Peru Electronic Invoicing and Reporting Requirements

INVOICEWARE INTERNATIONALGlobal Compliance - Simplified

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Latin America E-Invoicing & ReportingIt is All About Maximizing Tax Collection

Importance of VAT to Latin America Economies

Brazil NFe – allowed them to collect ~58 Billion USD in a single tax year Mexico SAT – 34% increase in VAT collections (~5 Billion USD) in 1H 2014

due to CFDI automation Colombia: 50% reduction in VAT and corporate tax evasion could bring

more than COP 15 trillion (USD 8 billion) in additional revenues.

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Latin America E-Invoicing & ReportingWhat is VAT?

Minus

Tax You Charge Your Customers

Tax You Pay Your Suppliers

Tax You OweTo Government

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Tax Authorities Control an End To End ProcessGovernment standardized XML linked to VAT Tax reporting = Real Time Audits

Supplier Registers XML

Government XML Standard Only Legal document Registers VAT Tax Obligation

PDF Accompanies Truck

Copy of Invoice OR Signed Shipping Document

depending on country

VAT Tax Linked to XML

Buyer only able to take VAT tax credits that are linked to approval codes in supplier XML

Errors or corrections are the buyer’s issue to get fixed

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Governments: Constantly Changing & AcceleratingFrom 3 to 10 Countries in less than 2 Years, More Business Processes Affected

2013 2014 2015-2016

AR eInvoicing

AR eInvoicing

AR eInvoicingAP eInvoicingFreight InvoicesSPED ECD

AR eInvoicingAP eInvoicingNominaeContabilidad

AR eInvoicingProforma VAT

AR eInvoicingAP eInvoicingFreight InvoicesSPED ECDSPED ECFeSocial

AR eInvoicingAP eInvoicingLibros Reports

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The Take Away

What the Government Wants Maximize VAT Collection

What

What Your Company Wants Maximize VAT Deductions

Versus

VAT Tax Averages 18% of Sales Across Latin America$100 Million in Sales = $18 Million in Cash Flow Annually

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Solution RequirementsSimplify Complexity Today, Manage Change in the Future

Cash, Compliance & CostEfficiency & Stability

CFO

ObjectivesHow do I automate processes with

my customers and suppliers?

How do I streamline transparency of

reporting & cash flow?

Efficiency On-time delivery

Lower Inbound Receiving costs

Accurate tax reporting & IVA Credits

Complete audit trails

Cost Employee productivity

Cost and time of shutdowns

Tax penalties, missed deductions

Cost of closing books monthly

Flexibility Automated Contingency in place

Process workflows

Working capital optimization

SAP as single system of record

IT Consolidation

Chief Information Officer

How do I provide value with fewer

systems and lower costs of upgrades?

Effort build, integrate, and maintainSAP & multiple country solutions

Staff, Solutions, Infrastructure

Annual upgrades & consulting

Stable budgeting vs. fire drill projects

Buffer SAP from change

VP Supply Chain

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Multiple Solutions• Local country solutions

• Middleware interfaces

• SAP ERP updates

SAP not System of Record• Data is changed in 3rd party

tools not in SAP ERP

Who Supports?• Search & Rescue Missions

Who Maintains?• Alignment with SAP ERP –

global regression testing?

• Ongoing knowledge of what was done and what needs to be done

IT – Traditional Approach is CostlyMultiple Solutions, Constant Upgrades

SAP

ERP

Middleware

Integrate the

System

Different

Solutions for

Each Country

CUSTOMER

IDOC1

2

3

4

5

Monitor #1 Monitor #2 Monitor #3-6

Who

Supports

Who

Supports

Who

Supports

6

7

8

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Supply Chain – Business Impact is SubstantialMission Critical Timing & End User Productivity

Invoicing Can Shut Down Operations

Government approved documents are needed to ship legally. Built in back up processes ensure you can always ship.

Level 1 - On Network Contingency

Level 2 – On Premise Contingency

Automatic Reconciliation to get invoice registered when systems back on line

Standardization can drive down costs

Use XML Invoice and PDF on trucks to lower cost in inbound receiving

Automated Purchase Order – Invoice matching before the truck arrives

Eliminate data entry at warehouse by scanning the PDF for data entry

Manage discrepancies and trigger government processes (return orders, gov’t status messages)

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IT – Financial Accuracy Equals Cash FlowVAT Remittances & Working Capital Issues

Working Capital Optimization• Accurate invoicing equates to lower DSO & less returns

• VAT tax obligations & deductions equal millions for multinationals

• Transform mandated compliance into Supply Chain Financing opportunities

Financial Reporting Accuracy - VAT

VAT obligations in Latin America – 16-22% of goods sold

Brazil VAT – based on physical movement of goods which means can owe even before you collect from your end customer

VAT Credits/Deductions must be linked to supplier’s registered XML

Finance Penalties – Local and FCPA for US Public Companies• Mexico - $3,000 per event (i.e. transaction) plus denial of deductions

• Brazil -75% to 150% of tax values - $50 Million dollar Chem business fined $3 Million by SEFAZ for deduction issues (page 30 of 10K)

• Foreign Corrupt Practices Act – SEC fines CPG company 4.2 Million of Mexico invoices issues; High Tech company FCPA issues approach $108 Million

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Invoiceware InternationalBusiness-to-Government Compliance Suite for SAP

Latin America Regional Platform

• Brazil, Mexico, Chile, Argentina, Peru, Ecuador, Uruguay & Colombia

SAP System of Record

• SAP sole system of record

• Single user interface inside SAP

Process Automation

• Automated Contingency – always be able to ship

• Lower Inbound Receiving & AP Costs

• Transactions & Reports are fully integrated

• Working Capital Optimization solutions

End to End Support

• End to End support in Portuguese, Spanish and English whether SAP issue or gov’t issues

Fixed Fee - Change Management

• All maintenance is covered by fixed cost annual fee (software & labor included)

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Invoiceware Solution CoverageRegional Latin America Compliance Platform

• Brazil• Nota Fiscal (NFe Goods, Services, CTe)• SPED & eSocial

• Mexico• CFDI & Nomina Electronica• eContabilidad

• Chile• DTE & Libros Reporting

• Argentina• eFactura multi-invoice types• Remitto - COTS

• Peru• Documents & Libros Reports

• Uruguay• Documents & Reports

• Ecuador• Documents & Reports

• Colombia – Pending

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SUNAT Requirements Requirements in Peru to Legally Operate under E-Invoicing Legislation

Readiness Declaration Real time communication with the SUNAT fro Electronic Documents

Folio Range for paper invoices

Documents must be stored for 4 years and you must make document available to client via the web portal for 1 year.

Return Status Messages – constancia de recepcion (CDR)

Contingency Processes – used when systems are down. Resend documents when systems are back up

Cancellations - you have 72 hours after receiving the CDR (Communicacion de Baja)

Daily Summary – sent daily or at the latest the 7th calendar day

Inbound Reception – Accept or Reject Supplier XML in 9 days or create a Tax issue whereby supplier invoice must be altered at Gov’t with Credit/Debit

Shipping Affected – Invoice, Guia de Remision, and Guia de Transportista must be on truck

Audits Affected Programa libros electronicos (PLE) - compras y ventas. Income equal to or

greater that 150 UIT = $180,000 USD

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Homologacio Process – Included with InvoicewareEnsure provider includes Certification as part of projects

This is part of the Authorization Process

Check if Invoices, Boletas de Ventas, Credit and Debit Notes, Daily Summary and Contingencies are with standards of the SUNAT

Bothe the Electronic and Paper Documents must pass the process Once Successful completion of the test, the SUNAT will issue a

Resolucion de Intendencia (R.I) There is both a Testing and Production phase

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ResourcesClick the links below for more information

[Webinar Replay] Peru SUNAT Announces E-Invoicing Mandate for All Multinationals

Are You Prepared for Peru’s Impending Libros Requirements?

Peru SUNAT mandates checklist

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Next Steps Contact Us To Learn More

+ 1800 – 988 – 0728www.invoicewareint.com