There is a lot of curiosity following the announcement on May 31, 2013, of modifications to einvoicing in Mexico, but there is also a chance that many businesses will fail.
There are no “grandfather” terms in the modifications, and CFD is sunset. Knowing that the government would still accept CFD has let many groups fall asleep peacefully. This is due to the fact that, in the past (and by past I mean before to May 31, 2013), if you had been performing CFD prior to January 1, 2010, you could still send CFD XML. Since then, there have been other CFDI regulations, and the CFD “grandfather” condition has always been in effect. Prior to this, it was stated in the resolution that CFD was no longer viable as of January 1, 2014 on the Mexico SAT website:
The official record of the legislative amendments was made public: The second resolution of modifications to the 2013 other fiscal resolution (RM for RMF) was published in the DOF on May 31, 2013. Mexico SAT Documentation Link
The following are the fundamentals of CFDI in Mexico that you need to know now that CFD eInvoicing is no longer permitted. How to Create a Legal Entity
- Obtain an RFC for the Federal Contribuyent Register (Mexican Tax ID)
- RFC application for FIEL (Firma Electronica Avanzada). Before the SAT, it uses PKI Public Key Infrastructure to identify and validate the data about the tax payer (Mexican Tax Authorities).
- Apply for a CSD (Certificado Sello Digital) through the FIEL to be utilised with CFDI process flows.
- Have a solution provider who can convert your proprietary invoices into the XML v3.2 format specified by Anexo 20 of the Miscelania Fiscal tax code of Mexico. Due to the fact that no two customers’ accounting systems are set up the same, this is by far the most underappreciated problem with CFDI invoices. Additionally, the unique requests made by your customers may also have a significant impact and result in an integration nightmare when attempting to force your data into the government standard (not just once, but for all the various variations you offer in your business and all the various variations requested by your customers).
- Apply a sello, a type of digital signature, using the CSD.
- XML syntax validation is done to achieve the “Timbre Fiscal” or official seal.
- The “Timbre Fiscal” must be kept in your back-end accounting system.
- The invoice, which now contains the “Timbre Fiscal,” must be printed off, and according to the law’s harshest application, you must put a copy of it on the truck when you send it, much like Brazil’s Nota Fiscal system.
- The signed XML must be made available to your end users by law.
- The majority of businesses will email the signed XML invoice and the PDF rendering to the client, but additional options include B2B communications or uploading to a client site.
- These invoices must be kept on file for at least five years.
- If the invoice needs to be changed, you must first cancel the original one with the government and create a new one; otherwise, you will still be responsible for the tax ramifications of the earlier invoice.
- A large customer’s request for “Addenda” information can complicate the process. Within the government XML, an Addenda is a specific area where you can insert particular information. The information is irrelevant to the government, but a Wal-Mart, for instance, can ask the supplier to include the PO # in the Addenda so that they can speed up the payables process. Customers may request numerous Addenda requests and/or a great deal of additional information on the PDF printing that is unique to them, which can greatly complicate the process.
- When you get the XML invoice as a buyer. According to the law, you must verify that the XML is genuine, registered with the SAT, and archived for 5 years because it will be the key document if there is an audit.
Don’t wait until the last minute; speak with a solution provider now, before the other 500,000 businesses, as this is a significant business process change that will affect the configuration of your ERP system. During this shift, you most definitely don’t want to be last in line.