e-Invoicing in Chile: a crucial step towards pure B2B
Chile was a pioneer in Latin America, rolling out e-Invoicing in 2003 - initially as an alternative to traditional business transactions on paper - and became the guiding model for countries like Brazil, Mexico, Argentina, Peru and Guatemala. In Europe, the first to implement it worldwide was Spain in 2001.
In his opinion, “It was a gradual process, very well planned and with excellent uptake ever since the outset in 2003. Then, the Internal Revenue Service (SII) saw the need to include those businesses which had not yet adopted the system." For Deik, “To the Government, electronic invoicing represents more precise control of business movements and prevents tax evasion", estimated at US$700 million.
The benefits are many, adds Deik: “The best-known advantages have to do with cost savings and associated times. But there are others just as important, such as the advent of pure e-commerce, which allows the country as a whole to progress en masse towards e-commerce.”
Fully comprehensive e-invoicing opens up a series of opportunities for other businesses, which previous were not feasible. B2B procurement portals will be more efficient and reliable, with a fully electronic cycle (online billing and collection).
“The growth of e-commerce in intangible services is bound to be highly favoured, such as purchasing an Internet domain or digital elements (photos, videos). The next steps will be: electronic IOUs, electronic contracts (firm-worker or business to business), ultimately a world of its own, with new ways to operate in a digital economy”, explains Deik.
Other tools, such as biometrics or advanced e-signature for tax purposes - the latter two also driven by the Chilean Ministry of Economic Affairs - are applications which, in view of their benefits, will lead to an improvement in transactions between businesses and their customers, in the management and monitoring of risk prevention processes.
As for Chile’s competitive edge in the international arena, the ACTI Chairman adds: “It depends on several factors, as the tax regimes are not uniform, so the value of the electronic invoice does not have a direct value between systems. Nevertheless, the distribution and sending of DTEs (Electronic Tax Document / e-Invoices) involves a large number of efficient processes that will enhance the performance of our export-oriented businesses.”
For those not yet certified with the IRS (SII) as electronic invoicing issuers, it must be emphasised that the rollout of an electronic billing platform takes on average around 3 months and “depends on the internal systems to be aligned, the complexity of the billing system and volume of documents, among other variables", notes Deik. He also issues an “urgent appeal to businesses not yet implementing the system to do so. It is a useful tool for the entrepreneur and for Government, which is why we, as an Association, believe that it is a measure that brings value to the country.”
Overview of the Law
On November 1, Law N°20.727 comes into force in Chile, making it mandatory to issue five electronic documents for tax purposes (DTE): Bills, purchase invoices, invoice payments and credit and debit notes. The remaining DTEs (Electronic Tax Documents), such as waybills, despatch advices or delivery notes and receipts for sales and services can be issued in electronic format or on paper, as the taxpayer wishes. However, companies can hire a platform such as EDICOM to provide the full cycle of DTE issuance and reception.