Mexico SAT – 2012 New Legislation for e-Invoicing

For those interested in learning more about Mexico e-Invoicing, you may find this upcoming webinar useful.

Webinar: Mexico SAT – 2012 New Legislation for e-Invoicing

With: Jason Jones, e-Invoicing LATAM Expert
Date: Wednesday May 2nd, 2012
Time: 11:00 AM EST/8:00 AM PST

Mexico, in 2012, has changed their electronic invoicing mandate, again. In this informative session, learn about the new laws and how you should be preparing for the July 2012 deadlines.  Register for Webinar

With the increased use of e-Invoicing in Latin American countries, lawmakers are rapidly passing mandates to regulate the e-Invoicing process for tax and control reasons. These mandates are very specific in terms of how e-Invoices must be signed, sent, and archived.
In this educational session on Mexico 2012 changes:

• Learn about the Mexico SAT – 2012 process adjustments and legal mandates.
• Overview of the end-to-end process for Mexico compliance
• CFDI outbound process changes that affect shipping and partial payments.
• Why contingency mode should be considered.
• CFDI inbound process requirements for validation prior to posting taxes.
• How a single managed service platform can simplify compliance across Latin America: Mexico SAT, Brazil Nota Fiscal, and Argentina AFIP, and more....

Register for Webinar

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Kevin Benedict, EDI and e-Invoicing Veteran, Consultant, Speaker and Writer

Follow me on Twitter @b2b_benedict

Join the SAP EDI and e-Invoicing group on Linkedin

Full Disclosure: I am an independent consultant and blogger. I work with and have worked with many of the companies mentioned in my articles.

SAP Mexico SAT e-Invoicing – Comparison of 2011 vs. 2012 Legislation

Many of you may not be familiar with all of the recent developments in Mexico e-invoicing and the terminology used, so let's spend some time reviewing last year's developments and this year's.  I hope you find this useful.

2011 – Mexico Mandates

Terminology

• Paper documents use the common words for business process (e.g. Factura, Nota de Credito, Carta Porte)
• Electronic documents (CFD or comprobante fiscal digital) use Ingreso, Egreso, Traslado instead.

Regulations

• Transportation & Commercial Law establishes ownership and documents shipping source & destination.
• Fiscal Laws depends upon electronic documents (CFD) to unambiguously prove fiscal value.

2011 Updates Defined in 3 Key Documents

1. Resolución Miscelánea Fiscal: Amendment to Fiscal Rules for 2011. This document describes functional requirements, not how to implement them.  In particular, it says that fiscal documents over 2,000 pesos must be electronic and they must be signed and approved before the truck can ship.
2. Annex 20: Annex that describes technical details to implement the changes, including XML message structure.  It states that a CFD document must be certified (e.g. approved) within 72 hours of first being generated.
3. Annex 1-A: Declaration forms/statements prepared as part of registration process.

More Details

• 72 Hour Rule:  Note the seeming conflict between RMA and Annex 20 regarding “timbre before shipping” versus “timbre within 72 hours of CFD generation”.   Current advice is to interpret strictly and ship with signed CFD with timbre for normal operations and ship provisionally without timbre only case of need for contingency mode operations.
• Stock Transfers have no fiscal impact – can ship with paper “carta porte” to establish ownership and shipment destination
• Sales to customers do have fiscal impact – they must use an electronic CFD document, which must contain the Seal of Emitter, Seal of SAT, and SAT Approval Code (or timbre).  
• Some companies ignore the fiscal context – Strictly speaking, this is illegal.  Fines from 8,000 to 15,000 pesos per document. 

Receiving

• Receiver is obligated to validate the fiscal value before accepting into legal books.
• Failure to do so is criminal offense. 
• E-Invoicing Solutions should therefore handle both inbound and outbound CFD validation.

Technical Changes

• Folio numbers go away – replaced by timbre
• Monthly SAT declaration report goes away – no need any longer since invoices are approved as part of process
• No special sequencing requirements.  If issue invoices 1,2,3 and 4 then has a problem, you can go on with 5, 6, 7 while the issue with 4 is worked out.

Timeline: 

Government  specified January 1, 2011 as mandate for compliance.  September  3, 2010; press conference they said, “We will not change the date.”

• Except for companies with annual income less than 4,000,000 pesos per year.
• Except for companies already using CFD v2 e-Invoicing through Authorized Service Provider – they have until July 2011 to change
• Except for products selling for under 2,000 pesos. 

2012 – Summary of Changes

• Timeline: SAT is finalizing requirements now for CFDv3.2 with plans for confirmation by the end of the year.  They will officially publish the updated schema in the first quarter, along with the transition time that companies will have to implement it.  We expect this will be about 6 months, so companies will be able to continue to use CFDv3.0 during this time but should be live with CFDv3.2 by June.  (Exact date to be confirmed).
• Shipping Requirement: new requirement that all deliveries within Mexico must have the Comprobante (and UUID) as part of the documentation accompanying the truck for delivery.  Otherwise the truck and its goods can be impounded with fines demanded before release. This is a significant change for customers that do not have their logistics and invoicing processes linked together today. Contingency processing becomes a requirement much like it does in Brazil, so that your organization can ship even if the SAT systems go down.
• Paper: companies can continue to use paper as long as their annual revenue is less than 2,000,000 pesos. If annual revenue greater than this, then they must use electronic CFDI process.  Amount of each individual invoice no longer matters.
• Account Number:  emisor are expected to know and report the last 4 digits of the account numbers that their customers use for payment.  This is highly impractical to implement because suppliers rarely know what bank accounts their customers will use to pay in advance.  The SAT is researching how to implement this and may try strategies like using “special generic numbers” for those cases when emisor does not know in advance.
• Fiscal Address: the street and address will no longer be required, but the country, state and postal code still will.
• Installment Payments:  For installment payments, the emisor must send an invoice for each payment, plus an “informational” invoice to document the entire amount.  All invoices should be signed and sealed, and the UUID of the informational invoice (along with the date and total amount) should be referenced on each payment message.  (SAT needs to define how to tag or mark the informational invoice so that taxes are not double counted, but current thinking is that the “first” invoice transmitted will be considered the informational message. Also, since each “child” payment message will contain the reference numbers of the original parent invoice, they should be able to identify this way).

If you have any questions, please let me know.  I know a lot of experts!

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Kevin Benedict, EDI and e-Invoicing Veteran, Consultant, Speaker and Writer

Follow me on Twitter @b2b_benedict

Join the SAP EDI and e-Invoicing group on Linkedin

Full Disclosure: I am an independent consultant and blogger. I work with and have worked with many of the companies mentioned in my articles.

SAP Brazil Nota Fiscal 2012 - More Changes to Inbound Invoice Process

The SEFAZ (Brazilian Tax Agency) is expanding the NF-e scope using an Event Orchestration Model for processing of inbound invoices.  Earlier in 2012, the announcement was made that both transportation invoices as well as inbound NFe information would have to be stored in your back-end system of record. Additionally, the signing attributes associated with those validated invoices would have to be included on your monthly SPED reports to the government.  However, this new change to event orchestration is one of the largest in recent history and is expected to be phased in over time.  

The ENCAT which manages the technical infrastructure for the government has announced that the testing system for this process will be live in the August 2012 time frame.

What does this really mean?  The SEFAZ will act as a mediator between parties to insure accuracy of NF-e.  This greatly expands the importance of the reception process.

In recent conversations with Scott Lewin, Invoiceware International, a cloud provider of Latin American e-Invoicing compliance, there are two reasons why the reception process is expanding:

1. Ghost Transactions: Unscrupulous suppliers creating “ghost” transactions at end of month using CNPJ number of existing customers without their awareness.  Transactions are then canceled later without consequence to the sending party.
2. Incorrect Paper CC:  Corrupted data created when customers use paper based “correction notices” (CC) to adjust NFe’s created incorrectly in the first place.  Such adjustments are often performed incorrectly, changing values that are not allowed without cancelling and re-issuing a new NFE.

The SEFAZ is creating a Two Way Process Orchestration via NFE “events.”

• NFE must be acknowledged by the receiving CNPJ (Tax ID in Brazil) through event posted back to SEFAZ.
• NFE must be acknowledged back within 180 days initially, and eventually before shipment as roll-out progresses.
• Greater burden on receiving CNPJ, but many large receiving CNPJ are pushing for these changes to guard against ghost transactions in the first place.
• Solution very similar to Excise Movement & Control System for Alcohol/Tobacco/Energy within Europe.
• This process will have an effect on the configuration of your SAP R/3 system, so ensure you know how you will deal with these upcoming changes.

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Kevin Benedict, EDI and e-Invoicing Veteran, Consultant, Speaker and Writer

Follow me on Twitter @b2b_benedict

Join the SAP EDI and e-Invoicing group on Linkedin

Full Disclosure: I am an independent consultant and blogger. I work with and have worked with many of the companies mentioned in my articles.

SAP Brazil Nota Fiscal 2012 (SAP NF-e 2.0) – Compliance is Complex and Requires SAP Configuration

Readers should be aware that complying with Brazil’s Nota Fiscal legislation is much more complicated than just creating a few XML integration points. I was reminded of this from a recent press release from Invoiceware International, Packaged SAP® Services for Brazil Nota Fiscal Compliance where they released SAP Nota Fiscal services to solve the big 3 problems with compliance – Localization, SPED and sending/receiving digital Nota Fiscals.  

In conversations with others in the industry, the implementation of SAP in Brazil is one of the most complex in the world, if not the most complex. So be sure you understand the following in detail because you can’t just install a few OSS notes to comply with Brazil. You need deep expertise from those that have done this before. Often, those in charge of the SAP Global Template for their company, which is a huge undertaking, don’t fully recognize the complexity of the process.  Here are the 3 key areas where you need to look for guidance:

1. SAP ERP Localization for Brazil compliance – there are many OSS notes that you need to look at and install. If you are not on the most current version of SAP ECC 6.0, then I have seen companies that would need to install upwards of 300 notes to get their system compliant.  It is critical to understand your local needs in Brazil, as well as align them with the upgrade policy and change management policy of the SAP global template. These are often miscommunicated, and there are also alternative solutions to major upgrades.  The local teams can get the solutions they need without having a large impact on their global SAP roll out or template.
2. SPED Compliance - Under the Brazilian Federal Revenue Office’s administration, the objectives of SPED are to integrate the action of the tax authorities by sharing accounting and tax information, thus expediting the identification of tax offenses by cross checking the tax returns submitted by taxpayers with their accounting records. This process, once your system is localized, requires the production of reports that are complicated and very specific. SPED Report examples include: SPED PIS/COFINS, EFD FISCAL SPED, SPED CONTÁBIL.
3. Nota Fiscal Eletronica - regulations covered not only physical goods (NF-e), but they also covered service invoices (NFS-e) and logistic invoices (CTe) making the implementation for global organizations even more complex.  For SAP users, there are solutions that are in-house that you need to manage (i.e. SAP GRC Nota Fiscal) as well as multi-country on-demand providers such as Invoiceware International with their SAP compliance dashboards, and a host of local solutions that don’t have the tightly integrated processes internally to SAP like both Invoiceware International and SAP AG.

As you are looking at e-invoicing solutions, be sure to fully understand the issues created as you transition your business and SAP systems in Brazil.  Also, be sure you understand the new NF-e inbound process mandates, and how they relate to SPED reporting starting in April 2012.  This will be the focus of our blog next week. Inbound SAP NF-e processing and requirements.

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Kevin Benedict, EDI and e-Invoicing Veteran, Consultant, Speaker and Writer

Follow me on Twitter @b2b_benedict

Join the SAP EDI and e-Invoicing group on Linkedin

Full Disclosure: I am an independent consultant and blogger. I work with and have worked with many of the companies mentioned in my articles.