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Comprobante Fiscal Digital por Internet (CFDI) « Online digital tax receipt »

The Online Digital Tax Receipt (or Comprobante Fiscal Digital por Internet) of the Mexican electronic invoicing system is a legally accepted digital tax invoice that your organisation submits to the Mexican tax authority (Servicio de Administración Tributaria [SAT]). Electronic invoices must be secure, confidential, authentic and legally compliant. You must ensure that international standards and national specifications are met.

The document must exist in an XML format as mandated by SAT, the Mexican tax authority. The CFDI includes information such as a tax identification number, description of goods, total invoice amount, taxes due and much more. The shipper must submit a CFDI and then receive a unique number from the government called a UUID. Once the government generates the UUID and validates it with the shipper, the company can ship its goods.

As of 1 January 22, the new CFDI 4.0 is will be used and will introduce the following changes ( * element and attribute are xml format terms):

• A new element* is created which will affect global invoices and B2C invoice summary reports
• The postcode and tax status of the recipient will now be information included in the ICRFC.
• The name will be mandatory and must be validated.
• An attribute* is added for primary sector activities.
• A new attribute* is created to indicate whether the CFDI includes exports.
• An attribute* has also been added to indicate whether it is subject to tax.
• The third party account complement is replaced by a new element.
• Changes are also made to the validation rules.

Method for generating electronic invoices

Invoices are verified and certified by a digital signature service provider (DSP). Before you can use the CFDI method to generate electronic invoices, your organisation must establish a web service connection with an approved PAC. From your ERP, you send an invoice to your EDI provider who maps it to the PAC format. The PAC validates each invoice, assigns a folio number, and incorporates the digital stamp (UUID) provided by the Mexican tax authorities. Once the approval process is complete, your organisation receives the approved XML message and can then submit the invoice in XML or PDF format.

Requirements for the use of electronic invoices

• Obtain a Federal Taxpayer Registration Number (RFC), Unique Population Registry Key (curp) and State Registration Number from SAT.
• Ensure that the PDF and XML files meet SAT requirements. These files are sent to clients as attachments. The generated XML file must be based on the XML Schema Definition (XSD) provided by SAT. You must archive the XML file for each electronic invoice.

Carta Porte ?

The new supplement known locally as Suplemento de Carta Porte must be added as an annex to the electronic transfer invoice (CFDI de Traslado) or the revenue CFDI (CFDI de Ingresos) issued for transport services.

The Carta Porte aims to ensure the traceability of products moving within Mexican territory by requiring additional information on the origin, location, precise destination and transport routes of products transferred by road, rail, sea or air to Mexico.

This change comes into effect on 1 October 2021, freight carriers must have a copy of the Carta Porte Supplement in the vehicle that proves legal compliance with this mandate.

What information must be declared via the e-reporting system?

The companies that will have to send the e-reporting are:

• Subject to VAT in France and who trade with individuals and non-taxable institutes (BtoC known as “business to consumer”),
• With companies not established on the national territory (i.e. taxable persons who have no establishment, domicile or residence in France)
• Taxable transactions carried out in France with non-taxable institutes (particularly individuals).

On the other hand, transactions benefiting from a VAT exemption based on Articles 261 to 261 E of the General Tax Code, exempt from invoicing, do not fall within the scope of e-reporting. This is particularly the case for certain banking and insurance operations, medical and health services, educational services, operations carried out by non-profit organizations whose management is disinterested.

How will I transmit the data of my transactions to the administration ?

In general, the data of e-reporting transactions (the list of which will be defined by decree that has not yet been published) must be transmitted by the company carrying out the operation via a dematerialization platform partner of administration.

Several modes and formats of transmission will be possible. The Z ticket, in dematerialized and structured format, can be a deposit format if you have cash register software. If you issue invoices to your private customers, you can submit this invoice directly in dematerialized and structured format on the partner dematerialization platform you have chosen. It will be responsible for extracting the only data useful for e-reporting for the purposes of the tax administration.

In the absence of cash register software or system, or of deposit of invoice, the company will have the possibility of entering or transmitting a summary statement of the transactions carried out over the period. The data transmitted in e-reporting will be limited to the amount of the transactions and the related VAT.

What is the Z ticket ?

“Z” being the last letter of the alphabet, remember that the cash Z is the last report of the day and it closes the day from an accounting point of view.

Not only does the Cashier Z show the final summary of the day’s sales, refunds, and payment methods, it resets all counters to zero in preparation for the next day.

Iway Services supports you in all stages of Electronic Invoicing, whatever the format.

Sources :

• https://www.impots.gouv.fr/e-reporting-la-transmission-de-donnees-de-transaction-ladministration

What is an EDI e-Invoice ?

Invoices transmitted by Electronic Data Interchange (EDI – EDI e-Invoice) are in the form of a structured message, according to an agreed standard, allowing for reading by computer and which can be processed automatically.

They are de facto original invoices.

Electronic data interchange makes it possible to secure the transmission of electronic invoices autonomously, it alone guarantees the authenticity of their origin, the integrity of their content and their legibility.

For this purpose, the remote transmission system used must comply with the following conditions:

• The identity of the message sent and received.
• Creation of a summary list and a file of partners.
• Data archiving (see article BOI-CF-COM-10-10-30-10).
• Restitution of data in plain language (see BOI-CF-COM-10-10-30-10 as well).

NB : The summary list and the directory of partners are essential features of EDI.

The invoice message must contain at least the mandatory information.

The software must make mandatory the information provided for by the regulations.

The use of stable codes designating, for example, products or persons is possible, if the coding is automatically deciphered using a correspondence table, whose modification history is preserved, integrated into the restitution function.

The exchange of dematerialized invoices can take place in a heterogeneous environment (transmitting and receiving stations of different types)

The invoice must not be altered in any way after it has been constituted, issued by the supplier and archived.

The company that issues or receives invoices must ensure that it is kept and kept in electronic form for the period set by Article L. 102 B of the LPF which is 10 years for commercial invoices.

Summary list

The EDI system shall be able to reproduce a sequential summary list of all messages sent and received and their possible anomalies.

This list must include at least the following information:

• The number and date of the invoice.
• The date and time of creation of the message.
• The amounts excluding taxes and all taxes of the transaction, as well as the currency code when the invoice is not denominated in euros.
• The identification elements of the transmitter or receiver given by the teletransmission system (code, name or company name, SIRET or SIREN number, address, status of supplier or customer).
• The version of the software used.

The file must be created and populated as messages are sent or received and must not be editable.

Taxable persons who do not have their own dematerialisation platform may use a service provider

The guarantees of a dematerialization system ?

The service providers must guarantee that their system of dematerialization and archiving of invoices complies with all the conditions prescribed by Articles 96 G and 96 H of Annex III to the CGI.

It  must  be possible to reproduce it on screen or on a computer medium to be carried out selectively on the basis of the mandatory information which the list must contain.

Companies, suppliers or customers, must constitute a file of partners with whom they exchange dematerialized invoices. This file must be fed automatically by the remote transmission system

This file must include, for each partner, the following information: name or denomination and address, quality of transmitter and / or receiver, date of entry into the dematerialization phase with the partner and date of exit.

When the teletransmission system is accompanied by a summary list and a file of partners and complies with all the specifications provided for by the CGI, the implementation of controls establishing a reliable audit trail is not necessary for the purpose of securing invoices.

Although the teletransmission system does not guarantee the authenticity of the origin, the integrity of the content and the legibility of the invoices transmitted, the taxable person is bound by

• Or to put in place controls establishing a reliable audit trail.
• Either to use an electronic signature (or server stamp) “qualified”.

Sources :

• l’échange de données informatisées
• BOI-CF-COM-10-10-30-10
• article L. 102 B du LPF
• articles 96 G
• 96 H de l’annexe III au CGI

What is an electronic signature ?

The electronic signature is a means of securing electronic invoices accepted by the French legislator. It autonomously guarantees the authenticity, origin, and integrity of the content.

Only electronic signature that complies with the General Security Repository (RGS) and the eIDAS Regulation  are allowed:

• Either the advanced electronic signature with qualified certificate (level 3);
• Either the qualified electronic signature (level 4).

The secure electronic signature creation device shall ensure by appropriate technical means and procedures that the electronic signature created data:

1. Cannot be established more than once and their confidentiality is ensured.
2. Cannot be found by deduction and that the electronic signature is protected against falsification.
3. May be satisfactorily protected by the signatory against use by others.

It must also not allow any alteration and must not prevent the signatory from having an exact knowledge of the content before signing it

Verifications

Integrity of the document, using the data inserted in the electronic certificate attached to the electronic signature.

• This verification must be possible not only upon receipt of the invoice but also at any time during the planned retention period.
• Verifying the document fingerprint using the signer’s public key ensures that the document signed by the invoice issuer has not been altered or subsequently modified.
• In addition, the company receiving the invoices must also ensure the authenticity and validity of the electronic certificate attached to this electronic signature verification data.
• These provisions are applicable to the recipient of electronic invoices accompanied by an electronic signature (or server stamp) regardless of the format of the latter.

Duties of the service provider

The electronic certification service provider must:

How do I obtain an electronic signature certificate?

The realization of an advanced electronic signature presupposes the prior obtaining of an electronic signature certificate. Qualified electronic signature certificates within the meaning of Regulation No. 910/2014 “eIDAS” are issued by qualified electronic certification service providers.

Iway Services supports you in all stages of Electronic Invoicing, whatever the format.

An update on the regulation of electronic invoices

What is an invoice ?

In this article, we will focus on the generalities, regulations that govern electronic invoices.

The invoice is an official document that is at the crossroads of several regulations, which sometimes leaves room for several interpretations that can contradict each other.

Although each country remains sovereign in the writing of tax regulations, it is the European directives (2010/45/EU and 2014/55/EU) that inspire the French General Tax Code and the Commercial Code , especially at the level of electronic invoicing.

Invoices serve several purposes. It is a legal proof of the service rendered, or of the goods sold, and establishes the seller’s right to claim payment. It is an obligation to invoice any professional activity.

It also holds the details of the sale and serves as accounting evidence for the preparation of the annual accounts.

Contains information on the VAT applicable and of any deductions made.

And of course, it allows the tax administration to exercise its right of verification.

The authenticity of the origin, the integrity of the content and the legibility of the invoice

An important sentence in Article 289 of the CGI says:

“The authenticity of the origin, the integrity of the content and the legibility of the invoice must be ensured from the moment it is issued until the end of its retention period.»

“Authenticity of origin” means that it is up to the supplier AND the customer to verify the identity of the issuer.

The supplier has either :

• Issued the invoice himself
• The invoice was issued by a trusted third party (EDI service provider, accountant, etc.) .

“Integrity of the content” means that the entirety, mandatory or not, of the original invoice must not have been modified.

“Legibility of the invoice” means that it can be read without difficulty by the user and by the administration, on paper or on screen.

The retention period varies according to certain specific cases, but is generally  10 years.

Mandatory information on an invoice

The obligations and invoicing methods apply regardless of the medium (paper or electronic) or the means of transmission of invoices. (CGI Article 242h A):

Acceptation de la procédure de transmission électronique

Today, the transmission and provision of electronic invoices is subject to acceptance by the recipient, either via an interchange contract between companies or via a service provider.  Acceptance can also be done tacitly, for example, when the customer pays an invoice received.

This changes with Ordinance No. 2021-1190 of 15 September 2021 where the electronic invoicing obligations will be imposed according to a progressive schedule:

• From 1 July 2024, upon receipt, to all taxable persons,
• From 1 July 2024, in transmission, to large companies,
• From 1 January 2025 to mid-caps,
• From 1 January 2026 to small and medium-sized enterprises and micro-enterprises.

The deployment of e-reporting obligations  will follow the same schedule.

Electronic invoicing in France

Everyone is talking about it, the obligation to exchange electronic invoices between companies (B2B).

Depending on the size and sector, companies will have to get in order starting July 1, 2024 and no later than January 1, 2026. The challenges of finding the most appropriate technical, legal and operational solutions to maximize the gains in VAT recovery and guaranteeing profits for businesses are significant.

If we know that the legal mandates remain almost the same as on a paper invoice, it’s the mode of transmission, it’s compliance and storage that changes.

As a reminder, in accordance with article 289 of the CGI, the authenticity of the origin, the integrity of the content and the legibility of the invoice must be ensured from its issue and until the end of its retention period. (usually 10 years).

Three dematerialization standards are accepted by the legislator:

• The reliable audit trail.
• Electronic signature.
• Electronic data interchange (EDI).

For France, the rules are (almost) clear, but what about an invoice received from abroad?

Electronic invoicing outside France

The directive of 20 December 2001 provides the possibility (and not the obligation) to send invoices electronically. Unlike internal invoices, only two standards are accepted: electronic signature or electronic data interchange (EDI).

Indeed, the possibility of exchanging invoices electronically is not reserved only for French companies. It also applies to transactions with companies in Europe and outside the European Union.

Be careful, however, for archiving invoices can only be done in a country outside the EU which has an agreement with France.

A dematerialized invoice consists of a message structured according to a standard agreed between the parties, allowing automated processingand unambiguously.

Not all invoices transmitted electronically have these specifics. Example, an invoice sent by email cannot be considered as a dematerialized invoice when it is not in the form of a structured message: such as word processing, spreadsheet. , image, etc.

Future

The European Union, under its working group EMSFEI (European Multi-Stakeholder Forum on E-Invoicing) is working on solutions to facilitate the exchange of invoices by focusing on interoperability and the use of PEPPOL (Pan-European Public Procurement On-Line) between countries. France will adopt the “Clearance” model aka CTC (continuous transaction controls) with a “next generation” Chorus Pro platform and in partnership with certified service providers who can be access points to the PEPPOL network.

Continuous Transactional Control, Clearance and e-reporting

Which models to adopt?

Continuous Transactional Control, Clearance and e-reporting are models that are rolling out around the world and come to us from Latin America. The Hexagon will adopt a French version which will use a national platform AND certified platforms for clearance and e-reporting.

Clearance is a “pre-validation” before transmission in order to have the invoices formally validated before transmission, the tax administration can then directly take care of the transmission to the recipient.

The CTC (Continuous Transactional Control) allows a VAT report to be transmitted in real time to the tax authorities, for control and for preparation of Clearance declarations.

In addition to electronic invoicing, which will make it possible to carry out part of the checks and pre-declarations of VAT, it will be necessary to send e-reporting on sales and payments. The scope of this electronic report (frequency, data, sender, etc.) has yet to be defined, but the DGFIP ensures that the mandatory data to be provided will be less than those required on the invoice.

French-style e-Invoicing architecture

To concentrate the flows towards the Public Finances (DGFIP), a national platform (PFN) will be at the center of the implementation.

• Perform checks on the invoices sent and extract the information required by the DGFIP.
• Manage a national directory of companies (which will be identified by their SIREN / SIRET.
• Support companies by offering a direct exchange capacity through the platform

This will limit the number of formats to those required for reception by the PFN, online entry or creation of a hybrid PDF invoice  (Invoice-X) and will allow an exchange of statuses and include archiving.

Certified private platforms (PFPC) can process invoices in various formats, even if they are not in the mandatory format cited by the DGFIP, but they are under the obligation to reliably extract the data expected by the Administration and to control the conformity of the data under the same conditions as the PFN.

Sources :

• https://www.assemblee-nationale.fr/dyn/15/amendements/3360C/AN/3211
• https://fnfe-mpe.org/
• EUR-Lex – 32010L0045 – EN – EUR-Lex (europa.eu)
• EUR-Lex – 32014L0055 – EN – EUR-Lex (europa.eu)
• 277192.pdf (vie-publique.fr)

Why use electronic invoices for B2B ?

After the obligation to use electronic invoices with French institutions, it is the turn of French companies (domestic B2B) to comply with the obligation to exchange their invoices in dematerialized form.

The goal of e-invoicing is to speed up processing, to reduce payment delays and lower processing costs. For businesses, this allows the automation of the invoicing process with data validation and confirmation of their successful integrations. Ultimately, this will allow you to be paid faster and cheaper thanks to dynamic discount.

For the administration, this will ensure that all applicable VAT is collected, that the tax deductions correspond to the proper VAT, prevent and detect fraudulent behavior and ultimately support economic activity.

The calendar

Following Ordinance No. 2021-1190 of September 15, 2021 relating to the generalization of electronic invoicing, the schedule has been amended as follows:

All companies will have to accept the electronic invoice on July 1, 2024 (instead of January 1, 2023). That said, many points remain to be clarified, which formats? what data? This remains to be clarified, but it is certain that an invoice must contain structured data and that the standard EN16931 should play a role, as well as hybrid formats. Note that upon receipt, the simple PDF invoice will no longer be possible.

Gradually between 2024 and 2026 depending on the size of the company, it will be obligated to issue invoices in electronic form:

• July 1, 2024 for large companies.
• January 1, 2025 for mid-sized companies.
• January 1, 2026 for SMEs and VSEs.

Which format?

The format for transmission will be freer, but only the mandatory formats for reception by the nattional platform will ensure compliance with transmission and reception. It will always be possible to use other formats if these rules are applied:

• Reliable extraction of the data expected by the Administration (required format).
• Compliance checks on data as specified by future texts.
• All of this is carried out by Certified Private Platforms (service providers or internal solutions).

Iway Services supports you in all stages of Electronic Invoicing, whatever the format.

Sources :

• https://www.assemblee-nationale.fr/dyn/15/amendements/3360C/AN/3211
• https://fnfe-mpe.org/
• EUR-Lex – 32010L0045 – EN – EUR-Lex (europa.eu)
• EUR-Lex – 32014L0055 – EN – EUR-Lex (europa.eu)
• 277192.pdf (vie-publique.fr)