IVA Increase and Facturas (invoice)

There is a new amendment to the Value Added Tax Law (VAT or IVA), starting January 1st 2010 which allows for a rate increase from 15% to 16% (general) and from 10% to 11% (for border regions, including Cancun, Playa del Carmen, Tulum, etc.). Businesses that issue facturas or pay facturas will find themselves negotiating the change in various ways. Here are some tips for managing that change.

1. Taxpayers with facturas issued before December 01, 2010 and collected before January 10, 2010 may apply the rates prevailing on 31 December 2009.
2. Taxpayers who collect after January 10, 2010 should apply the existing rate in 2010 and may issue invoices in one of the two following ways:

• When the parties have agreed on a price excluding IVA, a new factura (invoice) should be issued for each item collected in 2010, with an additional factura (invoice) issued for the additional IVA. The additional factura should include in writing the legend: “este comprobante es complementario del expedido con folio(insert original factura number here) de fecha (insert original factura date here).”
• When the parties have agreed on a total price including IVA, a new factura can be issued as a credit note to lower the price without IVA, or a new factura can be issued for each transaction with the new rates in effect for 2010 (and the old factura cancelled).

As always, if you have additional questions, contact the YES team by phone or email for detailed consultation.