CFDI version 4.0 enhancements

As of July 1st 2022, it is mandatory to include the name of the issuer and the receiver of the electronic invoice (CFDI) in Mexico. In addition, all names must be in upper case, and a suffix indicating the type of company is not allowed.

To comply with the new regulations:

  • CFDI 4.0 must include the legal name and legal address of the invoice-from and invoice-to parties.
  • Legal names must be in capitals, which is handled by Infor Localizations Services Platform (LSP).
  • CFDI must contain the tax regime of the receiver.
  • The ObjetoImp field has been introduced to indicate if the product or service is taxable.
  • The business partner code must be amended so that it does not include the suffix for the company type. For example, Infor Mexico Softwares , S.A. de C.V. must be changed to Infor Mexico Softwares in the Business Partners (tccom4500m000) session.
  • The tax type used for all sales invoices must be set to On Payments in the Tax Codes by Country (tcmcs0536m000) session.
  • Payment Complement 2.0 has now been introduced and will be mandatory in Mexico from January 1, 2023.
  • Payment Complement 2.0 is compatible with CFDI 4.0.
  • The ObjetoImpDR field has been introduced to indicate if the product or service is taxable.
  • Payment Complement 2.0 helps identify whether an invoice has already been paid.
  • Payment Complement 2.0 must be generated no later than the 10th calendar day of the next month in which the payment was received. For example, if a payment is received on July 12, then the payment complement must be generated no later than August 10.

See also KB Article 2243390.

Foreign payments on withholdings

The Withholdings and Payments Information CFDI is a voucher that includes the withholdings and payments that are done. It is an electronic document, similar to the CFDI invoice, that details the VAT withholdings and payment information for a specific supplier. This document is usually issued in January for withholdings that are related to the past year.

Before the electronic VAT withholding and payment information CFDI is sent to the SAT, it must be certified by a PAC, with a digital stamp applied. The CFDI can then be sent to the recipient and used in the event of a transaction or tax requirement.

If foreigners receive payments for a wealth source located in the Mexican national territory, the Foreign Payments Complement for the Withholdings and Payments Information CFDI is applicable. Foreigners must pay income tax in Mexico only for wealth sources.

According to the ISR (Tax Income) Law, Title V, this document applies to these wealth sources:

  • Subordinate salaries or personal services
  • Retirements, pensions, and others
  • Independent personal services or fees
  • Remuneration of directors, administrators, commissioners, and general managers
  • Real estate leasing
  • Leasing of movable property
  • Affreightment
  • Shared time
  • Alienation of real estate
  • Disposal of shares
  • Exchange of public debt for capital
  • Financial operations derived from capital
  • Dividends
  • From non-profit legal entities
  • Financial leasing
  • Royalties, technical assistance or advertising
  • Construction sites
  • Awards
  • Artistic, sporting activities or public shows
  • Debts forgiven
  • Granting of the right to participate in a business
  • Compensation for damages and criminal clauses
  • Disposal of commercial credit
  • Income from premiums to reinsurers

Any other income not specified in the ISR (Tax Income) Law, is not considered to have a Mexican source of wealth.

Because only specific payments to foreigners must be included in the file, payments are now classified. The Reason for Payment field has been added for this purpose. The reason for payment is sent in the PayableTracker BOD of the payment transaction. A translation table is available in LSP that indicates whether CFDI withholdings are required for a particular reason.

Payment transactions can be created in these ways:

  • By using a cash transaction type in the Transactions (tfgld1101m000) session.

    If the Type of Transaction is set to Payment Transaction, the Reason for Payment is retrieved from the invoice, but it can be changed.

  • By using a payment batch in the Process Payments (tfcmg1240m000) session.

    A payment batch is first created with the payment advice lines. In the Payment Advice Lines (tfcmg1101m000) session, the Reason for Payment field is displayed on the Payment/Bank Details tab.

HS codes support

In Mexico, these catalogs, which are used to classify items and services, are published by the SAT:

Catálogo CFDI 4.0
The section c_ClaveProdServ includes all the Commodity Codes (HS codes) that are used for domestic trade and are mandatory when creating an electronic invoice (CFDI).
Fracción Arancelaria
This catalog uses tariff codes and is intended to classify the items that are subject to import and export. The codes are used by the SAT to determine if the import item or export item is taxable and to calculate the applicable tax rate.

The HS Code field in the Items (tcibd0501m000) session is used to determine the commodity code for an item. However, previously, a commodity code and tariff code could not be linked to an item at the same time.

Now, when a billable line is created, new logic is available to retrieve the HS code from the correct classification scheme. Fields have been added to the billable lines to enable modification of the retrieved classification scheme before the invoice is created.

Additionally, the Classification Scheme value has been added to the Origin for Catalog of products / services field in the Mexican Parameters (lpmex0100m000) session. Set this field to Classification Scheme if you want to use the new logic HS code logic for Mexico.

If an order is created for two Mexican companies, the HS Code is retrieved and published in the Sync.Invoice BOD. If imports or exports are involved, for example a sales order between a company in Mexico and a company abroad, then both the HS Code and the Tariff Code are published in the SyncInvoice BOD.

Invoice cancellation

The Canceled in PAC Portal field has been added to the CFDI Information by Document (lpmex1500m000) session. If this field is set to Yes, the invoice was manually canceled in the SAT portal.

After the invoice is (manually) canceled in the SAT portal, these actions are performed:

  • You can set the invoice to Canceled in LN CE.
  • If a credit note is linked to the canceled invoice, the SyncInvoice BOD for the credit note includes a new tag. This tag indicates that the invoice is canceled in the SAT portal, so that Localization Services Platform (LSP) does not communicate the change to the PAC.
  • A new billable line is created automatically. If required, you can modify specific line data, such as the payment terms and address details. This billable line is used to compose a new invoice with a reference to the canceled invoice, so that the SAT knows it is a replacement.