The electronic invoice in Chile
The electronic invoicing system in Chile is well-established. Since February 1, 2018, in compliance with Law No. 20.727, all companies in the country are required to issue their tax documents electronically, with tax documents issued on paper being legally invalid. The Internal Revenue Service (SII), the entity that regulates fiscal control in Chile, provides different invoicing systems for companies.
- Evolution of electronic invoicing in Chile
- Parties and functionality of electronic invoicing in Chile
- Available electronic invoicing systems in Chile
- Types of Electronic Tax Documents (DTE)
- Claim or acceptance of invoices
- Control of invoices declared to the SII and not received by taxpayers
- Electronic dispatch advice
- Conservation of DTEs
- Electronic receipt
- EDICOM's Global Electronic Invoice Solution
Evolution of electronic invoicing in Chile
Chile began its process of implementing electronic invoicing in 2003 when the Internal Revenue Service (SII) initiated the voluntary adoption of the system for all taxpayers who wished to participate.
In 2014, Law No. 20.727 established the mandatory use of electronic invoicing in Chile, with a progressive obligation period from the law's entry into force on January 31, 2014. During this time, physical or paper documents were replaced by different Electronic Tax Documents (DTE) provided for by the legislation: Invoices, Credit Notes, Debit Notes, Dispatch Advice, Purchase Invoices, and Exempt Invoices.
Parties and functionality of electronic invoicing in Chile
Electronic invoicing is mandatory for 100% of companies in Chile. Being an electronic invoicing party enables the taxpayer to be an issuer and receiver of Electronic Tax Documents (DTE).
The SII enables electronic invoicing and provides different electronic invoicing systems to taxpayers.
Companies send DTE’s to the SII in real-time through the chosen invoicing system for validation. Once validated, the tax agency returns them to the issuer, who then sends them to the final recipient via email in the XML_DTE format.
The recipient of the electronic invoice has eight days to accept or dispute the invoice. If no receipt acknowledgement is generated within that period, the SII formally considers them accepted.
Available electronic invoicing systems in Chile
The SII offers different electronic invoicing systems to taxpayers based on the volume of invoicing of the companies.
- The SII's Free Invoicing System aims to provide taxpayers with a system that allows them to operate with electronic invoices and comply with current legal regulations. It does not integrate with the taxpayer's software applications, meaning it operates through the SII platform and only with the documents made available there, such as invoices, credit and debit notes, dispatch advice, and purchase invoices. It is designed for low volume issuance of Electronic Tax Documents (DTEs) and documents are issued one at a time.
- Proprietary or Provider’s Invoicing System. Taxpayers can develop their own software or purchase a system on the market that enables them to operate with electronic invoicing. It supports high volume issuance of DTEs and allows the issuance of invoices, credit and debit notes, dispatch advice, purchase and export invoices, export credit and debit notes, invoice settlements, taxable receipts, among others. It is integrable with other software systems used by the company, such as ERP or Business Management Software, among others.
Types of Electronic Tax Documents (DTE)
There are different types of Electronic Tax Documents (DTE) that provide tax and legal support for each commercial operation, for both the issuer and the recipient.
The tax documents that the law requires to be issued in electronic format are: Invoices, Non-Taxable or Exempt Invoices, Purchase Invoices, Invoice Settlements, Debit Notes, Credit Notes, Dispatch Advice, Export Invoices, Export Credit Notes, and Export Debit Notes.
- Electronic Invoice: A tax document generated electronically that replaces the physical document, which has the same legal value, and its issuance must be authorized by the SII beforehand. It details the products or services sold, payment method, and unit price.
- Non-Taxable or Exempt Sales and Services Invoice: A document generated for tax-exempt operations, mainly for VAT.
- Electronic Purchase Invoice: Legal support for a purchase, issued in the following situations:
- When the electronic issuer is an authorized withholding agent for the Change of Subject of the VAT and carries out transactions in which it is obliged to withhold part or all the VAT.
- When the electronic issuer carries out taxable transactions with sellers or service providers indicated in Exempt Resolution No. 1496 of 1976, who do not have tax documentation.
- Electronic Dispatch Advice: Tax documents that must be issued by law when an invoice is not issued at the time of delivery of goods or merchandise. The dispatch advice verifies and justifies the delivery of the goods by the seller and the reception by the recipient. The dispatch advice must be numbered and stamped by the Chilean SII. The subsequent invoice must indicate the dispatch advice number as required by the legislation.
- Electronic Invoice Settlement: A tax document that merges the sales settlement emanating from a consignment contract and the billing of the commission agreed between the consignor and the consignee, in accordance with Circular No. 126 of 1977.
- Electronic Credit Note: A document to void or correct an already issued invoice.
- Electronic Debit Note: A document that sellers and service providers must issue when there are changes in the amount of the original invoice.
- Electronic Export Invoice: Documents of different nature regarding VAT and different electronic schema validations than the electronic invoice. It allows including data that are not applicable to the electronic invoice, such as entering amounts in foreign currency, identifying the means of transport and the transport company, the port of embarkation and disembarkation, the sales modality, among others.
- Electronic Export Credit Note: A document generated to void or modify export invoices.
- Electronic Export Debit Note: A document generated when there are changes in the amount of the original export invoice.
Every electronic tax document that is issued must contain a digital electronic signature, which allows authenticating its origin and ensuring its integrity.
Claim or acceptance of invoices
There are reasons why an invoice can be claimed: if the amount is not satisfactory, if the delivery is not satisfactory, if the merchandise has arrived in poor condition, etc.
In Chile, electronic invoices can be claimed by the recipient within a maximum period of 7 days from their receipt by the SII. Once the 7 days have elapsed without any action being taken on the electronic document, it will be understood that the invoice has been irrevocably accepted.
Since the acceptance or claim of the electronic invoice is information that is sent only to the SII, the tax agency has enabled a system to consult the information on those claimed invoices. Thanks to this control, the issuer can have full knowledge of what is happening with their electronic invoices.
Control of invoices declared to the SII and not received by taxpayers
It may be the case that there are customers who have not received invoices from their providers, so these companies cannot review and verify the data. If the 7-day deadline for claiming has expired, the SII automatically validates the invoice and includes it in the F29 proposal for VAT declaration. Obviously, any discrepancies between the data and the SII will lead to discrepancies in Form 29.
To solve this problem, it is necessary to have an electronic invoice solution capable of detecting any inconsistencies between Form 29, and the DTE received through a daily and automated comparison of the invoices issued by the providers to the SII.
EDICOM's solution cross-references invoice information in the client's ERP with the information on invoices received by the SII to verify that they match. If a discrepancy is detected, i.e., an invoice is found in the SII but not in the ERP, an alert is issued. The system notifies the provider to send the DTE not received within 24 hours. If the DTE is not sent within this time, the system automatically claims the electronic invoice from the SII, which results in its rejection.
Electronic dispatch advice
Dispatch advice are tax documents that must be issued when an invoice is not issued at the time of delivery of goods or merchandise. Dispatch advices are electronic documents that verify and justify the delivery of the merchandise by the seller and the receipt by the recipient.
Dispatch advices must be numbered and stamped by the Chile SII. The invoice that is subsequently issued must indicate the dispatch advice number as required by law.
The maximum deadline for issuing the invoice from the dispatch advice is the tenth day of the following month after the merchandise has been delivered, but with a maximum date of the last day of the previous month.
Conservation of DTEs
DTEs (Electronic Tax Documents) must be kept for six years, considering the following situations:
- They must be generated and stored by the electronic issuer in XML format (authorized by the SII). The taxpayer must have the possibility of accessing the stored information to respond to any request from the SII. The electronic documents issued constitute the accounting backup.
- The electronic recipient will receive the DTE in XML format through the electronic means agreed with the issuer (currently email) and must use this document to support their accounting information.
- If the recipient of an Electronic Invoice is not authorized to operate with this type of documentation, that is, a "manual recipient," the document they receive and must keep is the printed version of the Electronic Invoice.
The electronic receipt is the proof of purchase received by the final consumer. It specifies separately the net price, the VAT, and the total cost, as in invoices, which currently was not the case with paper receipts. Each generated electronic receipt must be sent to the SII within a maximum of one hour. In addition to electronic receipts, taxpayers must generate a daily Sales Summary with the operations referred to the immediately preceding day and submit it to the SII electronically signed.
EDICOM's Global Electronic Invoice Solution
EDICOM, as an international electronic invoice provider, has developed a unique platform that facilitates compliance with technical and legal specifications in the different countries where its company operates. In the case of Chile, the system automates the generation, sending, and receipt of Electronic Tax Documents, as well as online communications with the Internal Revenue Service.
The traceability and automation offered by our electronic invoice solution are key to anticipating recurring incidents that occur as a result of different factors that incur in the invoicing system processes in Chile. Thanks to the data cross-referencing between the SII's invoice control service and EDICOM's electronic invoice solution, the client is constantly informed of the status of the issued invoices and supervises the coherence between the received DTEs and the monthly VAT declaration (Form 29).
EDICOM's electronic invoice solution offers total control of the claimed and unreceived invoices that occasionally negatively affect Chilean companies in their accounting and invoicing, thus maximizing the benefits derived from the automated and integrated management of invoices in their company.