The way to collect taxes nowadays is bringing headaches to the finance ministries of Latin America and the world.
According to a report published in March by ECLAC (Economic Commission for Latin America and the Caribbean), Argentina (21%), Colombia (19%) and Uruguay (22%) already charge VAT on digital services platforms such as Netflix, Spotify and Amazon. Costa Rica (8.5%), Paraguay (10%) and Chile (19%) are proposing to start applying it.
To be compliant with these changes in the tax system, the local government requires all big international companies headquarters to issue specific documents at the end of each period.
Therefore, if you are an international corporation that uses NetSuite and has subsidiaries in Latin America, you must have the best complement that is prepared for these possible changes in the local tax system.
How withholding taxes has been working in Latin America?
The Latin American region is known worldwide for its inefficient and unstable tax system, which is often a headache for every international corporation. But nevertheless, normally withholding taxes in Latin America work in two different ways. Every time you issue a document, sales or purchase document, this first withholding tax is related to percepción. The second withholding tax type is when you issue a payment, which is known as retención.
How has the digital age changed the tax compliance system in Latin America?
One of the most important change is the implementation of Electronic invoicing. Electronic invoicing (E-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. These reports synthesize all the monetary flow related to the withholding taxes, including percepción and retención.
What solution have LatamReady developed to address this change?
LatamReady works within NetSuite with a standard bundle of electronic invoicing. NetSuite has this bundle and LatamReady works inside of it in order to set specific templates by document type. These are XML templates according to the document type. LatamReady has one template for Factura A, another template for Factura B and so on. Having a virtual platform like that of LatamReady within NetSuite will allow its users to optimize the manual work of the workers and have all the required information in any corner of the world in a matter of clicks.
There is no other!
LatamReady is the #1 Tax Compliance solution within NetSuite for all big corporations using NetSuite. That’s why, to be aware of the changes that are happening regarding tax compliance in Brazil, Argentina, Mexico, Colombia, and many other countries in the Latin American space please check www.latamready.info. Or feel free to call one of our sales reps at +1-786-600-2641.
To know more about us, click right here: www.latamready.com