An update on e-invoicing in Mexico

Mexico is one of the most advanced countries for the adoption of e-Invoicing and its regulations continue to evolve rapidly. To help you keep on top of the latest developments, we spent some time with Benito Celorio, CEO at Buzón E, our e-Invoicing partner in Mexico, and Vice President at AMEXIPAC, the country’s association for service providers (PACs).

They discussed how companies are responding to the coming deadline to start adopting CFDI invoices, how the government is helping small businesses and is developing CFDIs further. 

Tungsten Network: On 1 January 2014, companies will no longer be able to generate their own electronic invoices (CFDs) and will have to send CFDI invoices through an accredited service provider. How is the market responding?

Benito Celorio: As you may recall, there are 320,000 small enterprise taxpayers that are using paper invoices with a bi-dimensional bar code (which we call CBB) and 170,000 medium-to-large company taxpayers that are using self-generated e-Invoices (CFD). They will have to migrate to the CFDI format by the end of the year.

According to statistics from the government’s Tax Administration Service (SAT), by the end of August only 25,000 (yes – only 5%) companies had made the change. Taxpayers have some hope that this mandate will be postponed and doubts about the migration, its cost and how the SAT will use all this information.

Mexican President, Peña Nieto, recently proposed to the Chambers changes to the Federal Tax Laws. The initiative makes it clear that the government intends to move quickly to internet-based audits and that there will be no delay. This not only confirms the migration to CFDI, but also removes any reference to alternative formats.

Tungsten Network How does the government plan to help small business create CFDI invoices?

Benito: As part of the requirements to become an Authorized Certification Provider (PAC), each PAC has to offer a free application to create CFDI invoices over web portals. There is also an option at the SAT web portal.  Additionally, in August this year, SAT launched a national contest to design a mobile application that could provide the SAT service over mobile phones, including e-Invoices. SAT’s chief recommended to AMEXIPAC members to create similar mobile applications to facilitate compliance to small business and independent professionals.

It also announced the ‘Buzón Tributario’, the fiscal inbox portal that features enhanced tools to help small, tax-paying organisations communicate with the SAT and check their e-Invoices. Every Mexican citizen older than 18 years will be incorporated to the Federal Taxpayer Register and will have a “Buzón Tributario” to communicate with SAT.

Tungsten Network: Are there plans to extend the use of CFDI invoices after 1 January?

Benito: A couple of months ago SAT started to generate ‘pay slips’ in a CFDI format for its own employees. We have had it confirmed that, as early as next year, companies may have to submit a CFDI for each employee to deduct payroll from your income.

AMEXIPAC is working with SAT to incorporate a ‘payroll report’ to the CFDI schema. The plan is to extend the use of CFDI to all other formats and fiscal documents.

Tungsten Network:  What are the latest developments from AMEXIPAC?

Benito: Having celebrated its first anniversary, the association held elections for the Steering Committee. Among the results I was named as one of two Vice Presidents. We also formed two new task-specific groups on interconnectivity between members. One group will take on the challenge to create a business continuity process to support taxpayers in case one of the PACs has a major disaster in its operation. The other group is dealing with the commercial aspects of interoperability, in particular, the distribution of e-Invoices and the standardisation of industry specific addenda.

We are also planning to participate in EESPA’s annual event in Brussels in November to share the Mexican model with the European Commission officials and learn from the European e-Invoicing experience.