During 2014, Law No. 20,727, stipulated the mandatory use of the electronic invoices for Chilean companies, along with other electronic tax documents such as invoice settlements, debit and credit notes and purchase invoices. The new law would start gradually for larger companies and by January 2018 for all Chilean companies no matter the size.

The benefits of this new regulation are the following:

  • It avoids the falsification of invoices and therefore, the fraudulent use of VAT credit.
  • Saves time and money for taxpayers.
  • Eliminates the risk of losing documents.
  • It provides a digital storage of tax documents (DTE's) in the IRS electronic files.
  • It allows the assignment of invoices through a simple manner and online (Factoring).
  • Improves the speed and consistency of the billing process.
  • Improves trustworthiness and transparency of companies.
  • It allows companies to defer the payment of VAT made through internet from the 12th to the 20th of each month.
  • It avoids the obligation to physically stamp invoices and all other tax documents in the offices of the SII (as now there are no physical paper copies).

Recently, there has been another important change related to the possibility of using the invoice as an undisputable evidence that a service or sale has been provided, and therefore, that a debt is owed to the provider.

Indeed, the invoice can be used and an "executive title" that reveals a debt which grants the right of execution. This means it has the same legal value as a cheque, a promissory note signed before notary, or a sentence issued by a judge. However, to have this effect, once the invoice is issued, the receiver or payer must not have rejected the invoice.

The law previously ruled that the payer had 8 days to reject the invoice or 30 days as a cap if by agreement the parties gave themselves more time. Now, from this year on, the time has been reduced in all cases to only 8 days.

The Problem:

This can be problematic because almost all companies have electronic invoices and a payer is only a click away from either accepting or denying an invoice which can lead to significant consequences for the company if not done properly.

For example, a large company who receives invoices from various providers. How can an accounting department in this type of company know if the service has been provided? It is easy to imagine a junior accountant accepting all the incoming invoices assuming they are correct only to find out later that a service was not provided.

In this regard, companies must be very aware of the short 8-day deadline and understand the legal reasons as to why it can legally accept or reject an invoice.

Legal Considerations:

From a legal perspective, the invoice shall be irreversibly accepted if it is not rejected because of the invoices contents (there is a mistake) or the goods or services were not delivered or only partially delivered.

Rejecting an invoice should be done by the following procedures:

  1. Returning the invoice and the related documentation, if applicable, at the time of the invoices delivery, or
  2. Claiming against the invoices content (there is a mistake) or the goods or services were not delivered or only partially delivered. This should be done within eight calendar days following the receipt of the invoice. In this case, the claim must be brought to the attention of the issuer of the invoice by certified mail, or by any other reliable means. This needs to be done in conjunction with returning the invoice and the applicable documents, or together with the request for issuing the corresponding credit note through the online system.

The Chilean IRS has added that the date in which this 8 days starts is once the tax office has received a copy (Circular No 4 from January 11, 2017) of the invoice. This should all be done automatically, online, so at least in theory, the IRS should immediately receive an electronic invoice copy.


The big change is that once the 8 days have gone by and there is no rejection from the payer, the seller may cede the invoice to a third party to collect the payment (factoring) without the need of waiting for the "acknowledgment of receipt" within the 30-day period as before.

This means that now, more than ever, companies must have a good understanding of the importance of accepting an invoice or rejectingit within the 8-day period and the reasons as to why they may do so. For this matter, companies need to have a clear idea during this short period on whether the goods or services were duly delivered and therefore have a quick turnover either accepting or rejecting the invoice. Not doing so will automatically mean they have accepted the work done or the goods provided.

It is normal for foreign companies with limited staff to have their business development or sales manager, secretary, or external accountant receive the online copies of the invoices. It is not uncommon for a business development manager to be travelling and/or too busy to properly respond. It would not be unheard of for a secretary to mistakenly accept an invoice without knowing if the service has been provided in full or not.

In practical terms, we strongly suggest reviewing who within the company receives notifications through the online system. Our second suggestion is to review with the chosen person so that they understand the importance and how the system works. Our last suggestion is to put some type of procedure in place so that invoices can be reviewed quickly and approved or rejected depending on the circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.