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November 7, 2022

El Salvador | Tax Code reforms to implement electronic invoicing are approved

  • The Salvadoran Legislative Assembly has approved a Legislative Decree amending the Tax Code. The Decree enables electronic invoicing in El Salvador and the issuance of “Electronic Tax Documents.”
  • This Alert summarizes the key measures introduced by the Decree and the guidance, issued in October 2022, to implement the measures.
  • The issuance of the corresponding Incorporation Plan is still pending, which will detail the mandatory incorporation dates for taxpayers.

On 30 August 2022, the Salvadoran Legislative Assembly approved a Legislative Decree amending the Tax Code (the Decree). This legal reform initiative was promoted by the Ministry of Finance.

The Decree enables electronic invoicing in El Salvador and the issuance of “Electronic Tax Documents” (ETDs), i.e., the different types of legal documents that could be electronically issued by Salvadoran taxpayers. For this, the Decree introduced new articles and provisions to the Tax Code and reformed existing ones.

Among the provisions introduced by the Decree, key measures include:

  • New provisions in the Tax Code through which the ETDs are regulated, defining these as documents generated, signed, transmitted, and stamped electronically by the Tax Administration through the system created for this purpose.
  • The formal requirements that the different types of ETDs must meet, enlisting the following as ETDs: Electronic Value Added Tax (VAT) Invoice, Electronic Commercial Invoice, Electronic Export Invoice, Electronic Remittance Note, Electronic Credit and Debit Notes, Electronic Settlement Receipts, Electronic Withholding Receipt, Electronic Settlement Accounting Document, Electronic Excluded Subject Invoice and Electronic Donation Receipt.
  • Furthermore, the following powers are granted to the Tax Administration:
    • Establish the dates from which taxpayers will be required to issue ETDs. In addition, the Tax Administration must indicate the physical or printed documents and electronic or computerized systems that will no longer be used.
    • Set the rules, form, terms, and conditions, for taxpayers to comply with the obligation to issue documents.
    • Provide the instructions and technological specifications for the generation and delivery of ETDs to the corresponding recipients.
    • Establish the data structure and electronic format of the ETDs, as well as the terms and conditions for their transmission.
    • Issue regulations that guarantee adequate compliance with the obligations related to the ETDs. Taxpayers will strictly comply with said regulations, and sanctioning powers may be exercised by the Tax Administration.
  • In addition, the Decree included specific sanctions for the non-compliance of the obligations related to electronic invoicing and the issuing of ETDs, including: omitting the issuance or delivery of ETDs, issuing documents that do not comply with established formal requirements, transmitting ETDs to the Tax Administration’s system without meeting the requirements or the necessary data structure, omitting the delivery of the graphic representation of the ETD, failing to comply with specific regulations issued by the Tax Administration, etc.
  • ETDs may be annulled when, after their issuance, errors are found in their content that do not affect the corresponding transaction. The deadlines for transmitting the annulment event must be defined by the Tax Administration.
  • The ETDs must be kept by the taxpayers for a period of 10 years from the date of their issuance, in the same way the graphic representations of the ETDs must be kept in the same format in which they were issued.
  • For deductibility purposes, expenses documented in ETDs will be admitted as long as these documents comply with the formal requirements established in the Tax Code and have the transmission stamp of the Tax Administration.
  • The ETDs received by the Tax Administration will prevail over those kept by the taxpayers and these over the issued graphic representations.
  • Among the control powers granted to the Tax Administration are those related to the request and access to computer systems and the review of ETDs data.
  • Taxpayers must report the physical documents made by certified printing companies through the forms and means established by the Tax Administration, for their corresponding annulment and destruction, within a period of 15 business days from the date in which they are mandated to begin with the issuance of ETDs.
  • Taxpayers who on the date of entry of the Decree have VAT control documents may use these while they last, or until the Tax Administration provides via resolution that it is mandatory to issue ETDs.
  • The Tax Administration may provide taxpayers a free technological solution to facilitate the issuance of ETDs and their graphic representations.

The Decree was sanctioned by the Executive Branch and published in the Official Gazette N° 174 dated 20 September 2022. The Official Gazette was available to the public on 4 October due to a delay in its effective publication; therefore, the date of entry into force was on 14 October (8 business days after its publication as provided by the Decree).

On 27 October 2022, the Tax Administration issued the following specific guidelines and regulations, relating to the implementation of electronic invoicing:

  • Orientation Guide for the Authorization Process to be an Issuer of ETDs:
    • This Guide provides a general overview of the process that taxpayers should follow to be able to issue ETDs and should be applied by those who voluntarily want to issue ETDs as well as by those required to do so in accordance with the Incorporation Plan to be issued by the Tax Administration.
    • Among its content, the Guide includes a list of items to be considered by taxpayers as a “self-assessment,” prior to the development or adoption of electronic invoicing, such as the types of documents that the taxpayer uses, their volume, the monthly sales volume, the specific characteristics of its economic activity, its current process to issue documents, the feasibility of developing its own electronic invoicing system or adopting a pre-existing one, and general considerations regarding the planning required in the implementation process. It includes a description of both systems involved in the ETD process: (i) the transmission system, in which the taxpayer adapts its own system to the administrative and technological requirements set by the Tax Administration, and “integrates” it with the Administration’s transmission system; and (ii) the invoicing system, which is a free online technological solution provided by the Tax Administration for taxpayers with a smaller volume of operations: less than US$10,000 per month, less than 100 documents per month, and classified as “other taxpayers” by the Administration.
    • The Guide also includes the steps to become an ETD issuer: Step 1: Complete the minimum requirements to enter the platform that adjusts to the operation of the business; Step 2: Send the request to enter the Testing Environment; Step 3: Obtain an Electronic Signature Certificate for the Transmission System the API access credential; Step 4: Execute the minimum required tests; Step 5: Request for Authorization to be an ETD issuer (applicable for voluntary incorporation); Step 6: Resolution of authorization to issue ETDs (applicable for voluntary incorporation) and Step 7: Start of operations by issuing the authorized types of ETDs.
  • Guidelines for Registering ETDs in the VAT Books: this document provides a description of the process to be followed to register ETDs in taxpayers’ VAT Books: Book of operations with VAT taxpayers, Book of operations with consumers, Purchases Registry.
  • Manual for the use of the Electronic Invoicing Administrative Dashboard: The Dashboard allows taxpayers to carry out several actions and use online services provided by the Tax Administration, such as to check the status of issued and received ETDs, request the authorization to become a ETD issuer, generate VAT books with the information of the issued and received ETDs, etc. This manual provides practical guidance for the use of the Dashboard.
  • Manual for Accreditation and Obtention of the Electronic Signature Certificate: this document details information regarding the accreditation process that all taxpayers must carry out before issuing ETDs -either in accordance with the Electronic Invoicing Incorporation Plan or by voluntary adherence, regardless of the used System (Transmission System or Invoicing System) where the electronic signature certificate will be made available to taxpayers along with the corresponding keys and options to interact with the entire ecosystem of ETDs.
  • Templates for requesting the authorization for the issuance of ETDs and for the Incorporation into the Electronic Invoicing Program.
  • Orientation Guideline for ETDs’ public consultation: This document contains the instructions for taxpayers to check and verify the status of the ETDs.
  • Other templates

Additionally, the Tax Administration enabled the website that contains general information regarding the Electronic Invoicing process, ETDs, applicable laws and regulations and a Q&A section for the public.

The issuance of the corresponding Incorporation Plan is still pending, which will detail the mandatory incorporation dates for taxpayers.


For additional information with respect to this Alert, please contact the following:

Ernst & Young El Salvador

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


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