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Introduction
Since 2019, electronic invoicing has been mandatory for all taxpayers in Colombia. The Electronic Invoicing System (SFE) is managed by the National Tax and Customs Authority (DIAN). This system requires companies to submit electronic invoices for validation before sending them to customers.
Later on from 2023 and 2024, Colombia’s electronic invoicing obligation has expanded to more sectors. As this rollout continues, businesses will no longer be allowed to send paper or PDF invoices. This regulation includes both e-invoicing and e-reporting, requiring companies to submit invoices and transactional data to the tax authority (DIAN) in real-time.
Near the electronic invoices, we also have the electronic equivalent document in Colombia.
In Colombia’s electronic invoicing system, equivalent documents are digital receipts issued by the DIAN (National Tax and Customs Directorate) for transactions where a sales invoice is not required.
The Electronic Equivalent Document is defined as a document that:
- Records the details of a commercial transaction conducted by an entity not obligated to issue an electronic invoice.
- Meets all legal requirements.
- Is generated and transmitted electronically through a DIAN-authorized technology provider.
Additionally, adjustment notes are included as a mechanism to cancel or correct an electronic equivalent document when necessary.
E-Invoicing Colombia - new rules
DIAN has proposed changes to Resolution 0165 of 2023, which affect several aspects. These include electronic documents for airline tickets, transport documents, emergency measures for P.O.S. issuers, paper invoicing for taxpayers without internet access, and more flexibility in the graphical representation of documents. These adjustments will further regulate and simplify the implementation and compliance of electronic invoicing.
Companies must now ensure that their invoices comply with the XML UBL 2.1 format established by DIAN and must submit them for validation before sending them to customers. PDF invoices are not accepted as official documents.
To remain compliant, invoices must meet specific criteria, including authenticity of origin, integrity of content, and readability. Additionally, companies must include a unique identification code, known as CUFE (Código Único de Factura Electrónica), in each invoice. As well valid e-invoices in Colombia must include a QR code. For customers who cannot receive electronic invoices, they are sent a QR Code invoice for the transaction.
A revision in Resolution 000012 led the DIAN to modify the e-invoicing regulations by introducing the electronic container. This mandatory digital tool consolidates information from electronic sales invoices, debit notes, credit notes, and other billing-related electronic data, incorporating validation by the DIAN when required.
With this update, e-invoices must now include digital signatures to ensure document authenticity and integrity. The issuer is required to digitally sign the invoice in compliance with regulatory standards and the tax authority’s signature policy.
The expansion rollout is phased to give companies sufficient time to adapt to the new requirements and to provide technical support during the transition period.
E-Invoicing Colombia - new updates timeline
March 29, 2023: The issuance of Decree 442 introduced updated regulations for electronic invoicing. Key changes included:
- E-commerce platforms must provide users with the ability to issue and deliver electronic invoices to end consumers.
- The expansion of the electronic invoicing system to cover all electronic tax-related documents.
- A new definition for the electronic equivalent document.
- Updates to the electronic supporting document for transactions involving taxpayers who are not required to issue invoices.
November 2023: Publication of Resolution 165/2023 by DIAN, which updated the technical specifications for sales e-invoices to version 1.9 and introduced version 1.0 for the technical specifications for the electronic equivalent document.
February 1, 2024: All taxpayers required to issue electronic invoices must update their systems to comply with the updated technical specifications version 1.9.
February 3, 2024: Large taxpayers must issue electronic POS receipts.
March 1, 2024: All other taxpayers required to file income tax returns and who are not large taxpayers must issue electronic POS receipts.
April 1, 2024: Taxpayers who are not required to file income tax returns and all other taxpayers not included in the previous groups must issue electronic POS receipts.
May 1, 2024 – August 1, 2024: Gradual implementation of all other electronic equivalent documents.
Who needs to comply with the Colombia E-Invoicing obligation?
The e-invoicing requirement applies to all companies that are required to pay taxes in Colombia, including small businesses and self-employed professionals. This includes the following groups of taxpayers:
- Large taxpayers
- Self-employed taxpayers who withhold their own taxes
- Companies that withhold VAT
- Companies under a simplified tax regime
- Other taxpayers not covered by the above groups
Certain sectors, such as healthcare, have special rules for implementing e-invoicing due to their specific needs. Additionally, some businesses, such as foreign companies without a presence in Colombia or certain exempt sectors, may qualify for exceptions depending on the legislation.
What are the exceptions to the E-Invoicing requirement?
Companies generally discharged from the e-invoicing obligation in Colombia, depending on legislation and specific exemptions, include:
- Foreign companies without a presence in Colombia that do not conduct commercial activities in the country.
- Certain sectors that fall under exemptions, such as:
- Agricultural businesses that meet specific tax benefits or exemptions.
- Companies engaged in exporting certain goods or services, depending on tax legislation.
- Self-employed professionals who have no VAT or other tax obligations, depending on their income and tax status.
- Non-profit organizations, such as foundations and NGOs, that qualify for tax exemptions.
The specific rules and exceptions depend on legislative updates from DIAN, so it is important to always refer to the latest regulations to verify whether a company is required to implement e-invoicing.
Why E-Invoicing? Three benefits for your business
- Efficiency and Transparency: All invoices are easily traceable throughout the entire process.
- Cost Savings: Reduction in paper usage and storage costs.
- Compliance and Risk Management: Minimization of human errors and adherence to legal regulations.
Since many other countries are currently also defining their own e-invoicing rules, we recommend defining your own clear and future-proof E-Invoicing Strategy.
Penalties for non-compliance in Colombia
Penalties for failing to comply with Colombia’s e-invoicing requirements can reach up to 15,000 UVT (Unidad de Valor Tributario, tax value unit), based on the following criteria:
- 5% of the invoice amount for failing to provide the required information.
- 4% of the invoice amount for submitting information in the wrong format.
- 3% of the invoice amount for late submission.
With the tax value unit (UVT) for 2025 set at COP 49,799 per UVT, penalties can reach up to COP 2,704,950,000, approximately EUR 594,000.
Technical & process-related challenges with B2B E-Invoicing
In your own Colombian compliance project, you will encounter technical and process-related challenges that need to be addressed by your SAP system:
- Your ERP system must be able to generate the required XML file from an SAP SD or SAP FI invoice document, digitally sign it, and submit it for approval to DIAN’s portal.
- Once DIAN approves the XML file, you must provide the e-invoice to your customer.
- Customers must provide feedback (approval/rejection), and according to Colombian regulations, you are required to store these responses.
- Physical delivery of goods to customers is only permitted after DIAN has received and approved the e-invoice.
Without a compliant SAP solution, you risk non-compliance, which could result in penalties and prevent you from delivering your goods.
Implementation of E-Invoicing in SAP
For businesses using SAP, e-invoicing implementation can be carried out through SAP Document Compliance. The implementation steps in SAP include:
- Configuration of SAP Document Compliance: Ensure relevant modules and interfaces are properly set up.
- Integration with DIAN Web Services (RADIAN): Establish a secure connection between SAP and DIAN for real-time invoice validation.
- Use of XML UBL 2.1 Format: Adjust invoice structure to comply with DIAN’s XML UBL 2.1 requirements.
- Invoice Generation and Submission: SAP generates an electronic invoice and automatically submits it to DIAN for validation.
- Validation Status Reception: DIAN returns an approval or rejection, which SAP processes before sending the invoice to the customer.
- Storage and Reporting: Validated invoices are stored for audit purposes and reporting to DIAN. The related documents must be retained for a period of five years for tax purposes.
Inbound E-Invoicing process in Colombia
In addition to sending invoices, businesses in Colombia must also process and approve incoming electronic invoices. SAP Document Compliance also supports inbound e-invoicing:
- Suppliers send e-invoices via email or another channel.
- The invoice is uploaded into SAP, creating an eDocument in the SAP eDocument Cockpit.
- The XML data is checked and validated.
- The invoice is accepted or rejected.
- An automatic confirmation is sent to the supplier.
How PIKON can help you with your compliance project in Colombia
With our Competence Center for Legal Requirements, we are a strategic partner who ensures that your SAP system and business processes meet different country-specific legal requirements all over the world on the long run. We have a team of experts that combine SAP expertise and in-depth knowledge of the end-to-end legal process and technical requirements of the Colombian and many other E-Invoicing regulations. We have gathered this experience through our many SAP Document Compliance and local implementation projects all around the world, for example SDI in Italy, SII in Spain, CFDI and Complemento de Pago in Mexico, RTIR and EKAER in Hungary, XRechnung in Germany, the different legal requirements in Turkey, etc. We have also developed own compliance SAP Add-Ons for e.g. MTD VAT in the UK and the VAT Whitelist in Poland. Furthermore, we always keep an eye on new and changing legal requirements and inform our customers when action is needed. This ensures that your company doesn’t need to follow-up on all the legal requirements yourselves and you can concentrate on your daily business.
If you have any questions about Colombian E-Invoicing or about how we can help you achieve compliance in your SAP system, please ask me your questions in the Comments section below or feel free to request a web-meeting by clicking on the button earlier in this blog post. I am happy to help you.
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If you have any questions, or if you would like to discuss how PIKON can help you with your business case, do not hesitate to leave a comment below or to request a web-meeting. I am happy to help you!
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2 thoughts on “Mandatory E-Invoicing in Colombia with SAP Document Compliance”
Hi Evelien,
Can you confirm if the type of tax payer (Type of Taxpayer – O-13 Gran contribuyente, O-15 Autorretenedor, O-23 Agente de retención IVA, O-47 Régimen simple de tributación, R-99-PN No aplica – otros) needs to be send mandatorily in the XML to DIAN? Also is the detail that if BP is importer or exporter needs to be sent? If yes, how is this mapped in SAP DRC? In AIF mapping?
Hi Ritika,
Yes they are mandatory to send XML to DIAN.
For the mapping in SAP DRC:
AIF Mapping:
The BP master data should contain the classification (importer/exporter).
This classification can be mapped in AIF transformations to populate the corresponding fields in the XML UBL 2.1 file.
Custom Fields in SAP Master Data:
Ensure the BP has relevant attributes (e.g., role, tax classification).
Extend the standard SAP structures if needed to capture importer/exporter details.
eDocument Mapping:
Use SAP BAdIs (Business Add-Ins) in DRC to customize XML mappings.
Modify the eDocument structure to include the necessary attributes before submission to DIAN.