Argentina Electronic Invoicing and Reporting Requirements INVOICEWARE INTERNATIONAL Global Compliance - Simplified
Argentina Electronic Invoicing and Reporting Requirements
INVOICEWARE INTERNATIONALGlobal Compliance - Simplified
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Background
Legal requirements for invoicing are changing in Argentina. The Administración Federal de IngresosPúblicos (AFIP) announced that all companies doing business with VAT related invoices in Argentina will have to issue electronic documents starting July 1, 2015 (RG 3749).
While they are mandatory for some industries, others are still receiving future timelines from the Argentinean tax authority Administración Federal de Ingresos Públicos (AFIP). Over 300,000 transition during 2014 to electronic invoicing. Today organizations need to consider solutions for Type E export invoices, as well as the regulations for domestic (Type A and Type B) invoices.
In 2016 there will be changes to the libros reports to achieve Proforma VAT across Argentina.
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Tax Authorities Control an End To End ProcessGovernment standardized XML linked to VAT Tax reporting = Real Time Audits
Supplier Registers XML
Government XML Standard Only Legal document Registers VAT Tax Obligation
PDF Accompanies Truck
Copy of Invoice OR Signed Shipping Document
depending on country
VAT Tax Linked to XML
Buyer only able to take VAT tax credits that are linked to approval codes in supplier XML
Errors or corrections are the buyer’s issue to get fixed
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Governments: Constantly Changing & AcceleratingFrom 3 to 10 Countries in less than 2 Years, More Business Processes Affected
2013 2014 2015-2016
AR eInvoicing
AR eInvoicing
AR eInvoicingAP eInvoicingFreight InvoicesSPED ECD
AR eInvoicingAP eInvoicingNominaeContabilidad
AR eInvoicingProforma VAT
AR eInvoicingAP eInvoicingFreight InvoicesSPED ECDSPED ECFeSocial
AR eInvoicingAP eInvoicingLibros Reports
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Solution RequirementsSimplify Complexity Today, Manage Change in the Future
Cash, Compliance & CostEfficiency & Stability
CFO
ObjectivesHow do I automate processes with
my customers and suppliers?
How do I streamline transparency of
reporting & cash flow?
Efficiency On-time delivery
Lower Inbound Receiving costs
Accurate tax reporting & IVA Credits
Complete audit trails
Cost Employee productivity
Cost and time of shutdowns
Tax penalties, missed deductions
Cost of closing books monthly
Flexibility Automated Contingency in place
Process workflows
Working capital optimization
SAP as single system of record
IT Consolidation
Chief Information Officer
How do I provide value with fewer
systems and lower costs of upgrades?
Effort build, integrate, and maintainSAP & multiple country solutions
Staff, Solutions, Infrastructure
Annual upgrades & consulting
Stable budgeting vs. fire drill projects
Buffer SAP from change
VP Supply Chain
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Multiple Solutions• Local country solutions
• Middleware interfaces
• SAP ERP updates
SAP not System of Record• Data is changed in 3rd party
tools not in SAP ERP
Who Supports?• Search & Rescue Missions
Who Maintains?• Alignment with SAP ERP –
global regression testing?
• Ongoing knowledge of what was done and what needs to be done
IT – Traditional Approach is CostlyMultiple Solutions, Constant Upgrades
SAP
ERP
Middleware
Integrate the
System
Different
Solutions for
Each Country
CUSTOMER
IDOC1
2
3
4
5
Monitor #1 Monitor #2 Monitor #3-6
Who
Supports
Who
Supports
Who
Supports
6
7
8
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IT – Financial Accuracy Equals Cash FlowVAT Remittances & Working Capital Issues
Working Capital Optimization• Accurate invoicing equates to lower DSO & less returns
• VAT tax obligations & deductions equal millions for multinationals
• Transform mandated compliance into Supply Chain Financing opportunities
Financial Reporting Accuracy - VAT
VAT obligations in Latin America – 16-22% of goods sold
Brazil VAT – based on physical movement of goods which means can owe even before you collect from your end customer
VAT Credits/Deductions must be linked to supplier’s registered XML
Finance Penalties – Local and FCPA for US Public Companies• Mexico - $3,000 per event (i.e. transaction) plus denial of deductions
• Brazil -75% to 150% of tax values - $50 Million dollar Chem business fined $3 Million by SEFAZ for deduction issues (page 30 of 10K)
• Foreign Corrupt Practices Act – SEC fines CPG company 4.2 Million of Mexico invoices issues; High Tech company FCPA issues approach $108 Million
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Supply Chain – Business Impact is SubstantialMission Critical Timing & End User Productivity
Invoicing Can Shut Down Operations
Government approved documents are needed to ship legally. Built in back up processes ensure you can always ship.
Level 1 - On Network Contingency
Level 2 – On Premise Contingency
Automatic Reconciliation to get invoice registered when systems back on line
Standardization can drive down costs
Use XML Invoice and PDF on trucks to lower cost in inbound receiving
Automated Purchase Order – Invoice matching before the truck arrives
Eliminate data entry at warehouse by scanning the PDF for data entry
Manage discrepancies and trigger government processes (return orders, gov’t status messages)
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Argentina e-Invoicing Business Process Overview
AFIP XML
Subset of Invoice Data(total amount, tax amount,
Sending party, Receiving Party)
CAE + Expiration Date
PDF or XML via Mail or electronically via FTP, email, etc.
Digital Certificate
CertifyingEntity Argentina
Vendor
AFIP
Buyer
4
2
1 5
3
Archive
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Argentina 2015
AFIP Invoicing
All B2B, B2C, and Export Invoices required
COTS – Remitto – city level integration that affects shipping
Removing “sin detail” XML from the system. Argentina is slowly moving away from invoices without line item level information
Inbound processing – web service for buyer side validation exists, expect mid-summer enforcement
Issues that many will have
Dynamic Sequencing – of invoices in Argentina are done in batch. If you send 1000 invoices and invoice #2 fails, the other 998 won’t process. Need automatic resequencing when this happens
Shipping – Type E you need the invoice on the truck and many will require Remitto based on city (i.e. Buenes Aires) to ship domestically
Ensure you have ability to do back up paper contingency automatically
Ensure you have approval code from gov’t before you post an invoice to G/L
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Invoiceware InternationalBusiness-to-Government Compliance Suite for SAP
Latin America Regional Platform
• Brazil, Mexico, Chile, Argentina, Peru, Ecuador, Uruguay & Colombia
SAP System of Record
• SAP sole system of record
• Single user interface inside SAP
Process Automation
• Automated Contingency – always be able to ship
• Lower Inbound Receiving & AP Costs
• Transactions & Reports are fully integrated
• Working Capital Optimization solutions
End to End Support
• End to End support in Portuguese, Spanish and English whether SAP issue or gov’t issues
Fixed Fee - Change Management
• All maintenance is covered by fixed cost annual fee (software & labor included)
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Resources Click the links below for more information
Learn more about Argentina requirements
Top 5 Mistakes During SAP Rollouts To Latin America
Argentina AFIP mandates checklist
Want to stay up to date on compliance in Latin America?Subscribe to our blog today.
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Next Steps Contact Us To Learn More
+ 1800 – 988 – 0728www.invoicewareint.com