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According to El Salvador’s Chamber of Commerce president, adopting electronic invoices in El Salvador is a gradual process that could take up to 3 years to complete.
Almost a year after the deputies of the Salvadoran Legislative Assembly approved a series of modifications to the Tax Code to incorporate electronic invoicing in the country, a sizable number of companies have already registered and obtained the necessary authorization to issue this type of document.
According to the data reflected by the official electronic invoicing site, 395 companies are currently issuing electronic invoices in El Salvador through Electronic Tax Documents (DTE), which are digital records that give validity to the transactions carried out by these companies with their customers.
Large companies implemented electronic invoicing in El Salvador on July 1
According to the tax law expert Max Mojica, “the Ministry of Finance notified certain large companies within the first quarter of 2023 that they were obliged as of July 1 to start with the electronic billing system in the country.
This can be confirmed with the data from authorized companies since by the last week of March, only seventy-nine companies issuing these DTEs had registered, while to date, the number of companies set up to issue electronic invoices in El Salvador has increased fivefold.
Even so, to date, not all companies are required to issue this type of billing because, as the expert has previously explained, the first to adhere to this law would be companies with annual sales of more than $10 million. Medium and small companies with much lower sales will be required to utilize the system over time.
Even so, the Treasury of El Salvador has yet to publish any date or schedule for adopting electronic invoicing on the program’s official portal (www.factura.gob.sv). This website serves businesspeople as a resource to know when they should start issuing electronic invoices in El Salvador.
Even so, Mojica points out that “it is a plan that is not going to stop because the Treasury is going to notify another segment of the large companies so that it applies the system and thus it will progress, layer by layer until it reaches the micro, small, and medium-sized companies, and the professional business class.”
However, the lack of a schedule for fully implementing electronic invoices in El Salvador is not an obstacle for a company that invoices less than $10 million to want to start issuing these DTEs, since many of the 395 already authorized companies have registered voluntarily. The list of large companies and people who offer professional services implementing the program can be found on the official site.
Companies are preparing to issue electronic invoices in El Salvador
For his part, the president of the Chamber of Commerce and Industry of El Salvador (Camarasal), Jorge Hasbún, agreed that medium-sized and small companies have not yet received confirmation of when they must adopt electronic invoicing on a mandatory basis. In terms of information and training, these companies are being supported so that they are ready when they receive the notification from the Ministry of Finance.
In this sense, the representative of the commerce sector also indicated that the process is gradual because different classes of businesses must adopt it until reaching micro and small companies. Such entities represent up to 80% of the business sector in the country.
Due to the above, Hasbún compared the case of Guatemala, where this type of billing already exists. He points out that, as in that country, the process could be completed in about three years in El Salvador because the implementation of electronic invoices in El Salvador will be staggered.
Electronic invoicing will be universal by 2024
The latter, however, could be completed sooner, according to tax expert Max Mojica, who considers that “at some point in 2024, probably by the end, we will all be required to be invoicing electronically.”
Even so, the president of Camarasal points out that implementing the electronic invoices in El Salvador “is a modernization that, although for the moment it will mean a little extra work, will eventually make it easier for companies to operate.”
Likewise, on the side of tax collection, which has fallen in the first months of the year for 2022, Hasbún points out that the impact will only be seen if the companies that begin to issue the electronic invoices do not invoice with the system still in force. He adds, “In general, if a company was invoicing and keeping its accounting up to date, the only thing this change will do is facilitate processes.”
This facilitation, according to the government, “will make it possible to move the physical structure of the documents issued in tax operations to a functional electronic system, which has the same legal support as the physical documents,” something that, according to the Treasury also facilitates compliance with tax obligations for companies, as well as the issuance and storage of documents of this type.
According to the official site, the Treasury has received over three million Electronic Tax Documents.
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