Nov. 1 was a noteworthy day for much of Latin America, celebrated chiefly in Mexico but many other cultures. The rituals, celebrants take part in, trace back thousands of years, all of which pay tribute to the lives of the dearly departed. But in the Latin American business world, specifically in Chile, Nov. 1 was a day to remember for regulatory reasons.
In short, e-invoices went from being recommended to required.
The paper invoicing process ended on the first day of November in Chile for companies that do more than 100,000 UF (~$4.2 million) in annual businesses. Meaning that all large firms that have gone about invoicing the old-fashioned way upgraded to electronic.
So the question on everyone's mind is -- What next?
There have been a number of announcements pushing back the mandates for small businesses especially in rural areas, but multinationals should not let this blur the realities that face their organizations in the coming months. Corporations should focus their attention on potential tightening of the regulations because if we have learned anything about Latin America - it is - the tax authorities are constantly evolving their fiscal policies and their e-invoicing mandates with a focus on their largest sources of revenue - multinational corporations.
Key areas to keep an eye on include
- Reports are due to the government each month
At the conclusion of every month, business owner are required to produce compliance reports (Libros), which they can upload to the Chilean government's website. These reports should summarize the DTE transactions that were executed during the previous 30 to 31 days, whichever applies. DTE, if you don't already know, stands for Documentos Tributarios Electronicos. There are about a dozen of these document types. Many companies have overlooked the fact that the reports are tied to the DTE validations of the SII. And that the validations are returned via two separate emails from the SII. Many companies have not integrated these status checks in their reporting extractions and risk producing Libros reports off of data that was never recognized by the SII during the original transaction.
- Validation results will strengthen
It should be expected that the "Aprobación con Reparos" could turn into hard denials in the future. Often as governments move past the initial implementation date, they start to strengthen the validations and complexities. Look for potential changes in the laws after the first 6 months of operations.
- Inbound validations could be required
During the implementation phase companies needed to register their email address where XML invoices would be sent by their suppliers. Web services exist for the inbound validation already and part of the readiness declaration included the testing of these scenarios. Like Brazil and Mexico, you should be prepared to deal with future inbound mandates where by the buyer will have to do a secondary validation of the received XML.
These are just a handful of the rules and regulations to be prepared for with the e-invoicing mandate now in effect for multinational in Chile.