Ecuador is among several countries in Latin America enacting and expanding e-invoicing legislation in 2015. The mandates in each country share similarities in purpose (boosting government revenues by decreasing tax inaccuracies and increasing fines and penalties) and scope (impacting accounts payable, accounts receivable, logistics, tax reporting and IT infrastructure). However, their differences are significant enough to require a dedicated focus
Ecuador’s tax authority, Servicio de Rentas Internas (SRI), designated special taxpayers that had to begin complying with e-invoicing regulations for any invoice totaling $4 USD or more at the beginning of 2015. The SRI is expected to continue to expand the list of companies covered under this legislation over the next 18 months.to ensuring proper compliance in every Latin American country in which you operate.
Key requirements in Ecuador include:
Accounts Receivable: Invoices greater than or equal to $4 USD must be approved by the SRI before transmission.
Shipping: The SRI-approved invoice must physically accompany all shipments.
Accounts Payable: When receiving invoices from suppliers, it’s mandatory that you validate the invoice via the SRI Web Portal.
Certification: Mandated companies must go through a testing and production process to ensure compliance.
Contingency: Companies must have contingency systems in place to manage compli
ance when the online systems are unavailable due to updates and maintenance.
Storage: Required documents must be archived for 7 years.
As more countries in Latin America expand regulations to affect more businesses, it’s important that you consider compliance strategically from a regional perspective. Below are five questions to discuss as you evaluate compliance solutions for Ecuador.
1) Are ERP adjustments required, or does your solution provide all of the data extraction and extensions needed?
2) Does your solution provide corporate visibility into transactions, or is there room for data manipulation?
3) Does your system automatically archive required documents, or is manual storage required?
4) Does your compliance partner upgrade its system to comply with each new government mandate automatically, or will you require a separate solution (and investment) for each change?
5) How will you identify system errors? Is there one key point of contact, or do you have to conduct search and rescue missions among your IT team, software and middleware providers, your ERP, etc.?
Compliance in Ecuador, just like in the rest of Latin America, has serious business implications that go beyond the transmission of e-invoices. It’s important that your Latin American e-invoicing partner realize that any issues can shut down your business and severely affect your bottom line and work with you to ensure seamless compliance.