October 2007

e-Invoice

ComprobantesFiscales Digitales

Fiscal Laws & Rules• Mexican fiscal regulations establish the proper use of e-Invoices, filings

and supporting standards. • Said regulations recognize both self-generated invoices and those issued

though SAT authorized service providers– Fiscal Law

• Articles 28, 29, 29-A, 29-B, 29-C

– Fiscal Rules• Invoicing Rules

– 2.22.6 through 2.22.9

– 2.22.11

– 2.22.12

• Authorized Service Providers– 2.22.13 through 2.22.16

• Technical Standards– Annex 20

Definition and Design Goals• The Mexican e-Invoice Fiscal regulations contemplate the generation

digital messages used for:– Standard invoicing (proof of purchase)

– Credit and debit notes

– Fiscal bills of lading

• Though this regulations and supporting standards, SAT aimed to allow for a 100% digital cycle of generation, transmission and storage of invoices.

• Design Guidelines– Ease of automation

– Structured

– Secure

– Open standard

– Should be equally accessible to large and small taxpayers

– Should be technologically neutral

Characteristics• Integrity:

– The information contained within the e-Invoice is protected and can't be manipulated or modified without it's detection.

• Authenticity:– The identity of the issuer can be verified and tracked.

• Non repudiation:– By law, any person or entity that generates a valid e-

Invoice, will not be able to deny its generation.

Accounting Software Systems

Digital Signature Certification Process

Digital Stamp Certificate

Invoice Number and Series Request

Electronic Invoicing Generation

Issuer Obligations

Electronic Invoicing - Step by Step

Accounting System• The accounting system

should automatically record a time stamp for the operation (including minutes and seconds).

• The accounting system must manage invoice numbers, authorization number and date, series either by its own or through the use of supporting subsystems.

Offers certainty of id both in C2G and C2C scenarios. Extremely strict certification process. Largest PKI in the planet over one million active certificates All certificates are issued free of charge Standards based (x509 v3)

.KEY

BIOMETRICS

.REQ

=file.CER

PersonalProcedure

Electronic Signature Certificate

RequestForm

The Digital Stamp Certificates are based on the same standards as Digital Signature Certificates

They are recognized by SAT as being mission specific certificates This allows for more security

file.KEY

file.REQ =file.CER

www.sat.gob.mx

Electronic Signature

file.KEY

file.CER

Digital Stamp Certificate

Digital Stamp Certificate

Can only be requested by the issuing taxpayer using its Digital Signature The Tax payer determines the amount of folios and series to use The folios are requested by incremental amounts

Invoice Numbers and Series Request

The e-Invoice XML is made up from the content of the operation. The SAT XSD standard information is all the fiscal invoice expressions. The seal is generated from the Original Chain which is digested, encrypted and inserted into

a PKCS1 structure. The e-Invoice can be expressed on paper upon the receiving parties request.

CFD

Generates Original Chain

Company System

It registers the Information

GenerateDigital Stamp

MD5-RSA-PKCS1

Extract Information

XSD

XML

UTF-8UTF-8

Orders Information

XSL

UTF-8

XML

UTF-8

UTF-8

XSL o XSLT

Printed Expression

Electronic Invoicing Generation

If uses several schemes of invoicing it mustsend a report for each option monthly.

Monthly Information1

2

3

5

4

6

7

8

RFC of Customer

Used e-Invoice Series

Used e-Invoice Number

Approval Number

Generation Timestamp

e-Invoice Amount

e-Invoice VAT

Status

Issuer Obligations

MAGNETIC MEDIA

Receiving

ELECTRONIC TRANSFERENCE

INTERNET

Emitting

e-Invoice

Comprobante Fiscal Digital

XML

Generates Original ChainXSL

GeneratesXML Electronic

Document(SAT standard)

XSD

XML

They integrate and conservelike a accounting part

Assigns Folio and Approval Number

RMF 2.22.6Frac. I y III

Company System

It registers the

Information

CFF Art. 29RMF 2.22.6

Frac. II

Assigns Folio

RMF Anexo 20Rubro C

Private keyfile.KEY

*******

Generates Digital Seal RSA

RMF Anexo 20Rubro D

Storage Minimum

5 Year

RMF 2.22.9

PRINTED REPRESENTATION

Issuing - Reception

Original Data Chain

Digital Stamp

Verification Data

The receivers can choose to get them in electronic format XML or representation in paper.

Issuers are required to store them only in XML electronic format.

Printed Representation

Verification Data Tax Id Digital Stamp Certificate Number. Approval Number. E-Invoice Number E-Invoice Series. (Optional)

Data Protection Original Chain used for stamping. Digital stamp expressed as BASE-64.

Security Controls

e-Invoice

Third Authorized Supplier for generation and shipment

of e-Invoices

Third Authorizede-Invoices Supplier

Third Authorizede-Invoices Supplier

Enters e-Invoices on the supplier’s system or supplier’s

equipment

IssuerIssuer

Receives e-Invoices of the authorized supplier

ReceiverReceiver

Generates, stores and sends e-invoices via electronic media

Controls emitter’s folios and certificates

Operation Model 1

2

3

Entire network Entire network

Requirements for the authorization

Contact Relation

1 Have digital signature: SAT Certificate and be an issuer of e-Invoice. Prove that it has the technical capability and infrastructure that allows to

give the service of generation of e-Invoices’ and monthly reports.

Managing and storage of confidential information.2

Third Authorized e-Invoices Supplier

Obligations

Operation3

4

The authorized supplier will have the folios’ control. The administration and control of the e-Invoices can be done by

the tax payer of the authorized supplier The tax payer and supplier have to keep the e-invoices

Of the suppliers Grant access to the SAT to the database and inform monthly the

number of e-Invoice generated for their clients. Of the issuer contributors

Send the monthly report of the e-Invoices generated

Third Authorized e-Invoices Supplier

+ Supplier data: Name Tax number (RFC) No. Of the e-Invoice Authorization Publishing date (Authorization) Digital Stamp generated with

an e-invoice of the supplier

<Complement>

Third Authorized e-Invoices Supplier<Complement>

Allow the adoption of the e-Invoices scheme to taxpayers that don’t want to modify their systems or don’t have enough infrastructure to support this scheme.

The scope of this program allows any taxpayer which decides to take the option of generation of e-Invoices through an authorized supplier’s system or service.

Grant authorizations to contributors that prove to have the enough technical and administrative capacity to guarantee the service.

Objectives of the Third Authorized Suppliers Program

DecemberThe SAT sends the proposal

of Authorized Suppliers for e-Invoices

July 17Publication in the internet site of

the SAT of the first Authorized Supplier and complement for it.

October 6Publication of the general rules of

operation in the RMF 6th. for 2006, 2.22.13 a la 2.22.16.

December 12Publication of the technical

guidelines en in the SAT’s internet site.

July 28Publication fo the Article 28 and 29 of

the CFF of the Official Journal of the Federation regarding the Authorized Suppliers.

Evolution of the Third Authorized Suppliers’ Program

2006

2007

2005

Characteristics of the Third Authorized Suppliers

The obligations to fulfilled through the features offered in the applications or systems operated and / or managed by the service providers authorized by the SAT are:

Allocation of the folio and if any the series to the e_Invoices. Generation of the XML structure, original data chain, digital stamps

of the e-Invoices. Generation of the file of the monthly report of the e-Invoices

generated.

Third Authorized e-Invoice Supplier

Authorized Suppliers Authorization Publication Date

Diverza Información y Análisis, S.A. de C.V. 2007-07-13

Buzón E, S.A. de C.V. 2007-07-17

Interfactura, S.A. de C.V. 2007-08-02

Sociedad de Explotación de Redes Electrónicas y Servicios de México, S.A. de C.V. 2007-08-17

Grant access to the SAT to the information, previously required to the tax payer.

Keep absolute confidentiality in the information of the e-Invoices.

Present every January of each year a notice to countersignature their authorization.

Provide to their clients the file with the monthly report in the first 5 days.

Deliver an electronic copy of the e-Invoices generated for their customer.

Inform monthly to SAT about the number of e-Invoices generated by their clients.

Provide a tool for review of the e-Invoices.

Obligations of the Authorized Supplier

e-Invoice

Scheme Benefits

ComprobantesFiscales Digitales

Evolution2003 2005 2006 20072004

Definitions:

General rules of operation.

Electronic and cryptographic standard.

January 5 Publication of the

Article 29 – CFF in the Official Journal of the Federation about the e-Invoices

January 5 Publication of the

applications: CertiSAT WEB (Digital Stamps) SICOFI-CFD (Folios)

July 5 The scheme is

extended for the special issued of e-Invoices. “CFDv2”

March 23 Publication of the

first <complements> for the special schemes.

March 31 Publication of the

general rules of operation in the RMF for 2004, 2.22.6 a la 2.22.9 and 2.22.11.

January 11 First e-Invoice

generated in Mexico.

July 28 Publication of the

Article 28 and 29 of the CFF in the Official Journal of the Federation about the Authorized Suppliers.

July 17 Publication in the

internet site of the SAT the first Authorized Supplier.

Estimated Cost Estimated Cost $130.00$130.00 per e-Invoice per e-Invoice

Traditional Scheme( 2004 )

Issuer Issuer and Receiver

-79%

-85%

Indirect Savings

A. Time

B. Generation’s errors

C. Customer Service

D. Availability of information

E. Periods of Collection

F. Decrease of frauds

Digital Scheme ( 2005 )

Direct Savings

A. Printing

B. Conciliation

C. Processing

D. Storage

E. Physical shipment

100%

$27.00 $20.00$130.00

Considering storage cost for 5 years

Cost:

Benefits of the e-Invoice

Service Improvement

Attention time

Periods of collection

Periods of recovery of portfolio

BenefitsOperation Savings

Generation Errors

Conciliation

Processing

Physical shipment

Typing errors

Availability of Information

Costs Savings

Printing

Storage

Physical Shipment

Decrease of frauds

StatisticsYear 2005 2006 2007 Total

Taxpayers 201 1,422 5,916 7,539

Individuals 64 433 4,419 4,916

Enterprises 137 989 1,497 2,623

+ 50,000

Issuede-Invoice

Taxpayers

+ 5,000,000

+ 50,000,000

October 2007

Federal State 84.59%

Distrito Federal 53.87%

Estado de México 16.98%

Nuevo León 6.73%

Jalisco 4.15%

Guanajuato 2.86%

Statistics

October 2007

Sector - Small & Medium Company 100%

Industry 51.72%

Commerce 25.55%

Services 21.47%

Primary Sector 1.07%

Professionals 0.19%

Tax Payers Type 100%

Small & Medium Company 95.56%

Corporate 4.44%

Sectors

October 2007

Statistics

Sector - Corporate 100%

Industry 48.30%

Commerce 30.27%

Services 20.41%

Primary Sector 0.68%

Professionals 0.34%

October 2007

SectorsStatistics