Latin America to many Europeans appears to be some sort of paradise (especially for those living above the line Paris and up). Lovely weather, taking a siesta in your hammock with a cocktail in your hand. This is somewhat of a romanticized image, because Latin American governments do not take things lightly. They want to be on top of what is going on, and e-invoicing is no exception.
The European approach is quite different and this is something to keep in mind when dealing with the Latin American e-invoicing process. Below is a top 5 of differences you need to understand.
This post is part of a series of items on electronic invoicing in the Americas, brought to you by InvoiceWare. Please visit the profile page of InvoiceWare for an overview.
E-invoicing is mandatory in many Latin American countries
Yes, governments require electronic invoices in many of the EU countries. (You can check out which countries exactly in this overview). The EU outlines functional requirements if you choose to send an invoice electronically. These functional Lego blocks centre around “authenticity and integrity”. In Latin America, countries like Mexico require you to send a government approved electronic invoice if your organization meets certain criteria. Feel the difference? Functional requirements versus require.
A real-time, fully integrated process is required in Latin America
In countries such as Brazil, this is not just about applying a digital signature to a PDF and sending it to your customer via a portal and in parallel storing it in a long-term archive. These are highly evolved, real-time integrations with the government that can take 20 to 30 seconds for approval.
Approval of e-invoices is linked to the logistics process in certain Latin American countries
In other words, you can’t ship your product from your warehouse until you receive the approvals from the government on your invoice. This can actually take on many forms beyond just your ability to ship. In the worst case, the government can confiscate your truck, the physical goods, and levy very strict financial penalties if the invoice information doesn’t match what is on the truck or what arrives at your customer.
Latin America defines strict process standards
In Brazil, you have Nota Fiscal Eletrônica 2.0 and in Mexico you have CFD v3.2 which clearly outline the XML schema, integration touch points, process, archiving, and printing procedures. Most of the EU regulations will dictate what makes an invoice VAT compliant, but they don’t mandate a specific format like the Brazilian and Mexican governments do.
Latin America e-invoicing will affect your ERP configuration
The solutions required to comply in Brazil, Argentina and Mexico often need specific configurations and localisations to the ERP system before you can even send an electronic invoice. In Brazil, organizations have to ensure that they have not only installed and localized taxes and fiscal information correctly, but they also have to comply with Sistema Público de Escrituração Digital (SPED), reporting requirements.
These 5 differences are only the tip of the iceberg, so keep your eyes and ears open when dealing with Latin American countries and their e-invoicing processes. We hope you will be able to find your way out of the maze and we will try to help you along the way.
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