e-Invoicing in Colombia: A “new reality” with 20 years of history

e-Invoicing in Colombia: A “new reality” with 20 years of history

18/11/2016

Initial rollout of e-invoicing in Colombia goes back more than two decades, but the big breakthrough for this system will occur in the coming months with the massification model promoted by the DIAN (Dirección de Impuestos y Aduanas Nacionales de Colombia) tax authority.




The massification project promoted since 2015 by the National Tax and Customs Directorate (DIAN) has given rise to a huge amount of headlines and news in Colombia in recent times. However, e-invoicing in the country is nothing new, as Colombia has had its own system for twenty years now. In this post, we briefly analyse how the Colombian system developed and the reasons it has now become front-page news:

In 1995, Article 37 of Law 223 declared the electronic invoice equal to the paper bill, granting it the same value. A year later, the first exploratory pilot schemes with this technology were carried out.

It was necessary to wait until 2007 to regulate e-invoicing, at which time two essential rules were adopted: Decree 1929 and Resolution 14465. The first standard defined the electronic invoice and explained how its issuance, delivery, acceptance and maintenance should be carried out by digital means. Resolution 14465 defined the system’s technical specifications.

Use of e-invoicing so far has been on a voluntary basis, with companies applying to the DIAN for permission. The project also set out the need for formal agreements with all clients and customers in order to use this billing system.

The system’s features have made its adoption difficult for the moment. For example, in 2014, it was estimated that only 2% of businesses were opting for e-invoicing. The need to establish agreements with clients, or the lack of a benchmark standard that would foster interoperability, constitute two important drawbacks in the adoption of digital invoicing by Colombian issues.

In this situation, in 2013 the DIAN began to develop an e-invoicing massification project, drawing inspiration from initiatives in neighbouring countries such as Chile, Brazil or México. The aim was to correct the faults detected in the current system, simplify start-up and gradually promote the obligatory nature of e-invoices (known as electronic receipts) among the country’s taxpayers.

This work came to fruition in November 2015 with the approval of Decree 2242. This decree lays down the obligation to issue e-invoicing for natural and legal persons selected by the DIAN. It also defines a framework for gradual adoption of this technology based on criteria such as income, risk level, location, etc. Another key reform promoted by the decree is the adoption of a common issuing standard for all taxpayers based on a digitally signed XML format.

On February 24, 2016 Resolution 000019 was published. Here, the DIAN defined the technical aspects of the new e-invoicing system according to massification Decree 2242. The resolution highlighted key issues explicitly, such as the document standard or format, digital signature format or the accreditation process for e-invoice issuers.

Finally, on April 18, the DIAN gave the e-invoicing pilot scheme the go-ahead. A total of 58 Colombian businesses took part in the project, in which EDICOM actively collaborated, detecting and correcting possible errors in the billing model. This project, which recently came to its conclusion, is the latest chapter in a long story which now faces the challenge of rebooting the system as a mandatory obligation for the first group of taxpayers soon to be selected by the DIAN.

The popularization of this technology is expected to reduce the high rates of tax evasion in Colombia, while minimizing the economic costs and increasing sustainability and efficiency in enterprises.

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