This document summarizes an upcoming webinar on Latin American compliance updates for Mexico, Colombia, and Brazil in 2017. It introduces the speakers and encourages attendees to submit questions early. It then provides context on the many changes coming to ERP systems in Brazil and Mexico as over 2 million companies will need to update. Key questions are asked about how these changes will impact businesses and if they are prepared. The document outlines some of the major updates and challenges coming to the compliance requirements in each country. It polls attendees on how their companies currently manage Latin American compliance requirements and closes by suggesting that outsourcing to a global compliance solution provider could help businesses address their challenges.

2. Presenting your speakers
Sarah Fane
Head of Research
sharedserviceslink
Steve Sprague
General Manager
Invoiceware by Sovos

3. Questions
• Send me your question early
• Use this opportunity to get the answers/info you
seek
• The sooner you send me the question, the more
likely it will be asked
• Remember to stay on for Q&A in the last 10 minutes
of the show

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5. Context
• 2017 is going to be a busy year for Latin America.
• For those operating in Brazil and Mexico there are some challenges
ahead as over 2 million companies will have to update their systems.
As a result there is the potential for gaps to appear within ERP systems
that could make life difficult.
• In addition Colombia and Brazil are getting ready to sunset their legacy
systems at the end of 2017 which will bring a wave of new challenges
and changes.
• As a result two key questions need to be asked:
1. What do all this changes mean for you?
2. Are you prepared to deal with them?

6. How does your company currently manage Latin
America’s e-invoicing and compliance mandates?
• Managed and Coordinated from Global HQ
• Managed and Coordinated from Regional Latin
America Office
• Managed independently at Country Level
Poll Question

7. Learn more at sovos.com
Latin America Compliance
Update: Mexico, Colombia
& Brazil
January 2017

8. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
8
Agenda
• Latin America Compliance – Gov’ts Turn To Automation to Collect Taxes
• Mexico 3.3 Overview
• Export Invoices
• Payment Receipts
• eFactura Upgrades
• Colombia – Update & Lessons from the Pilot
• Brazil 4.0
• Solution Recommendations
• Next Steps

9. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
9
Latin America E-Invoicing & Reporting
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 2016
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.
VAT Tax Evasion range from 25 to 50% of total potential

10. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
10
Business To Government Compliance
AR - Customer Billing
–Domestic Invoices
–Export Invoices
AP – Supplier Invoicing
–Used to justify VAT Deductions
Fiscal Reporting
–Transactions equal reports
–Reports trigger audits
Supply Chain
–Imports tied to in-country invoice
–Affects ability to ship to customer
–Can delay inbound receiving

11. Learn more at sovos.com
Mexico Updates

12. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
12
What's Coming in 2017 for Mexico
1. Complemento Comercio Exterior
• Version 1 – March 2017
• Version 1.1 – July 2017
2. Complemento de Recibo de Pago – July 2017
3. CFDI 3.3 – July 2017

13. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
13
Complemento Comercio Exterior – Cross Border
What is it: Must be used when a taxpayer is exporting goods with pedimento
code “A1”, which means that the goods are exported permanently.
Why is it being implemented: Currently the SAT does not have a way to identify
and link the foreign importer and the Mexican exporter. This leads to illegal
activities by the taxpayers. There is now going to be a total of 29 validations.
Important Validations:
• TaxId of taxpayer that is buying the goods
• Country that the goods are being exported to
• Validation updates regarding the identification of the product to various tariff fractions
Link to legislation:
http://www.sat.gob.mx/informacion_fiscal/factura_electronica/Paginas/com
plemento_comercio_exterior.aspx

14. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
14
Objective
Consolidate to just one document

15. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
15
Complemento de Recibo de Pagos
What is it: Is a complemento that needs to be incorporated in the CFDI that will be issued for
the receipt of payments. The recibo de pagos will be linked to the original CFDI. You can have
multiple recibos de pagos to one CFDI. You can also have one Recibos de Pagos for multiple CFDI
– you bill a single customer in January and they pay you for 50 invoices in one payment.
*Mexico is tracking the money
Why is it being implemented:
• The SAT was not able to track partial payments. With this new complemento you won't lose the relationship between the invoices and the payments.
• To be able to easily distinguish invoices vs payments
• Companies were paying the invoices without IVA
• Suppliers cancelling invoices after being paid by client
When does it have to be implemented: July, 2017 along with CFDI 3.3
Link to legislation:
http://www.sat.gob.mx/informacion_fiscal/factura_electronica/Paginas/Recepcion_de_pag
os.aspx

16. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
16
What’s Included
Complemento de Pagos
1.Fecha de pago (date of pmt) 8. Nombre del banco ordenante
extranjero (name of foreign bank)
2. Forma de pago (method of pmt) 9. Cuenta ordenante (payer’s bank
number)
3. Moneda (currency) 10. RFC del emisor de la cuenta
beneficiaria (taxid of the transmitter)
4. Tipo de cambio (exchange rate) 11. Cuenta del beneficiario (payee’s
bank number)
5. Monto (amount paid) 12. Tipo de cadena de pago (cadena
original)
6. Numero de operacion (check
number)
13. Certificado de pago (certificate
that validates the pmt)
7. RFC del emisor dee la cuenta
ordenante (taxId of bank of the
receptor)
14. Sello de pago (electronic seal)

17. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
17
Business Benefits
Situation without complement pago
• Duplicate information
• Inconsistencies in the imports
• Recalculations of imports and taxes
• Request for additional data
Situation with complement pago
• There is no duplication of information
• Inconsistencies are eliminated in the amounts
• A single calculation of the amounts and taxes
• There is no need to solicit data that already exit

18. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
18
FAQ
1.Can you reference multiple invoices in the pago?
Yes, you can reference multiple invoices in one pago
2. Who must sign the complemento de pagos?
The taxpayer who receives the money. Its purpose and function is to prove that the supplier received the money and that the
payment was made.
3. When are you mandated to create a complemento de pago?
When the goods are not paid in full at the time of issuing the invoice.
Example: POS (retail) would not be required
4. Information required in the complemento de pagos?
1. Data of who receives payments and who makes the payment
2. Amount of the payment or money received
3. Each and every invoice that was paid
4. As well as the amount paid to each partial invoice together with the unpaid balance of the total invoice
5. When is it mandated?
July 1, 2017 along with CFDI 3.3

19. Learn more at sovos.com
CFDI 3.3

20. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
20
CFDI 3.3
What is it: Is a new version of electronic invoices which includes more
information and improvements to the structure that was handled previously in
version 3.2.
Why is it being implemented: To collect more accurate transactional
information and to improve the quality of the data being collected.
When does it have to be implemented: July, 2017 along with CFDI 3.3
Link to legislation:
http://www.sat.gob.mx/informacion_fiscal/factura_electronica/Paginas/Rec
epcion_de_pagos.aspx

21. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
21
Main Changes
1. Unify values to manage homogeneous information and facilitate fiscal/audit
process (p.e Currency, countries). For this SAT will implement 17 catalogs using on
schema validations.
2. Introduce the conditional concept for some fields, and does not allow negative
values.
CATALOGOS CFDI V 3.3
1Aduana 7Método de Pago 13Tasa o Cuotas de impuestos
2Productos y Servicios 8Monedas 14Tipo de Comprobante
3Unidades de Medida 9Número de Pedimento 15Tipo Factor
4Código Postal 10País 16Tipo de Relación entre CFDI
5Forma de Pago 11Patentes Aduanales 17Uso de CFDI
6Impuestos 12Régimen Fiscal

22. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
22
There are now 46 validation rules and are classified as
follow:
1. Arithmetic: Rule by which numbers are validated
2. Rules that validate catalogs: Rule that validate the values entered
3. Conditional: Rule that validate one or more conditions or requirements

23. Learn more at sovos.com
Colombia Update

24. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
24
Colombia 2017 – Highlights
Technical Specification Published
In 2017 the DIAN will publish to “Catalogo de Participantes”
Factura Eletrónica requirements:
• Consecutive numbering of Document Types (Invoice, Credit, Debit, Export) & Contingency Paper
Process
• Detailing of National Consumption Tax (impuesto nacional de consumo)
• Validations (within 48 hours of Invoice generation) include a unique identification number CUFE
• PDF representation w/ QR Code
• XML necessary for verification and audit – UBL similar to Peru
• Acuse de Recibo – Recipient Acknowledgement to Supplier
• Libro for Sales & Purchases
• Catalog of Participants will be announced by DIAN, once named will have 6 months to complete
Homologacion & certification of process

25. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
25
Colombia Pilot Conclusions
• Pilot concluded October 2016 with 57 companies
• Companies not ready for cryptographic and digital signature
• The current model needs to evolve to real time validations
• Most of the situations presented focused on the structuring of the
XML, digital signature and CUFE calculations
• Colombia e-invoicing model is a mix between Chile and Peru. Looking
to add some aspects that Mexico uses
• Expect Catalog of Participants in first trimester of 2017
• Legislation still calls for ending of existing regime December 31, 2017

26. Learn more at sovos.com
Brazil Update

27. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
27
Brazil 2017
Common Issues with New Requirements
• Brazil 4.0 – Web Services are changing again with many new layout and data changes
• Product Traceability Fields for certain Industries
• New Total fields for IPI (Federal level taxes)
• ICMS Suspension – 3rd party manufacturers
Recovery XML – Inbound Validation Mandates
• Do you have all vendor XML back to 2009?
• Fine is approximately $200 USD per missing XML
• Gov’t released a new web service that you can download all of you XML from the SEFAZ web site – as a best
practice you should do this prior to receiving goods if XML is not in system
• Destinatario is becoming mandatory for more states & industries
SPED Reporting
• January 2018 - Block K – for SPED Fiscal on Inventory and Production Movements from companies over 78m Reias
• June 2018 - eSocial – HR & Payroll requirements 2016 Mandates
Key for eSocial is 3rd party contractor impact

28. Learn more at sovos.com
Solution Approaches

29. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
29
Business To Government (B2G) Compliance
Invoiceware Compliance As A Service for SAP ERP
Outbound Billing Advantages
 Single Monitor for End Users
 Automated Contingency to avoid shipping issues
 Automated Cancellations & Corrections
Inbound Account Payable Advantages
 “Okay to Deduct” – ensure invoices are compliant
 “Okay to Pay” – automate PO, Invoice, GR matching
 Audit Defense – ensure XML backs up reports
Fiscal Reporting
 SAP is system of record, not local 3rd party database
 Single version of the truth
 Data validations ensure accuracy prior to filing reports

30. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
30
Business To Government Compliance
Invoiceware’s – Global Expansion
2009
Brazil Nota
Fiscal &
SPED
2016
10 Countries
in Latin
America
2016
Cross
Border
Initiatives
Move to
Pilot
- US 
Mexico
- Br, Mx & Ar
Cross
Border via
CIAT
Global Expansion of
B2G requirements
• US – Sales Tax &
Reporting
• EU
• VAT
Determination
• eReporting
• Spain SII –
July 2017

31. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
31
How We Got Here. Why We Are Leading the Way.
Content Excellence
Taxware had the world’s best tax research, but it
lacked the nimbleness to keep up with the pace
of technology and regulatory change.
December 2012
Vista Equity
Partners Acquires
Taxware from ADP
April 2014
Taxware acquires VAT
Resource
July 2014
Taxware merges with
Convey Compliance
Systems
April 2015
Sovos acquires
ShipCompliant
July 2016
Sovos acquires
Invoiceware
International
1979
Nimble Software Business
Acquisitions of Convey, VAT Resource and
ShipCompliant provided the software
infrastructure and talented we needed to lead the
charge on cloud compliance.
Global Reach
Acquisition by London-based HG Capital and
the addition of the leading LatAm
compliance solution, Invoiceware, provided a
solid global foundation.

32. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
32
Multiple Compliance Solutions. One Platform.
Indirect Tax
1099 Reporting
Beverage Alcohol
ACA
AEOI
Sales Tax Filing
LatAm Compliance
VAT Reporting

33. What are your Company’s biggest challenges in e-invoicing and
reporting compliance in LATAM?
• Do not understand requirements
• Do not feel confident in maintaining compliance with on-going
changes
• The need to work with multiple local third-parties
• Time and cost updating systems
• Time and cost of staff associated with managing mandates
Poll Question

34. Proprietary and Confidential the information and materials in this document are not for use or disclosure outside of Sovos Compliance, LLC. except under express written consent.
34
Contact Us Today
info@invoicewareint.com
Learn more and stay up to date by following our Latin America
Compliance Blog:
http://www.invoicewareint.com/enewsletter-and-blog-subscription
Questions & Next Steps

35. www.sharespace.digital
The slides will be available
after the webinar on
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networking site for shared
services professionals with
both free and premium
subscriptions.
Find out more about premium subscriptions by emailing
enquire@sharedserviceslink.com

36. Next on sharedserviceslink
Webinar series

37. Next on sharedserviceslink
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38. Thank you
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