Starting on November 01, 2018, the CFDI cancellation policy (online digital tax document), approved by Mexico’s tax administration will go into effect. It’s a new measure that will avoid excessive CFDI cancellations, a problem, which affects a number of taxpayers and is favored by the underground economy. This change along with others scheduled throughout 2018 aim to improve CFDI data. The characteristics and evolution of the Mexican invoicing model have made it an example for other Latin American governments. However, the modifications make it mandatory that users adjust their systems to adapt to new tax changes.
- EDICOM is an authorized Provider by the Mexican SAT enabled to offer the CFDI cancellation service.
When can a CFDI be canceled?
The Mexican tax administration’s new fiscal cancellation policy is aimed at ending the bad practice some companies have of cancelling their invoices without their clients’ knowledge, which allows them to eliminate income not reflected for income tax purposes. Meanwhile, the customer who paid for the service or product can’t deduct the expense.
A CFDI can be canceled while it is being generated and when an error has been made such as having the receiver’s incorrect tax information, or when there are errors relating to operation amounts, errors in the product’s or service’s concept, errors relating to the payment method and etc.
What does the new cancellation policy consist of?
With the implementation of information and acceptance mechanisms, they can be cancelled only when the person in favor of whom the invoice is issued accepts their revocation. In this way, clients will be certain that once they pay for services, the invoices that cover the expenses will not be canceled.
The process is as follows:
- Issuers must send a cancellation request through the online SAT Portal.
- CFDI recipient will receive a message through the “Tax Mailbox” indicating that he has a request to cancel a CFDI.
- As of that moment, the recipient of the invoice has a period of 72 hours to accept or reject the cancellation of the CFDI. A reply must also be sent through the same Tax Mailbox. If the 72-hour margin passes, and the receiver has not responded, the tax administration will accept the cancellation request.
One of the novelties is the use of the Tax Mailbox as a communication channel. It’s a tool the tax administration created to communicate directly with taxpayers and has been used in a very timely manner. With the new cancellation policy, it is essential to have the Tax Mailbox.
There are several reasons why taxpayers may need to cancel an electronic invoice. Some of the most common are:
- Fiscal data errors (RFC, address, name or company name).
- Not inputting the last four digits (not mandatory).
- Amount errors (over or under for invoicing).
- Non-payment of the electronic invoice (main reason for cancellation).
- Concept errors (Products and Services).
- Applicable taxes on the electronic invoice.
There are also cases in which the taxpayer can unilaterally cancel the invoice without the acceptance of receivers.
- When the electronic invoice has a maximum amount of 5,000 pesos.
- In the case of a CFDI for payroll, expenditures, transfer or concept income issued to taxpayers of the Tax Incorporation Regime (RIF).
- When the CFDI has been issued through the My Accounts’ electronic tool in the Easy Invoice application.
- When they cover withholdings and payment information.
- When issued for transactions carried out with the general public in accordance with rule 184.108.40.206 or to residents abroad for tax purposes in agreement with rule 7.1.26.
- When the cancellation is made within 72 hours immediately following the CFDI’s issuance.
EDICOM, PAC and PCRDD in México
In Mexico, EDICOM was the first provider authorized and certified by the tax administration to send digital tax documents (PAC) and in 2010 for the validation of CFDIs. In 2015, it became the first certified provider to receive digital tax documents (PCRDD), an alternative for the tax administration that was created with the widespread use of e-invoicing in Mexico to correct failures and management difficulties due to system overloads. The PCRDD acts as an “electronic window” that unifies all tax procedures and extends the reception service that up until today would only be offered by the tax administration.
Through the development of its own platform for generating, sending and receiving CFDIs, EDICOM allows companies to simplify CFDI related processes with management integration systems.
With any innovation that occurs whether it involves technical or legal requirements, EDICOM is prepared to respond to and implement changes immediately and transparently for the client without affecting their daily business activities.