How does E-Invoicing work in Colombia?

E-Invoicing, or electronic invoicing, is a digital system used to generate, send, and receive invoices. In Colombia, e-invoicing is mandatory for most businesses, and the process is regulated by the National Directorate of Taxes and Customs (DIAN).

Here is a general overview of how e-invoicing works in Colombia:

1. Register with DIAN: Businesses must register with DIAN and obtain an Electronic Tax Invoice Authorization (AUTORIZACIÓN DE FACTURACIÓN ELECTRÓNICA or AFE) before they can start using e-invoicing.
2. Generate the invoice: Once registered, businesses can generate invoices electronically using an approved software or third-party provider. The invoice must contain all required information, including the tax identification numbers of the buyer and seller, a description of the goods or services sold, the date of the transaction, and the invoice number.
3. Send the invoice: The invoice must be sent to the buyer within 24 hours of the transaction, either by email or through a government-approved electronic invoicing platform.
4. Verify the invoice: The buyer must verify the invoice and confirm receipt by either accepting or rejecting it within three business days.
5. Report to DIAN: Both the buyer and seller must report the transaction to DIAN within two business days of the invoice being accepted.

In summary, e-invoicing in Colombia is a highly regulated process that requires businesses to use approved software or providers to generate, send, and receive invoices. Failure to comply with e-invoicing requirements can result in penalties and fines from the government.