When it comes to shipping and specifically invoicing in Latin America (LATAM), companies can’t rely on consistency to guide them. The region is incredibly varied in terms of its tax regulations, customs requirements, and even its infrastructure. And that variation extends to the invoice process.
LATAM is a world leader in electronic invoicing. In fact, of the 36 billion e-invoices issued globally in 2017, 15 billion came from Latin America alone. Some nations, including Mexico and Brazil, even require e-invoicing in virtually all commercial operations. Others are moving toward this point.
But while e-invoicing is the norm across LATAM, most of its countries have unique and varied invoicing requirements that shippers must follow closely when entering this market—or else risk a compliance headache.
Understanding LATAM’s intensive approach to e-invoicing
LATAM’s tax laws are notoriously complex, particularly in countries like Brazil. The e-invoicing process further complicates things. With the goal of reducing tax evasion, numerous authorities across the region now require real-time (or near-real-time) validation and auditing of invoice data. And to make that possible, many have scrapped paper reporting altogether, implementing entirely new and unfamiliar systems.
This means that companies must comply with intensive end-to-end technical requirements to trade in LATAM. And since the specific requirements vary from country to country, a one-size-fits-all approach is completely impossible.
Complying with regulations, navigating legal and technical requirements
How complex are e-invoicing requirements in LATAM? Short answer: very.
Many LATAM countries have compulsory models for the issuing and submission of e-invoices. This includes Mexico, Brazil, Chile, Ecuador, Argentina, Peru, and Guatemala. And the requirements in these countries can be strict, covering everything from the conditions under which the original e-documents are stored to prior administration procedures like mandatory file format testing.
Formatting itself is a serious issue, with some countries stipulating the format that both the e-document and any printouts should follow. Shippers must also ensure they’re using the correct e-signature system, as this varies across the region.
Another concern is the insertion of the relevant electronic tax control code, which is required in most models for validation purposes. And in Mexico, all invoices must include a 36-character UUID code, meaning companies must find a reliable way to store and retrieve this data for every invoice generated and issued.
If that sounds like a lot to process, it is. This complexity presents a significant challenge for shippers lacking experience in the region—but it shouldn’t stop them from trying to crack this lucrative market.
Combatting complexity with attention to detail and know-how
Nothing about invoicing in Latin America is easy. However, by harnessing the knowledge and expertise of an experienced logistics provider, shippers don’t have to worry about the heavy lifting.
CTSI-Global has extensive hands-on experience with LATAM shipping and invoicing requirements, and we’re committed to going above and beyond to make our clients’ lives easier. As the only global logistics consulting provider that processes invoices based on domestic requirements, we ensure our clients’ invoices are always compliant with local tax and regulatory requirements—because when they have peace of mind, so do we.
In a future post, we’ll dive even deeper into one aspect of shipping in LATAM that presents a major challenge for many shippers—complying with documentation requirements. In the meantime, find out more about how we can help by contacting us today.