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Practical Problem – Rejecting Chilean Electronic Invoices

Author:Mr Harris Gomez
Profession:Harris Gomez Group
 
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During 2014, Law No. 20,727, stipulated the mandatory use of the electronic invoices for Chilean companies, along with other electronic tax documents such as invoice settlements, debit and credit notes and purchase invoices. The new law would start gradually for larger companies and by January 2018 for all Chilean companies no matter the size.

The benefits of this new regulation are the following:

It avoids the falsification of invoices and therefore, the fraudulent use of VAT credit. Saves time and money for taxpayers. Eliminates the risk of losing documents. It provides a digital storage of tax documents (DTE's) in the IRS electronic files. It allows the assignment of invoices through a simple manner and online (Factoring). Improves the speed and consistency of the billing process. Improves trustworthiness and transparency of companies. It allows companies to defer the payment of VAT made through internet from the 12th to the 20th of each month. It avoids the obligation to physically stamp invoices and all other tax documents in the offices of the SII (as now there are no physical paper copies). Recently, there has been another important change related to the possibility of using the invoice as an undisputable evidence that a service or sale has been provided, and therefore, that a debt is owed to the provider.

Indeed, the invoice can be used and an "executive title" that reveals a debt which grants the right of execution. This means it has the same legal value as a cheque, a promissory note signed before notary, or a sentence issued by a judge. However, to have this effect, once the invoice is issued, the receiver or payer must not have rejected the invoice.

The law previously ruled that the payer had 8 days to reject the invoice or 30 days as a cap if by agreement the parties gave themselves more time. Now, from this year on, the time has been reduced in all cases to only 8 days.

The Problem:

This can be problematic because almost all companies have electronic invoices and a payer is only a click away from either accepting or denying an invoice which can lead to significant consequences for the company if not done properly.

For example, a large company who receives invoices from various providers. How can an accounting department in this type of company know if the service has been provided? It is easy to imagine a junior accountant accepting all the incoming invoices assuming they are correct only to find out later that a service was not provided....

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