The Chilean government was the first to introduce voluntary e-Invoicing in 2001. Since then, the country has continued to develop its e-invoicing infrastructure. In 2018, Chile’s Servicio de Impuestos (SII) mandated B2B electronic invoices for all taxpayers.
Even though Chile began voluntary e-invoicing earlier than many of its Latin American counterparts, mass implementation began later in 2014. It was later finalized in 2018 when the government enacted a new set of regulations.
On August 1, 2022, Chile relieved the requirement for taxpayers who were required to submit daily sales reporting. Instead, tax authorities will use DTE (Electronic Tax Documents) data to collect information.
Electronic Tax Documents is the local term for electronic invoices in Chile. Companies must register with Chilean tax authorities, the Servicio de Impuestos Internos (SII), to issue and receive them.
In this article, we will provide an overview of Chile’s advanced e-invoicing regulation and discuss the following:
- Whether e-invoicing is mandatory in Chile
- How to send compliant e-invoices in Chile
- Characteristics of an e-invoice in Chile
- What businesses need to do to comply with the e-invoicing regulations in Chile.
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Is e-invoicing mandatory in Chile?
Chile mandated B2B e-invoicing in 2018, making it mandatory for all taxpayers to send valid Documento Tributario Electrónico (DTE) or Electronic Tax Documents to their counterparties.
All invoices sent are subject to real-time validation by the SII.
A company has to register with Chilean tax authorities to receive a Código de Asignación de Folios (CAF) or Folio Authorization Code. This digital signature enables the company to send legally binding e-invoices.
Businesses must also register with a certified electronic invoicing service provider to issue and receive DTEs. The provider will help taxpayers meet the requirements of Chile’s e-invoicing regulation, including the format and content of the DTE.
How to send compliant e-invoices in Chile?
There are two options for companies to send compliant e-invoices in Chile:
1. Adapted accounting and invoicing software
If your company can afford to develop or purchase its own accounting and invoicing software, you can use an XML format to generate valid DTEs. This option is expensive but can bring great efficiency to your invoicing process.
Purchasing software is also a great option for companies with an existing invoicing system. They can simply buy the adapted version to start issuing compliant e-invoices.
The only challenge with this option is that the IT team must understand and adapt the necessary schema. They must ensure the invoices comply with the Chilean government’s legal requirements.
Let us look at the steps involved in sending an invoice through an adapted accounting software:
Step 1. Register with the Chilean government to obtain a Código de Asignación de Folios (CAF)
You must obtain a CAF to start sending electronic invoices. This is a digital signature that shows the invoice is legally valid.
You apply for a CAF through the SII’s online portal. After providing some basic information, you will receive a unique code that identifies your company and authorizes your invoices.
Step 2. Generate your invoice in the XML format
Once you have a CAF, you must generate your invoice in XML format. This standard format is used to transmit e-invoices and tax documents in Chile.
The SII has defined specific requirements for the XML format. This includes the structure and order of data and its content.
Your adapted software should include all the necessary elements, such as customer and supplier information, description of goods or services, value-added tax (VAT) rate, and total amount due. All these elements must comply with Chile’s legal requirements.
Step 3. Send your invoice to the tax authority for validation
Before sending the invoice to your customer, you must validate it with the SII. This is a mandatory step that verifies whether your invoice is compliant with the Chilean electronic invoicing regulations.
You transmit your invoice electronically to the SII through a secure connection. Once validated, the SII will stamp your invoice with your CAF. This is the only way to prove your invoice is compliant and legally binding.
Step 4. Send your invoice to your customer
Once the SII has stamped your invoice, they send it back to you. You can then send it to your customer electronically through email or a secure portal.
The customer may take up to 8 days to process the invoice. Once they accept it, they must acknowledge it in the SII’s online portal. They should also send you a receipt as proof of payment.
2. Third-party certified electronic invoicing service provider
For companies that don’t have the resources to develop their own software or who are not tech-savvy, a third-party certified electronic invoicing service provider is the best choice.
This is a simpler and more cost-effective solution compared to developing your own system.
The provider will provide a platform to issue DTEs and submit them directly to the SII. They will assist with the format and content of the DTE.
Let us look at the steps to sending compliant e-invoices in Chile:
Step 1. Register with SII and obtain a CAF
SII (Servicio de Impuestos Internos) is the Chilean tax authority. It is the body that monitors and enforces e-invoicing regulations. It also ensures businesses pay the correct amount of taxes.
To register with SII and obtain a Folio Authorization Code, companies need to submit the following information:
• Full legal name of the company
• Trade name of the company if different from the legal name
• Address of the company, including headquarters address
• Chilean taxpayer identification number (RUT)
• Type of business activity
• Signature of the legal representative
• Authorization of the legal representative
• Tax representative
• Electronic address of the company
After submitting the information, SII will verify the information by conducting an audit. Once the audit is successful, the company will receive a Folio Authorization Code.
Step 2. Register with an approved e-invoicing service provider
Ensuring compliance with Chile’s e-invoicing regulations can be complicated. You must ensure your invoices have all the required information, such as customer data, VAT rate, and amount.
For this reason, it is important to register with an approved electronic invoicing service provider. The provider will help you prepare and send compliant e-invoices and collect and store the relevant data.
A reliable e-invoicing provider such as Storecove will help you comply with the electronic invoicing regulations in Chile. The provider will ensure your invoices have all the required information and are digitally signed with a digital certificate.
Step 3. Create and transmit an XML electronic invoice to the Chilean Tax Authority
After registering with an electronic invoicing service provider, you can easily create and transmit electronic invoices to the Chilean Tax Authority. The provider will help you create e-invoices in XML format, the required format for e-invoices in Chile.
When you transmit the e-invoice, the Chilean Tax Authority will verify the information in the invoice. If it is valid, it will add your digital stamp and issue a receipt to confirm that your electronic invoice has been accepted.
The tax authority sends the authorization back to your e-invoicing service provider. Once the invoice is accepted, it becomes legally binding, and you can send it to your customer.
Step 4. Sending the invoice to the customer
Your electronic invoicing service provider will store the electronic invoice, and you can easily send it to your customer. It is sent through SII web endpoints, and the customer has eight days to respond to the e-invoice.
In case of refusal, the customer responds by email for the seller to investigate. They can also request a refund or make any other necessary changes.
Once the customer accepts the e-invoice, it is legally binding, and the seller can receive the payment.
Characteristics of the electronic invoice in Chile
Sending electronic invoices that comply with the Chilean Tax Authority’s regulations is essential for businesses operating in Chile. The characteristics of an e-invoice in Chile include:
XML is the required format for e-invoices in Chile. It refers to a syntax in which the senders and receivers of invoices establish a common language.
XML format ensures the accuracy of the invoice and makes it easier to transfer data from one system to another. When storing invoices, having a standard format makes it easier to find and share them.
The Chilean Tax Authority provides a digital signature known as the Folio Authorization Code on electronic invoices. It is a cryptographic stamp that ensures the document's validity and provides additional security to avoid fraud.
The CAF is a series of whole numbers unique to each e-invoice. It contains a personal key linked to the sender’s digital certificate. The CAF is valid for one year, and you must renew it.
You must send the electronic invoice with a valid CAF to comply with the Chilean tax authority. After verifying the information and confirming it complies with the regulations, they stamp the CAF on your invoice.
The Chilean Tax Authority gives customers eight days to respond to an electronic invoice. The customer must accept or reject the invoice within this time frame.
If they don’t respond within eight days, the e-invoice will be automatically accepted. This helps avoid payment delays and makes it easier for businesses to receive timely payments.
It is mandatory for recipients and issuers of electronic invoices to archive them for six years. This period is designed to ensure that businesses can easily provide the tax body with all the necessary documents in case of an audit.
Archiving e-invoices for six years helps protect businesses from any potential legal issues that might arise. It also provides a record of all transactions, which can prove helpful in case of disputes.
Electronic invoices in Chile must include a PDF417 bar code for them to be accepted by the tax authorities. The PDF417 bar code contains information about the invoice, such as the date of issue, sender and recipient, and the amount.
It is used to facilitate the automated processing of invoices by the tax body. By scanning the bar code, they can easily verify the information in the invoice and confirm its validity.
For an invoice to be accepted in Chile, it must include certain information. This includes:
Unique sequential number
The electronic invoice must include a unique sequential number to identify it. This helps the tax authorities track all invoices and verify their validity.
It is recommended that businesses use the same numbering system for all their invoices, as it makes it easier to store and retrieve them. The unique sequential number must also be printed on the PDF417 bar code.
Every supplier must include their company name, address, and tax registration number on the invoice. This helps the tax body verify that the supplier is registered with them and authorized to issue invoices.
The customer's information, such as their name, address, and tax registration number, must also be included on the invoice.
Tax authorities use this information to ensure the customer is registered with them and verify the invoice.
Description of the goods/services
The invoice must also include a detailed description of the provided goods or services. It may include additional information such as quantity and unit price.
The details must be clear and concise, as the tax authorities may use this information to confirm if the seller actually supplied the goods or services. These details are also necessary to determine the applicable tax and additional charges.
Total amount due and payment method
The total amount due and the payment method are important pieces of information for the recipient. It helps them easily calculate any additional costs, such as taxes and fees, that may be applicable.
You should also include the due date and any relevant payment instructions. This ensures that customers are aware of when they need to pay and how they can do so.
Rate and amount of VAT for goods/services
E-invoices in Chile must also include the rate and amount of VAT for the goods or services provided. The tax authority verifies this information to ensure that businesses accurately charge the right amount of VAT.
What should businesses do to comply with the e-invoice regulations in Chile?
Businesses wishing to comply with electronic invoicing regulations in Chile can do so by following certain steps:
Implement an electronic invoicing system that meets the requirements of Chilean tax authorities
Businesses must use software approved by the Chilean tax authorities, allowing them to create, store, and transmit electronic invoices. The software must also generate a PDF417 bar code for the electronic invoice that contains all the necessary information.
The alternative is to use a certified third-party e-invoicing service provider such as Storecove. They provide a platform that meets the requirements of electronic invoices in Chile and other electronic tax documents.
Have a system that can archive invoices for up to 6 years
The Chilean government requires that digital invoices be stored for six years. This allows the tax authority to retrieve digital invoices during an audit or dispute quickly.
Businesses should have a system capable of archiving digital invoices for this period and verifying the validity of digital certificates. This ensures that tax payers can easily retrieve digital invoices when needed.
Invoice data is a vital aspect of digital invoices in Chile. It helps the tax authority verify that businesses are compliant and that the right amount of taxes is paid.
Register for electronic invoicing with the Chilean tax authorities
This process is necessary to obtain a digital certificate which is required to issue electronic invoices. It also allows the tax authorities to track invoices and other electronic documents.
The registration process is relatively simple and can be done online. Businesses must provide the necessary documents and information to obtain the digital certificate.
Once approved, businesses will receive a digital signature which they must use to sign every digital invoice. This digital signature proves that the invoice was issued by an authorized entity and is valid.
Submit digital invoices via the tax authorities' portal
The seller must submit the digital invoice through the SII portal. This ensures the tax body can track digital invoices and other necessary documents.
When submitting digital invoices through the portal, businesses must ensure that all necessary information is included. This includes invoice number, due date, payment terms, rate and VAT amount for the goods/services provided, and other relevant information.
Monitor digital invoice requirements
Businesses need to stay up-to-date with the latest digital invoice regulations in Chile. Their digital invoicing system must be able to comply with any new requirements that the Chilean tax body may introduce.
There can be serious consequences if businesses fail to comply with digital invoice regulations in Chile. This includes heavy fines and possible criminal action against business owners or individuals who fail to comply.
Consequences of digital invoice non-compliance
Businesses need to be aware of the consequences of failing to comply with digital invoice regulations in Chile. The penalties for digital invoice non-compliance can cause serious financial harm to businesses and criminal action for those responsible for digital invoice fraud.
Here are some of the consequences:
Shipping products without electronic invoices
A case where a digital invoice is not presented or exported can result in fines of between $77 and $1,500.
Falsifying digital tax documents is one of the most serious digital invoice non-compliance issues. Companies can be fined between 50% and 500% of the tax due and are likely to face criminal prosecution.
Takeaway: Keep up with Chile’s digital invoicing regulations
Digital invoices are important for businesses in Chile to keep track of their finances and comply with the government’s regulations.
Businesses must properly register for electronic invoicing and submit digital invoices via the SII portal to ensure compliance with the Chilean tax authority.
Guarantee digital invoice compliance and avoid costly fines for your business by using Storecove’s e-invoicing solution.
Get started today and take advantage of our intuitive platform, access up-to-date information on digital invoice regulations in Chile, and enjoy peace of mind with our fast, reliable invoice processing.
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