Hacker News Reader

Comment by xtracto | Hacker News Reader

Adding a data point with Mexico:

All invoices are digital. Every person who gets a TaxId also gets a Private/Public keypair and generating invoices means signing the document with that key. The amazing thing is that now accountants talk about the XML, which is the legal representation of the invoice.

As a result, every year if you file your taxes, you go I to the government freely provided website , get into your account and most of the data is there for the exercise, including deducted money that you can get back.

If you are a standard worker earning less than certain amount (very sensible, so the vast majority of workers fall in there) you don't even have to file your taxes.

That's one thing that is good about this country.

View on HN

>also gets a Private/Public keypair

Tangential curiosity: how is this part done? Do you download the keys from a government website? How do they handle key reissues if a private key is compromised?

You can download a java app which generates the key pair taking mouse movement as entropy and then you to go to a SAT(IRS equivalent) office with the key in a USB drive, they take your biometrics and save the public key to your profile. However, as most people only bring the USB drive, they usually create the key pair in the in the office. If your key is compromised or lost, you have to go to the office and they change it in very much the same way.

It's a somewhat tedious process, but if you keep the key safe, which they very much advice, most of the procedures, including tax fillings, are pretty easy and fast.

What you have just said has thrown me into a tizz trying to understand what you have said. Could you please give a bit more practical details. Say I want to claim rent/transport/medical expenses. Will doctors, car rental place and landlords all issue me an electronic receipt?

Not from Mexico, so it might be different for them, but one way how this works in some places is that the tax office gets all the electronic receipts from all the cash register/POS systems anyway, since that's how they monitor sales/vat/excise/etc taxes paid by the merchant and reduce the risks of "under the counter" sales where fake receipts are issued but taxes not paid on the sale.

So if the doctor's office punches in my legal ID number with the receipt (or if the ID gets added automatically from the billing system that a large hospital would have), then when the office sends all their receipt files to the tax office, the tax office will automatically add that electronic receipt to my tax deduction.

Yes. Not all spending can be deducted. But for the ones you do, you have the right to ask for the "electronic invoice" and the business has to give it to you.

When that happens they ask you for your TAX ID and then the business generates the invoice and your taxid and their taxid makes the tie. The Mexican IRS systems see all of this. So at the tax reporting moment, the system will have all that info.

It is pretty neat actually. However I think it is possible bc in Mexico people are not that concerned with privacy and all that.

Reply on news.ycombinator.com