Recently, the Secretary of Finance together with the SAT has started to send out audit requests to companies which do not pay their taxes on the 17th of each month. Even if the tax law allows for additional days depending on the tax ID, we strongly recommend realizing the tax payment at latest on the 17th from now on to avoid a tax review. WMP will send out the tax calculation at latest on the 15th of each month to assure the deadline can be met.
IMSS: Audit Invitation
Due to the financial burden the pandemic has put on Mexico’s social security system, the IMSS has recently started to send out electronic invitations per email similar to the SAT to assure the correct payments of the social security contributions. The IMSS determines differences based on the information available to them electronically without taking into consideration all details. Please get in contact with your accountant immediately should you receive such an invitation.
VAT Law: Stricter application of criteria
As part of the tax reform 2020, the mexican government had announced that their focus will be on a better tax collection. As a consequence, stricter critieria are applied in tax revisions and tax returns.
VAT on prepayments
The VAT on prepayments to suppliers have to be credited in the month in which the payment was realised. It is crucial to request the invoice in the same month to fullfill all requierements to credit the VAT. It is recommended to review the cut off dates and the process for travel expense payments and reports as well as supplier payments and most importantly prepayments to customs agents. If invoices are not available at the end of the month, the VAT will be considered a non deductible expense or complementary tax declarations have to be realized.
Invoicing of services to related foreign companies at 0% VAT tax rate
In recent tax return requests and reviews more detailed information of the operation were requested if a company invoices services to related companies abroad.It is recommendable to have supporting documents at hand to proof that the requirements to invoice at a 0% tax rate are met.