The Digital Tax Receipt over the Internet (CFDI) is one of the key pieces of the Mexican tax system. Knowing what it is, how it works, and what its characteristics are is essential for any business owner, entrepreneur, or independent worker who needs to comply with their tax obligations correctly. In this article, we will explore everything you need to know about the CFDI.

Contents:

• What is a CFDI?

• What is a CFDI Used For?

• Types of CFDI

• Key Elements of a CFDI

• How the Issuance of a CFDI Works?

• Benefits of Using the CFDI

• Conclusion

What is a CFDI?

A CFDI (Digital Tax Receipt over the Internet) is an electronic invoice that is issued and validated electronically through a system authorized by the Tax Administration Service (SAT) in Mexico. CFDIs replace traditional paper invoices and have the same legal validity, but with the advantage of being much more efficient and easier to manage.

The CFDI is used to document the sale of goods or services and must comply with specific requirements established by Mexican tax law. Each CFDI has a digital seal that guarantees its authenticity and the security of the information contained.

What is a CFDI Used For?

The CFDI serves several important purposes for both the issuer and the receiver:

1. Legal Proof of Transaction: The CFDI acts as legal proof of a transaction carried out between the issuer and the receiver.

2. Tax Compliance: It is a requirement of the SAT for fulfilling tax obligations. Without a CFDI, it is not possible to deduct certain expenses or justify income legally.

3. Facilitation of Accounting: The CFDI allows for better accounting organization and facilitates the integration of financial information into accounting systems.

4. Efficiency in Management: Being digital, it allows both businesses and individuals to manage their invoices more easily and keep their tax documents organized.

Types of CFDI

There are several types of CFDI, depending on the nature of the transaction. Some of the most common ones are:

• CFDI of Income: Used to register the sale of goods or the provision of services.

• CFDI of Expenses: Issued when there are returns, discounts, or bonuses.

• CFDI of Payroll: Used to document payments made by a company to its employees.

• CFDI of Transfer: Used for the transfer of merchandise and to cover ownership during transportation.

Key Elements of a CFDI

A CFDI contains several important elements that guarantee its validity and compliance with tax laws:

1. Data of the Issuer and Receiver: Includes the RFC of the issuer and the receiver, as well as their name and tax address.

2. Digital Seal: The CFDI has a digital seal that guarantees its authenticity and that the document has not been altered.

3. UUID (Fiscal Folio): It is the unique identifier for each CFDI, generated by the SAT.

4. Product or Service Key: The corresponding key for the goods or services being invoiced must be specified, according to the SAT catalog.

5. Description and Price: Details the goods or services sold, the unit price, and the total amount, as well as the breakdown of taxes such as VAT.

How the Issuance of a CFDI Works?

To issue a CFDI, it is necessary to comply with certain steps and requirements:

1. Have the RFC and a Digital Seal Certificate (CSD): The RFC (Federal Taxpayer Registry) allows you to be identified before the SAT, and the CSD is used to electronically sign each CFDI.

2. Use of a PAC (Authorized Certification Provider): The CFDI must be validated by an Authorized Certification Provider before being issued to the client. These PACs are responsible for certifying that the invoice complies with all legal and tax requirements.

3. Generation through an Authorized System: You can generate CFDIs using platforms authorized by the SAT, such as Cretia, which facilitates the process for any entrepreneur or small business to issue invoices quickly and easily.

4. SAT Validation: Once the CFDI is issued, the SAT validates the document and stores it in its records, ensuring it meets all regulations.

Benefits of Using the CFDI

The use of the CFDI has several significant benefits for businesses:

• Guaranteed Legal Compliance: Ensures that you are complying with all tax provisions required by the SAT.

• Reduction of Administrative Costs: Being digital, it eliminates the costs of physical storage and facilitates the search and consultation of documents.

• Greater Security and Transparency: The digital seal and the UUID guarantee the authenticity of each document, preventing fraud and errors in the information.

• Agility and Efficiency: Allows you to send invoices electronically to clients in seconds, optimizing customer relationships and improving business management.

Conclusion

The CFDI is an essential tool in the tax field of Mexico that has allowed for greater transparency and efficiency in the relationship between taxpayers and the tax authority. Understanding how it works, what it is used for, and how to correctly issue a CFDI is fundamental for any entrepreneur, independent worker, or small business that wants to meet its tax obligations effectively.

If you are looking for an easy and quick way to issue CFDIs, Cretia offers you an intuitive platform that complies with all tax regulations and makes the process much simpler. Start invoicing electronically and optimize your business management with Cretia.