What is e-Accounting?

E-Accounting involves sending information by digital means of all transactions carried out by a company or individual to the tax authority.

In Mexico, it means the sending of files in XML format through the Tax Mailbox to comply with an obligation that all companies have, this with the purpose of making an easier audit, making it simpler and paperless.

Therefore, we will now tell you which are the files that make up the electronic accounting in our country, according to information from the Tax Administration Service (SAT).

1. Accounts catalog
‍One time only and each time it is modified.

2. Balance sheet
‍Each month, in the second month following the month corresponding to the data.

3. Information on policies and auxiliaries
‍Only when SAT requires to audit accounting information or to verify the origin of refunds and offsets.

Thanks to this, you will be able to have a better control of your business because day by day you will have a clear and concise record of all your income and expenses.

Who is required to file it?

Under the Income Tax Law, the Federal Tax Code (CFF) and the Miscellaneous Tax Resolution (RMF), the taxpayers required to keep and file e-Accounting are:

Legal entities and individuals with an income greater than or equal to 4 million pesos in the fiscal year will have to submit their e-Accounting through the Buzón Tributario (Tax Mailbox). 

Individuals with business activity that do not exceed 2 million pesos will have to submit their accounting through the SAT portal in "Mis Cuentas" (My Accounts). In case they are within the range of 2 to 4 million pesos, they will have to report their accounting through the SAT portal "Mi Contabilidad" (My Accounting).

Non-profit entities, with the exception of charitable organizations not exceeding 2 million pesos in income, as well as religious associations that use the "My Accounts" page, will also have to report their accounting through the SAT "My Accounts" portal.

Individuals engaged in primary activities (agriculture, livestock, forestry or fishing) whose exception is in the case that their income does not exceed 16 times the value of the annual UMA (for 2020 is $507,100.8 pesos) that the income from their primary activity constitutes at least 25% of their total income and they issue their digital tax receipts via Internet (CFDI) through an authorized supplier..

Who is not obliged to file it?

Legal entities:

Federation, federal entities, municipalities, trade unions, and public parastatal administration entities are not required to keep electronic accounting records, except when they perform business activities. 

Corporations, non-profit organizations and trusts authorized to receive tax deductible donations (authorized charitable organizations) that have received income in an amount equal to or less than two million pesos and religious associations provided that they register their operations in "My accounts".

Individuals:

• Salaried individuals
• Leasing Regime Taxpayers, Professional Services with income not exceeding two million pesos (fees) and Tax Incorporation, provided that they register their operations in My Accounts.
• Individuals earning interest income or sporadic income such as awards and property alienation.

When to start generating and reporting 

Reporting intervals for submitting the electronic accounting files (Chart of Accounts and Trial Balance) depend on the taxpayer.

Regarding the auxiliary policies, they will be submitted only when the SAT needs to verify accounting information or the origin of refunds and offsets.

How is e-Accounting done?

Similarly to the way you do your accounting, however, the biggest changes are the SAT grouping code, since you will have to align your Accounts Catalog with the keys established by the authority so that it can read your information.

"SAT grouping code aims for the information to be presented in a uniform manner, for which it is necessary for taxpayers to associate the accounts in their accounts catalog to the grouping code by nature and predominance of the account." According to Annex 24 of the Annual Temporary Tax Regulations, where any change to this code is published every year.

When you align your account catalog with the SAT grouping code, your information submission will be validated. Please remember that everything must be in XML format and compressed in a ZIP file in order for the Tax Mailbox to process it.

XML files

A communication scheme based on XML documents was defined in order to achieve the exchange of electronic information between the SAT and a third party. The relevance of using XML documents is that it facilitates interoperability between the third party and the SAT. 

The name XML document comes from the English expression eXtensible Markup Language, it is a standard language defined under the guidelines of the World Wide Web Consortium: W3. 

W3 Consortium reference described in this document is purely technological, and all the guidelines described therein are a programming language that cannot be translated to the form and syntax of another language such as Spanish. This programming language is for the exclusive use of the computer systems and not for the taxpayer or end user.

Additionally to the structure rules set forth in this standard, those who build XML files may follow the technical guidelines of form and syntax specified in the basic guide of XML file characteristics, located at www.sat.gob.mx, select the option individuals or companies, in the submenu other procedures and services, go to Ver más (See more), Contabilidad electrónica (electronic accounting) category, section Envía tu contabilidad electrónica (Send your e-Accounting) and Buscar (Search) in the related contents.

Tax Mailbox

Buzón Tributario ("Tax Mailbox") is the communication space between the SAT and the taxpayers, where they can send information, receive requirements, solve doubts and any important information between the authority and the taxpayer. Here you should send your information on Electronic Accounting.

The SAT states: "(...) It can be used by any individual or legal entity needing to carry out procedures and wishing to do so easily from the comfort of their home or office" and to access it, an e-signature is required. 

But the mailbox is not only for the Tax Administration Service, as information and resolutions from the Taxpayer's Defense Office (Prodecon) can also be received.

What information to send
‍In order to fulfill this obligation, you must first enter your Tax Mailbox and find the menu dedicated to this, and to do so, you must send your files as follows:

Accounts Catalog.
Must be in accordance with the SAT Grouping Code and is only sent in the XML file compressed in ZIP. The catalog is sent only the first time and each time an account is added or deleted.

Balance Sheet.
Likewise, it must be in XML format and compressed in ZIP. The information is sent on a monthly basis, in the second month following the month corresponding to the information.

Policies and auxiliary records.
Are only sent when SAT needs to confirm accounting information, the origin of refunds and offsets.

These files must be named as follows:

• Taxpayer ID number ("RFC"): made up of 12 or 13 characters, indicating the taxpayer's RFC, whether the taxpayer is a legal entity or an individual.
• Fiscal year: made up of 4 characters that identify the year to which the information being sent corresponds.
• Period: consisting of 2 characters that identify the number of the month to which the information being sent corresponds.
• Key: CT that identifies the chart of accounts, BN that identifies the trial balances with normal information. | BC which identify the balance sheets with complementary information. | PL which identify the policies of the period. | XC that identify the auxiliary account or sub-account. | XF that identify the folios auxiliary.
• File extension: zip characters that identify that a file is compressed.

The following is an example of the nomenclature for the Accounts Catalog file for the month of January 2020:

ABC123456AB7202001CT.ZIP

• Where ABC123456AB7 is the RFC
• 2020 is the year being sent, 01 is the corresponding period.
• The CT that identifies the account catalog and the .ZIP for the format in which they are compressed.

Steps for use

• Choose Información Contable (Accounting Information) that is optional. The system gives the option to stamp the information to be sent.
• Select the information to be submitted. Then select one of the following reasons for sending the information: Envío Mensual (Monthly Sending)Acto de Fiscalización (Auditing Act), Fiscalización Compulsa (Auditing Certification), Devolución (Refund) and Compensación (Compensation). 
• Send and confirm. You will have to confirm the sending and when selecting "de acuerdo" (in agreement) the transfer of the accounting information to the SAT will be done.

Before sending, it is important that you have the XML file(s) compressed in .ZIP format with the established nomenclature.

Upon sending, the Electronic Accounting system in the Tax Mailbox will issue acknowledgements of receipt, acceptance or rejection of files, which will contain the file data: folio, date and time, taxpayer's RFC, period, file name, file type, type of file, type of sending, reason and status.

You should remember that in order to carry out this process, it is necessary to have a template provided by the SAT or hire an Electronic Accounting system that will help you to make a more appropriate registration of all your information.

E-Accounting syntax and form validator

Prior to sending your electronic accounting, validate its structure and syntax to discover inconsistencies and correct them. To do this, the SAT has a form and syntax validator available for online use and does not require authentication to enter.

Its purpose is to verify the content of your electronic accounting .xml files, in their form and syntax for their submission. Individuals and legal entities that need to validate the form and syntax of their accounting information can run it. You need the .xml file of your accounting information before running the test.

Steps for use

1. Click on "Ejecutar en línea" (Run online).
2. Select the option "cargar tu archivo .xml" (Upload your .xml file).
3. Verify the result

Validation of your accounting information can result in it being valid or invalid.

Therefore, based on the information we share with you, you will now know if your company is required to comply with e-Accounting.