Regulatory updates - El Salvador

According to the Legislative Decree No. 94 of 2024, the fields in the “Recipient” section are considered optional unless:

• The transaction amount is USD 25 000 (ca. EUR 22 900) or more;
• The customer requires the invoice to document the transaction (regardless of transaction value);
• When the invoice should prove deductible expenses or costs for the fiscal year.

For the above transactions, it is mandatory to include the recipient’s name, denomination, business name or company name and identification number. The identification number can be a Tax ID number, passport or residence card number, Unique Identity Document number, tax registration number in the country where the customer is liable for tax or the number of another document that identifies them.

Furthermore, when a customer is a legal entity, denomination or company name must be included, regardless of transaction amount.

Penalty introduced for non-compliance

In the previously mentioned cases, where an identification number or identification name is required, and the supplier does not provide that information, a fine equal to 30% of the transaction amount of each document is imposed or, as a minimum, two monthly salaries in the commerce sector.

Timeline

The reform came into force on 27 September 2024.

Starting 1 January 2025, it will be mandatory for businesses obliged to issue electronic documents to start issuing only e-tickets to final consumers.

More information can be found under the following link, point 15, pages 22-23 (in Spanish).

On 17 March 2023, The Ministry of Finance (MH) of El Salvador made adjustments to the Json schemes of various electronic fiscal documents (Documentos tributarios electrónicos or DTEs) related to the electronic invoicing regime.

What documents are affected by this change?

This update modified different nodes of the JSON schemas of eight DTE types. Below, we mention the main changes by document type: 

- Electronic invoice (Factura electrónica or FE): codEstableMH, codEstable, codPuntoVentaMH, codPuntoVenta, numberDocument, payments, balanceFavor, numPagoElectronico, taxes, observations, license plate.

- Electronic Receipt Tax Credit (Comprobante Crédito Fiscal Electrónica or CCFE):  document number; taxes; balanceFavor, and numPagoElectrónico.

- Electronic Remittance Note (Nota de Remisión Electrónica or NRE): codEstableMH, codEstable, codPuntoVentaMH, codPuntoVenta, taxes.

- Electronic Credit Note (Nota de Crédito electrónica or NCE): amountDescu, taxes, withholding, and numPagoElectronico.

- Electronic VAT Withholding Receipt (Comprobante de Retención IVA Electrónico or CRE):  business name, MH code, code, point of sale MH, point of sale [of the issuer], business name, address, telephone, e-mail, description [of the receiver], etc.

- Receipt of Electronic Settlement (Comprobante de Liquidación Electrónico or CLE):  codEstableMH, codEstable, codPuntoVentaMH, codPuntoVenta, nombreComercial, telephone, articles, taxes, etc.

- Electronic Settlement Accounting Document (Documento Contable de Liquidación Electrónico or DCLE): vat, ivaPercibido, ivaComision, percentComision, codEmpleado.

- Electronic Export Invoice (Factura de Exportación Electrónica or FEXE): typeContingency, reasonContingency, codEstableMH, codEstable, codPuntoVentaMH, codPuntoVenta, name, nombreComercial, descActividad, telephone, discount, numPagoElectronico.

Who do these changes affect?

It affects taxpayers who have voluntarily adopted the e-invoicing regime, given that, to date, no groups of taxpayers are required to implement DTE. Notwithstanding the preceding, the Ministry of Finance has provided a "search engine" with which taxpayers may consult whether they are in the scope and look up the timelines for issuing Electronic Tax Documents. This query can be performed with the Tax Identification Number (NIT) with the Unique Identity Document (DUI).

As previously explained by Pagero, Decree 487 defines electronic documents as Electronic Tax Documents (Sp.: Documento Tributario Electrónico).

Tax Authority will decide on the outline

Furthermore, the decree states that the Tax Authority (Sp.: Ministerio de Hacienda) will have the administrative power to establish, among others, listed in article 1:

• Technological instructions and specifications for the generation and delivery of Electronic Tax Documents;
• Data structure and format of the Electronic Tax Documents (which will be in a local JSON format);
• Form, terms, and conditions for the fulfillment of the transmission of Electronic Tax Documents;
• Timelines for taxpayers to start issuing Electronic Tax Documents.

In the meantime, taxpayers can begin to issue e-documents voluntarily.

What are the next steps?

The Minister of Finance is expected to release a mandate calendar with specific dates for starting issuing electronic tax documents. At the same time, more information regarding technical aspects and processes is going to be released.

The Legislative assembly approved the Decree amending the Tax Code to implement e-invoicing - an initiative proposed by the Minister of Finance.

Introducing electronic fiscal documents (DTEs)

The new amendments to the Tax Code introduced definitions such as electronic fiscal documents (Sp.: Documentos Tributarios Electronicos or DTE). These are the documents generated, signed and transmitted electronically to the Tax Administration and possessing a receipt stamp.

The TA puts the receipt stamp once an electronic document has been sent to the mandatory infrastructure. The stamp does not indicate document clearance by the Tax Authority but confirms the transmission of the e-document to the local authority and becoming qualified as a DTE.

Which documents can be DTEs?

The DTEs introduced are, among others:

• Electronic Tax Credit Invoice – Sp. Comprobante de Crédito Fiscal Electrónico
• Electronic Invoice – Sp. Factura Electronica
• Electronic Export Invoice – Sp. Factura de Exportación Electronica
• Electronic Debit and Credit Notes – Sp. Notas de Débito y Crédito Electrónicas
• Electronic Remission Note – Sp. Nota de Remisión Electrónica
• Electronic Donation Receipt – Sp. Comprobante de Donación Electrónico

Furthermore, the Tax Authority plans to offer a free e-invoicing system for taxpayers who cannot buy or develop a proper solution.

The timelines and technical details are yet to be announced and published by the government. Stay tuned with Pagero to keep up with all the ongoing developments in El Salvador.

The Continuous Transaction Controls (CTC) model is expected to be very similar to the one in Chile, with a particular difference in the format file. Taxpayers will need to send the e-invoice in a JSON format with the electronic certificate to the Tax Authority (DGII) for invoice clearance. Once the invoice is approved, the taxpayer sends the invoice in a non-regulated format to its customer.

Furthermore, there needs to be an agreement on the invoice format between the supplier and the buyer, and common practice is to send a PDF via e-mail. After receiving the invoice from the supplier, the buyer has the option to validate it with the Tax Authority.

The date when it will become mandatory to issue e-invoices in El Salvador has not been stated yet. However, as soon as the e-invoicing regime is available, taxpayers will have the option to adhere to the system under certain requirements.

Pagero is already working to offer a fully digitalised solution for our customers to issue or receive electronic documents in the country. We are closely monitoring the developments in El Salvador to provide you with the latest information.

Initially, 50 major companies from different industry sectors joined the pilot phase, and it is expected that by the end of 2021 medium and small-size companies are able to adopt e-invoicing too.

El Salvador has investigated e-invoicing models from other Latin American countries. Costa Rica, Brazil and Mexico have been taken as a reference due to their vast experience in e-invoicing.