For the real-time issuance and validation of electronic invoices, Mexico started forcing businesses to interface with the Mexico Tax Authority (SAT) on January 1, 2011. Non-compliance with Mexico’s Servicio de Administración Tributaria (SAT) is equivalent to tax fraud, which carries severe fines as well as the possibility of criminal prosecution and jail term for the executives in question. Organizations must make sure that their process and accounting systems are valid in light of these significant penalties.
Your firm requires a straightforward method to not only keep up with evolving legal requirements but also to make sure they are legally and promptly incorporated into your ERP processes in the ever-changing environment. The main points covered in the 2011 and 2012 CFDI v3.2 legislation are discussed in this article.
Remember that there will be NEW LEGISLATION in 2012; the additions and modifications from 2011 are listed here.
Mexico mandates in 2011
- Paper documents employ standard corporate terminology (e.g. Factura, Nota de Credito, Carta Porte)
- Use Ingreso, Egreso, or Traslado for electronic documents (CFD or comprobante fiscal digital).
- Ownership is established and the source and destination of shipments are documented by transportation and commercial law.
- Electronic papers (CFD) are required by fiscal laws to clearly demonstrate fiscal worth.
- Three Important Documents Defining 2011 Updates
- Resolución Miscelánea Fiscal: 2011 Tax Rules Amendment. Functional requirements are described in this paper, not their implementation. It specifically states that financial documentation worth more than 2,000 pesos must be signed and approved electronically before the truck may ship.
- The technical implementation details, including the XML message structure, are described in Annex 20. A CFD document must be certified (i.e., approved) within 72 hours of its first generation, according to the rule.
- Declaration forms and statements created as part of the registration process are listed in Annex 1-A.
- Observe the apparent inconsistency between RMA and Annex 20’s requirements for “timbre before shipment” and “timbre within 72 hours of CFD generation” with reference to the 72-hour rule. The current recommendation is to strictly interpret, ship with a signed CFD with timbre for routine operations, and ship provisionally without timbre only when necessary for activities in contingency mode.
- Stock transfers have no financial repercussions and can ship with a paper “carta porte” proving ownership and the location of the transaction.
- Sales to consumers do have a financial consequence; however, they must utilise an electronic CFD document that contains the SAT Approval Code, the Seal of Emitter, and the Seal of SAT (or timbre).
- Some businesses choose to disregard the fiscal environment; technically, this is against the law. 8,000 to 15,000 pesos in fines per document.
- Before entering the fiscal value into the legal books, the receiver is required to verify it.
- A crime is committed if something is not done.
- For this reason, inbound and outward CFD validation should be handled by e-invoicing solutions.
- Folio numbers are replaced by timbre in their place.
- Due to the fact that invoices are now accepted as part of the process, the monthly SAT declaration report is no longer necessary.
- No particular constraints for sequencing. You can continue with Invoices 5, 6, and 7 while the problem with Invoice 4 is resolved if Issue Invoices 1, 2, 3, and 4 have a problem.
Summary of Changes for 2012
- Timeline: SAT is currently completing the specifications for CFDv3.2, and confirmation is expected by the end of the year. In the first quarter, they will formally release the revised schema along with the transition period for businesses to adopt it. Companies will be able to utilise CFDv3.0 during this process but should be live with CFDv3.2 by June. We anticipate this will take roughly 6 months. (A precise date will be confirmed.)
- Shipping Requirement: A new rule states that the Comprobante (and UUID) must be included in the paperwork that is delivered on the truck for all deliveries made within Mexico. If not, the truck and its cargo may be seized and fines may be requested before release. For clients who do not currently have their billing and logistics systems integrated, this is a substantial adjustment. Similar to Brazil, contingency processing becomes essential to ensure that your company can still export even if the SAT systems fail.
- Paper: As long as a company’s yearly income is less than 2,000,000 pesos, it may continue to utilise paper. If annual sales exceeds this amount, electronic CFDI process is required. The dollar amount of each invoice is no longer relevant.
- Account Number: Emissor is required to be aware of and disclose the final four digits of each account number that one of their clients uses to make a payment.
- Fiscal Address: Only the nation, state, and postal code will still be required; the street and address are no longer necessary.
- Payments in Installments: For payments in instalments, the emisor is required to provide an invoice for each payment as well as a “informational” invoice to show the total amount. All invoices must be dated, signed, and sealed, and each payment message must include the UUID of the informational invoice as well as the date and total. The “initial” invoice submitted will be regarded as the informational message, but SAT needs to specify how to tag or mark the informational invoice so that taxes are not double counted. Additionally, they should be able to identify this approach since each “child” payment letter will include the reference numbers of the original parent invoice).