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Mike -- I can share some information on this requirement that is coming this year for transacting in Mexico. If you need a deeper understanding, I would suggest you reach out to your Client Partner, Marty Melvin, for more information:
Mexico's SAT, their tax authority, released a new set of requirements on May 31st 2013. Here are the highlights of the new changes your organization should be implementing by December 2013.
- Latest news: SAT published new changes last May 31st’13 (http://www.dof.gob.mx/nota_detalle.php?codigo=5300907&fecha=31/05/2013)
- Legacy CFD is sunset and only valid through December 2013
- All companies with revenues over 250,000 Peso (~20K US Dollars) will be required to issue and validate CFDI XML
- Accounts Payable will need to validate supplier XML and archive the XML for 5 years
- Growing adoption pushed by Tax Authority (SAT)
- Taxpayers are required to comply with many obligations:
- Mandatory XML format specified by the SAT.
- Storage period of at least 5 years
- Sellers must make the XML invoice available to the buyer
- Business references are not part of the standard and they are managed through an “Addenda”
Focus on CFDI
•Mexican government continues to implement and push the usage of CFDI despite the fact of 90% e-invoices still fall under the legacy regime of CFD today.
- SAT established a free CFDI portal for the smallest of suppliers at the end of last year
- SAT discontinued the use of Folio's and instead of electing for CFD, made all transition to CFDI
- CFDI legislation was relaxed in Q4 to make it easier to implement CFDI
- As of December 28, 2012, SAT wants companies to archive the XML CFDI invoices for audit purposes - making inbound validation a requirement
- Invoice #, issue date, payment method
- Issuer’s name, Tax ID, address
- Recipient’s name, Tax ID, address
- UUID, Digital seal, 2D barcode
- Description, Unit price, Quantity, UOM, Line amount
- Net value, Tax, Total
•Regulated sections do not include business references but an Addenda section can be inserted to add further information
- An Addenda will be discussed and defined as part of the implementation project
•According to Arts. 108, fracciones I, II y III y 109, fracción VIII del CFF, same penalties as tax fraud.
- Prison from 3 months to 2 years, when the fraud amount does not exceed $1,221,950
- Prison from 2 to 5 years, when the fraud amount is higher than $1,221,950 but not $1,832,920
- Prison from 3 to 9 years when the fraud amount exceeds $ 1,832,920
- 3 months to 6 years when unable to determine the fraud amount.
- It may be reduced up to 50% if the amount is restored immediately in a single payment.