory in Ecuador for all VAT-registered domestic taxpayers.
Who needs electronic invoicing in Ecuador?
All established taxpayers must issue e-invoices in Ecuador.
Can an electronic invoice be cancelled?
Ecuador allows e-invoices to be cancelled through credit notes or cancellation prior to communication to the receiver.
How much time is there to cancel electronic invoices in Ecuador?
Issuers of electronic invoices have 90 days following the document’s issuance for cancellation.
How do I verify the authenticity of an electronic invoice?
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.
What is RIDE?
RIDE is a graphical representation of electronic receipts that is to accompany an e-invoice that is sent to a recipient.
Does the RIDE have to comply with any format?
RIDE documents must include a barcode that follows the GS1-128 standard, as well as a format outlined in Ecuador’s technical specifications.
What is the deadline for the issuance of a withholding receipt?
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.
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