Watch the entire webinar here: https://www.youtube.com/watch?v=ThnDKUZW8gI&t=8s
Baz: Hello everybody! Welcome again to the monthly show LatamZone. This is where we talk about our localization solutions for NetSuite from LatamReady, the number one NetSuite partner for international multi latin companies! Today topic is an introduction to NetSuite and Argentina, everything you need to know! Today we have the usual suspects, Carlos Zumaeta our CEO and Glenn Haesendonckx our sales manager at LatamReady and we have a special guest, Edgard Carpio who is our senior architect manager, a.k.a our NetSuite guru.
Carlos: Our Gaucho, or Argentinian cowboy!
Baz: How are you guys doing today?
Glenn: I’m excited I think it’s always nice to have these webinars to share our ideas about what we’re doing with the company and with NetSuite, today specifically we’ll talk about Argentina
Carlos: Argentina has been a target country this year
Glenn: Argentina is one of the big four. We have Brazil, Mexico, Colombia, and Argentina. These are the four countries where we sell the most, where we have the most clients but also where we have the most challenges.
Carlos: We are receiving a lot of media industry customers with subsidiaries in Argentina.
Baz: A lot of media companies in Latin America come from Argentina
Carlos: Exactly! We met Entravision at the FOMLA even we went last year. A lot of companies with operations in Latin America also have a subsidiary in Argentina. It’s the land of creativity here in Latin America.
Glenn: Apparently it is! I didn’t know that but apparently, Argentinians are very good in the media space.
Carlos: And also very good in the tax compliance space.
Baz: We’ll cover some main topics that a lot of people have been asking us about.
Carlos: We’re going to start with electronic invoicing, am I Edgard?
Edgard: That’s right! Electronic invoicing and how the user can manage taxes and withholding taxes.
Carlos: they’re very complex right?
Edgard: Yes, all of the possible combinations we can have
Carlos: Could we say that Argentina is the most complex country in Latin America, maybe in the world when we talk about withholding taxes?
Edgard: It’s on the top three
Baz: Today we have a demo of electronic invoicing, right?
Carlos: Yes, we’re going to have a demo from Edgard presenting what we have for Argentinian companies.
Glenn: What we really want to show our viewers is how a global ERP like NetSuite can be deployed in Argentina. What people really need to understand is how we can modify NetSuite for it to be compliant with regulatory requirements in Argentina.
Baz: Nice put! It’s basically best practices for NetSuite.
Carlos: We’re going to discuss three topics. The first will be electronic invoicing, followed by taxes and withholding taxes and finally legal ledgers. As many of you know electronic invoicing is a local, legal, regulatory requirement in Argentina and many countries in Latin America. The requirement is to produce a specific XML and also a PDF file, which is the graphical representation of that XML file.
Edgard: The XML file has the legal format and structure from the tax agency.
Carlos: The legal document is not really a document, it’s the XML file. We’ll discuss how we handle that requirement for Argentina.
Edgard: This document will have a legal number in Argentina, which is called CAE.
Carlos: We’ll also discuss taxes and withholding taxes. What we offer for Argentina is standard NetSuite sales taxes withholding taxes, we have developed an engine ready to support the multiple cases that Argentina requires. This is called LatamTax.
Edgard: That’s correct. We use the standard feature from NetSuite, only for the BAT (or IVA in Spanish), for withholding tax combinations, or withholding tax types that Argentina requires, LatamReady offers a tax aging (8:43”) for these purposes.
Carlos: Finally we will discuss about legal ledgers. There are a lot of legal ledgers in Argentina.
Edgard: Yes BAT report about the sales and purchase transactions, a specific tax declaration on the txt (9:05”) files about the withholding tax and according to the withholding tax type.
Baz: Yes! We’re going to be covering a lot of important things! A lot of people should be watching us right now!
Carlos: Let’s jump to the demo!
Edgard: Here we have the demo instance in Oracle NetSuite. I will show you all the features that LatamReady includes for Argentina localizations. First, let’s look at electronic invoicing. For electronic invoicing, first, we need to set specific values or requirements on the customer record. LatamReady offers a lot of custom fields in order to complete specific classifications from the tax authorities according to each customer. These are specific classifications from the tax authority and other information needed to create the XML file which will be sent to the tax agency. On the customer record, we need to set specific taxes or withholding taxes. In the case of Argentina’s customers, we need to set the percepcion, which is a withholding tax type. In the invoice transaction that the user creates in NetSuite, the user needs to complete all the LatamReady or localization fields. In Argentina, we can find a lot of document types such as factura A, factura B, etc. according to the company type. Before sending this information to the tax agency, the user needs to classify the invoice transaction.
Carlos: That’s very interesting because in the US or in the UK an invoice is an invoice and that’s it. In the case of Argentina, you’ll find different types of invoices, with different information that has to be sent to the local tax agency. LatamReady offers an intelligent way for the user to register correctly
Edgard: LatamReady includes a mandatory feature that the user needs to complete in every transaction. Another very important field is the point of sales. The tax agency has to authorize the point of sales for every company, this is necessary when we generate the configuration in order to send the correct information, considering the point of sales and document type.
Carlos: A point of sales is a warehouse that’s allowed to issue invoices.
Baz: Just to be clear. When people have to select the document type to make the electronic invoice, where in NetSuite can we select?
Edgard: The user can select these LatamReady fields. For example, the user can select the correct legal document type and then here they can select the point of sales.
Baz: That’s great!
Edgard: LatamReady works with a standard bundle of electronic invoicing. NetSuite has this bundle and we work inside of it in order to set specific templates by document type. These are XML templates according to the document type. We have one template for factura A, another template for factura B and so on.
Carlos: We are using the NetSuite electronic SuiteApp, that’s a standard feature, as a technical platform in order to produce a specific XML file that’s required in Argentina.
Edgard: We have templates and scripting in order to set the configuration and connection with the tax agency.
Baz: Great!
Edgard: On this tab the user can find a response, like a PDF or xml file, and the final response for the tax authority. This information is saved in the file cabinet in NetSuite.
Carlos: How does this connection work? Well, we offer a full support and on the back end we offer a connection with a local partner who’s subcontracted by us. This local partner is directly connected with the local tax agency. At the end the customer has one single point of contact, which is LatamReady, that’s subcontracting a local player in order to be connected to the tax agency.
Edgard: (…) 3:47 authorized provider for the tax agency.
Carlos: The tax agency asks for a local company with a local authorization. We use it as a bridge.
Baz: Not any local partner, it has to be certified.
Carlos: Exactly.
Edgard: Finally, every time the user makes a transaction he receives an email with the status, the invoice number, the XML file, and the PDF.
Carlos: What we’ve seen so far is inside of NetSuite. The user is not required to go outside of NetSuite to complement anything.
Edgard: Correct.
Baz: When someone sends a transaction within NetSuite they’re going to automatically get an email from latamready?
Edgard: The process is first the user generates the file and when the user clicks on the button send invoice, the information is sent to the tax agency and then when the tax agency approves (or maybe rejects due to error) the user will receive this information through an email.
Baz: That’s good to know!
Edgard: The second topic is taxes and withholding taxes. As we mentioned before, we use the standard feature tax code that NetSuite suggests in every implementation. But in the case of withholding taxes, LatamReady offers a withholding tax aging or tax aging called LatamTax. This way you can set all the possible combinations that the vendor needs. Combinations about retencion, which is a withholding tax type. In Argentina you can have more than one type of retencion: retencion de ganancias, like the income tax, retencion de impuestos brutos, the local withholding tax, retencion de IVA is related to the BAT, etc.
Carlos: Just for our followers to understand, a withholding tax is very usual in Latin America. Let’s say that I receive a bill from a supplier, and instead of paying a 100% of the bill to the supplier I pay him a certain percentage and I go to the local national bank to pay the rest of the invoice. The company collects taxes on behalf of the local government. I would generate a withholding tax certificate and present that to my supplier. This is the way our local governments collect taxes.
Baz: Thank you for that description it really helps because a lot of people ask us what are withholding taxes?
Carlos: In Argentina’s case we’re going to find a lot of business cases for withholding taxes.
Edgard: You’ll find local or national withholding taxes. Every time you pay taxes, you not only pay to one tax agency, but you also have to pay to the national tax agency and to the local tax agency according to the withholding tax type.
Carlos: So I should improve my example of Argentina.
(laughs)
Baz: What else do we need to know?
Edgard: This is the vendor record, very similar to the customer. In this case, we need to complete the contributory class, this is a custom record in LatamReady that the user needs to set every withholding tax that the vendor needs in order to apply this combination every time a bill payment is generated. This is an example of a percepcion o retencion de impuestos brutos, where we need to set the type, the subtype, the rate…how LatamReady will work with this calculation. Normally in the invoice, we use percepcion, which works in NetSuite like a new item line.
Carlos: This is similar to the withholding tax from NetSuite (…) 19:53 where you have an item, a service, an item, a service and then an additional line for the withholding tax.
Edgard: Yes, it’s very similar. Normally withholding taxes work in two different ways. Every time you issue a document, sales or purchase document, this is related to percepcion. The second withholding tax type is when you issue a payment, which is retencion.
Carlos: So basically, you withhold when you register or when you pay, or both cases.
Edgard: In this example, the contributory class applies for the vendor. We need to set which transaction we use this withholding tax. (…) 20:42 For vendors we need to set how LatamReady will calculate, this is called LatamTax purchase. All this information is normally updated monthly in each vendor record, related to impuestos brutos o ingresos brutos.
Carlos: Just for our followers to understand, this our first configuration. It’s something that we have to perform once at the beginning of the project or if we have an update to perform.
Edgard: Withholding taxes related to ganancias, or income tax, are normally set once in the project. But every month we have other withholding tax types that we need to update in every entity.
Carlos: But this configuration only happens once, right?
Edgard: This is ingresos brutos which is the monthly contributory class or withholding tax. We need to update it using a CSB template in a specific tax agency, and in another case like (…) 21:52 we have a web service connection, so you can click on the button and the information is updated automatically.
Carlos: This configuration happens once, but rates are moving specially padron, a withholding tax rate related to ingresos brutos. We have a direct connection with the local tax agency in order to update those specific rates inside of NetSuite with all the suppliers.
Edgard: There’s another withholding tax rate related to ganancias, they are fixed yearly and we can set specific subtypes like honorarios, which apply for professional services. In this case, the tax agency published a table with a specific range, amounts, minimum amounts, and not taxable amounts, etc. We can set this information in this table. Finally, with this information that you set in every vendor, we create bill payments, where we create a bill credit according to the withholding taxes that the vendor has. Each bill credit is applied to the original bill in order to reduce the amount remaining of this transaction.
Carlos: That way the customer pays the correct amount of money.
Edgard: Correct. Finally, I’ll show you the report generator that LatamReady includes. With this feature, you can generate the tax declaration for withholding tax types, withholding tax amounts, BAT on sales, BAT on purchases. For example, we can generate a txt file about percepciones de impuesto brutos, or retenciones de impuesto brutos, or retenciones de IVA, or withholding tax for BAT and other files like sales or purchase ledgers. For all of these files, you can select the Argentinian subsidiary, specific accounting period. If you implement multi-booking with multiple accounting books you can select the local book where you need to get the information.
Carlos: That’s very interesting because we usually find American customers working in Argentina using the global chart of accounts in US dollars following American GAP (24:50) rules. What we’re seeing here is that we have the ability to jump to the secondary book to produce the local legal Argentinian book based on that book.
Edgard: In any accounting book.
Carlos: The customer can decide to have the primary book set as the Argentinian book
Baz: So what you’re saying is that you can work on one book and the other books are simultaneously worked on as well.
Carlos: We can select from where you want to produce the legal book. Legal books are usually changing, am I correct?
Edgard: Yes they change many times throughout the year or at the end of the year in order to have the annual tax declaration the next year.
Carlos: One important thing to know is that in Argentina, legal ledgers have to be produced monthly.
Edgard: Monthly in a specific testify (…) 26:02 quarterly
Carlos: Monthly, quarterly, and annually. The reason for having those books the Argentinian government looks for control and they want to know how much you’re selling and purchasing every month. They review that quarterly and annually to make sure you’re paying the correct amount of taxes.
Edgard: When the user generates the files in this option, LatamReady produces this information and the user needs to download it, go to the tax portal or maybe install a specific application in a PC or laptop and then upload the file.
Carlos: Is Argentina still requiring printing books?
Edgard: Only in the case of general ledgers, such as libro diario o libro mayor, it’s still necessary to print a PDF.
Carlos: Right. Argentina is now migrating from printed ledgers to electronic ledgers.
Edgard: Argentina now requires electronic formats for taxes and withholding taxes.
Carlos: One last thing about legal reports, there are also local legal ledgers in Buenos Aires, am I correct?
Edgard: normally you can have ingresos brutos in every Argentinian state or provincia, so you’ll have a specific file by provincia.
Baz: For our viewers, I know that the demo that we were showing earlier didn’t seem that clear on screen, but we would love to show you a proper demo so don’t forget to give us a call at 786 600 2641. If you want us to video call with you so we can show you how to make NetSuite work for you in Argentina or in any other Latin American subsidiaries
Carlos: We can also invite our users to LatamDojo!
Baz: Yes! We have the best online training platform, would you like to talk about it Carlos?
Carlos: This was just a 25 minute demo where we presented the main ideas, but if you want to dig deeper you can go to latamdojo.com and you’ll find specific information about how to produce legal ledgers, which legal ledgers we support and also what we are going to support in our new versions.
Baz: Not only for Argentina but for all the other Latin American countries that we support. It’s very easy to log in! You can create a free user account just by going to latamdojo.com as simple as that!
Carlos: Any last comments?
Glenn: I think LatamDojo is a great start. And if people need more information they can always set up an additional demo. Edgar is in charge of that and it’s very valuable.
Carlos: What’s happening with LatamReady for next year’s version?
Edgard: We’ll add more tax declaration and other withholding tax type, also an enhancement for LatamTax.
Baz: Thank you, everybody, so much! We covered electronic invoicing, taxes, withholding taxes, legal ledgers from our experts at LatamReady. Thank you, Edgard, Carlos, and Glenn. Until next time! We’ll see you at our next webinar! Check out latamzone.info for the next webinar
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