Compliance with strict e-invoicing, finance and tax reporting legislation throughout Latin America is not a one-time, set-it-and-forget-it process. The pace of legislative change in this region is faster than ever as governments aim to expand the tax base and collect every penny, peso or reais they can. New mandates commonly move from initial legislation through implementation and even reforms before companies can fully grasp the implications of these requirements. With the global trend of governments re-evaluating their indirect tax legislation to close loopholes, eliminate fraud and maximize tax revenues, corporate taxpayers should be concentrating on the performance of their indirect tax functions more than ever before.
As global companies continue to expand in Latin America’s emerging markets, spreading their reach into new territories and thus different tax regimes, they are encountering new liabilities and ever-changing reporting obligations. For example, in Brazil, the ICMS rate (tax on the interstate movement of goods) is now variable based on the ratio of imports within a bill of material. Other countries, such as Peru and Dominican Republic, have implemented some important changes in their local indirect and direct tax laws. Plus, Mexico is facilitating and opening possibilities for foreign businesses to trade or manufacture in the country by revisiting its local conditions and tax laws.
Any corporate oversights of these recent legislative or rate changes, minor errors in calculations or operational mistakes leading to compliance errors can be costly. Errors in VAT/GST deduction and payment functions can have far-reaching consequences that go well beyond the tax value. However, growth into Latin America also presents new opportunities for well-managed, performance-oriented organizations, and achieving these efficiencies hinges on the stability of internal accounting systems.
With upcoming changes to reporting legislation set to take effect in the next six months in Brazil, Chile and Argentina, senior finance and tax professionals need to understand the risks associated with these mandates.Join us for our webinar on Thursday, August 13, as we provide an in-depth examination of new requirements being implemented this year, including:
Companies are already struggling with the day-to-day support and change management Latin American compliance requires, and these new mandates further the complexities.
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