SAP e-Invoicing – Mexico CFDI and the Complexity in Changes
On January 1, 2011, Mexico began requiring companies to integrate with the Mexico Tax Authority (SAT) for real-time issuance and approval of electronic invoices. Non-compliance with Mexico’s Servicio de Administración Tributaria (SAT), is the same as tax fraud and means not only heavy fines, but potential criminal charges and jail time for the responsible executives. With these severe penalties, organizations must ensure that their process is valid as well as their accounting systems.
In the constantly changing environment, your organization needs a simple way to not only keep up with the changing legislation, but also, an easier way to ensure they are implemented into your ERP processes in a timely and legal manner. This article covers the key topics outlined in the 2011 and 2012 CFDI v3.2 legislation.
Don’t forget, there is NEW LEGISLATION IN 2012, see below for the additions and changes from 2011.
2011 – Mexico Mandates
- 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.
- 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
- 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.
- 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.
- Annex 1-A: Declaration forms/statements prepared as part of registration process.
- 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.
- 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.
- 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.
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.
- 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).