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Mexican Authorities Hinder Taxpayers' Invoicing Systems Through Compliance Assurance Programs

Author:Mr Oscar A. Lopez Velarde, Santiago Llano Zapatero and Juan José Paullada Eguirao
Profession:Ritch, Mueller, Heather y Nicolau, S.C.
 
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Due to important changes in the incoming government's tax policy, tax authorities have heavily enforced programs to increase tax revenue in recent months. In particular, the Tax Administration Service ("SAT") has put particular efforts in implementing tax compliance assurance programs, which has brought serious complications in taxpayers' day to day operations, as explained below.

Since the digital invoicing era, it is far easier for tax authorities to unveil asymmetries between income/deductions declared in tax returns and income/deductions actually supported by digital invoices; if a difference exists, authorities consider that it is likely that the flagged taxpayer has failed to properly pay the corresponding taxes. This program relies on SAT's engagement with taxpayers to create awareness about voluntary corrections, and is achieved by issuing "invitation letters" in which authorities simply inform taxpayers that they have identified certain tax inconsistencies (usually with no further details), luring them into an appointment to discuss the alleged differences within 15 to 30 days after the letter is duly served (although we have seen cases in which the appointment is scheduled for a day after the letter is served).

Attending to these meetings is not something that should be passed over lightly, considering that if the taxpayer doesn't...

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