Below is an update to our previous blog on Uruguay as the Tax Authorities (DGI) announced last month new requirements for electronic invoicing according to the Resolution 3012/2015.
- All taxpayers whose revenue in 2015 is equal to or greater than ~$3.1M USD (UI 30,000,000) are required to start invoicing electronically as of June 1st, 2016
- Additionally taxpayers whose revenue in 2015 is equal to or greater than ~$1.5M USD (UI 15,000,000) are required to start electronic invoicing by December 1st, 2016.
This mandate represents a more structured approach for Uruguay. Previously, the DGI would send a personal letter to companies mandating each to go live in approximately 6 months.
E-invoicing has become a requirement for companies operating in Latin America and it has become the standard of doing business. What started in Brazil in 2007 has quickly expanded across the region, with Peru and Uruguay being the latest ones to enforce new mandates. The main reason why the governments are enforcing these changes is to reduce tax evasion. According to Joaquin Serra, the Director of the DGI, there has been “33.3% IVA evasion in 2005 to 10% in 2014.” The governments are starting to realize the return on investment in these processes and they are only going to get more stringent.
Previously, we explored the commonalities between these regulations, including their purpose – increasing tax revenues by enforcing compliance. Now, let’s take a closer look at the requirements specific to Uruguay.
The project of electronic invoicing in Uruguay started in 2011 with 8 companies and was mandated for certain groups in 2012 with the Resolution 789/2012. The big difference between than and now is that before the DGI would notify certain companies via a certified letter and an email that they needed to comply with electronic invoicing at a certain date – normally within 6 months. Now the DGI esablished who needs to comply based on revenue and every company who meets the requirements need to comply to avoid penalties and business interuptions by the Uruguayn tax authorities.
Key requirements in Uruguay include:
- Accounts receivable: Invoices must be sent to the Dirección General Impositiva (DGI), Uruguay’s tax authority, and must be approved with an acknowledgement of receipt (Acuse de Recibo).
- Accounts payable: When receiving invoices, you must check the validation of all of the fields with the DGI.
- Certification process: Each company’s compliance process, including invoice submissions and approvals, must be tested and certified before beginning e-invoicing.
- Contingency: Contingency processes are required to report and submit all documents during system outages.
- Storage: Files must be archived for 2-5 years, depending of the type of document.
Your compliance solution in Uruguay should not only meet the requirements in this country, but should integrate seamlessly within your existing systems. Here are the top five questions to consider as you evaluate solutions.
1) Since these regulations change frequently, does the solution support change management at a single fixed fee? Or, will each change require a significant investment?
2) Does the solution offer both online and offline contingency processes?
3) Does the system work within your existing ERP processes? Or, does it require external systems that ultimately risk data manipulation and visibility gaps?
4) Does the solution offer one end-to-end platform for all of the requirements in Uruguay, including e-invoicing, receivables, payables, transit and reporting? Or, are you maintaining multiple systems?
5) Does your solution offer 24/7 local and English language support?
Managing compliance in Latin America is no easy task, and only continues to get more challenging as the regulations spread throughout the region. It’s important that your compliance partner is proactive, ensuring that you are making the most of your solution and staying ahead of new mandates to avoid penalties and improve business processes. Download the checklist of mandates for Uruguay. (updated August 26, 2015 to include the most recent mandates).
Want to learn more about the latest mandate in Uruguay? Please contact us to discuss how this latest mandate may impact your operations in Uruguay and how Invoiceware International may be able to help you identify potential risks and process gaps.