2021 Compliance Roadmap: Central America, Mexico and The Carribbean
Mexico, Central America, and the Caribbean make up a heterogeneous group of countries that have pursued different strategies to achieve digital transformation in their economies. However, "This is a region that, in terms of tax innovation and digital transformation, is an international benchmark," says Javier Romero, Mexico and Central America Sales Director at EDICOM.
Mexico’s digital economy is one of the most advanced in the Americas. The success of the CFDI (Digital Tax Receipts via Internet) system has made the country a regional leader in tax digitization, e-accounting, electronic archiving, and the use of digital signatures.
As part of its commitment to innovation, Mexico is expected to advance even further in the use of new technologies for tax compliance this year. In fact, "the tax authority itself is seeking to strengthen its digital reach with the creation and use of new complements, such as the Waybill Complement for transportation of goods in Mexico, whether by land, air or sea. Also in use is the Hydrocarbons Complement, which incorporates more information into the invoice, including costs, expenses, investments made, and income from those activities," says Ramiro Garduño, Mexico Sales Manager at EDICOM.
Like Mexico, Costa Rica benefits from a consolidated electronic tax system that is constantly updated for optimization. Following two years of discussion and work, the government plans to publish a new version of its electronic invoice format this year. Also in scope is the consolidation of the Catalog of Goods and Services (CAByS) for issuing electronic receipts.
Continuing with Central America and the Caribbean, Guatemala will complete the implementation of its new Online Invoicing System (FEL) this year, incorporating all taxpayers. The Dominican Republic and Panama will begin the voluntary phase of their electronic invoicing rollout this year. In Panama, the DGI has introduced the role of a Qualified Authorization Provider (PAC), which "will allow for widespread voluntary adoption without having to make a significant investment to serve large taxpayers," points out Christian Colin, Central America & Caribbean Sales Manager at EDICOM.
But the country that will undoubtedly experience the most changes in e-compliance this year is El Salvador. It has announced its intention to implement e-invoicing by requiring companies working in the country to adapt to the new system. To comply, it is important that businesses "look for a supplier with experience in these processes, providing the security of a long-term relationship and confidentiality standards that allow them to feel secure in sharing their information. A technical team that is responsible for all the services involved and is committed by contract to give them excellent service should also be part of their selection criteria," recommends Colin.
2021 follows a prolific era of new tax legislation in the region. The implementation of electronic invoicing systems and other electronic tax instruments is spurred by the many advantages of a digital economy. The great challenge for companies will be adapting to all these changes, especially those with a multinational presence. "Perhaps one of the most important challenges is implementing technologies that are capable of meeting local needs as well as corporate ones. Businesses will need an internal management system that can comply with cross-corporate policies as well as local laws and regulations. Electronic invoicing is an example of the disparity between regional models. Companies with operations in different countries must ensure that they are accompanied by suppliers that can simplify its transnational operations and minimize impact on internal systems," asserts Romero, Mexico and Central America Sales Director at EDICOM.
To address this challenge, EDICOM works to provide centralized solutions capable of integrating with all internal applications. EDICOM solutions automate the exchange of information between all stakeholders, including internal interlocutors, tax authorities, suppliers, and customers. As Colin says, "We work daily to meet the tax compliance needs of our customers around the world. These projects have led us to develop certified, legal, and remote signature services that allow for the automation of other business processes. They require us to store data according to standards that guarantee their legal validity."