Mexico Tax Compliance map

Mexico Law Compliance Map – Corporate Tax Related
GLA – Mexico Corporate Income Tax

GLA-MX-01 GLA Tax Entity

Question from client:
Is Mexico corporate income tax a national income tax? A local income tax? Or is there a national and local income tax?
What if the national income tax and the local income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Evershine RD:
Mexico has 3 levels of taxation: federal, state, and municipal.
Mexico has 31 states and the Federal District (i.e., Mexico City).
The municipalities within each state.
Corporate income tax levied at federal level.
The national tax rate for companies is 30%.

GLA-MX-02 Registration

Question from client:
Which government unit is responsible for the collection of Mexico corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for this certificate number? Do I need to use the industrial and commercial certificate electronic card to apply?

Evershine RD:
Responsibility for administering federal taxation rests with the Mexican Tax Authority (Servicio de Administracion Tributaria, or SAT).
Access the section on procedures on the website of the SAT, https://www.sat.gob.mx/home and choose the option RFC on the top navigation bar.
Fill in the information requested by the electronic form “Registration to RFC”.
Once the complete documentation is submitted before the ADSC office, the acknowledgement of registration in the Federal Taxpayer’s Registry is obtained that same day.
Schedule an appointment and attend to the ADSC with the corresponding documentation.
Submit the documentation to the tax authorities that will assist the process.

GLA-MX-03 GLA Order (OD)

Question from client:
What is the order of Mexico corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays? At the same time as the declaration and payment?

Evershine RD:
Deposit first (DF). Pay by installment first and declare later.

GLA-MX-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Mexico corporate income tax return (information flow determines the tax base)? Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year? Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Evershine RD:
Annual income tax return and the informative tax return must be filed within 3 months of the end of the official fiscal year (Taxable year) which is from 01 January to 31 December.
All companies must submit their company tax returns electronically
A “Tax Mailbox” is assigned to all registered taxpayers to facilitate electronic communications between them and the Mexican tax authority.

GLA-MX-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Mexico corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Evershine RD:
Corporate taxpayers are required to make monthly payments on account (i.e., estimated payments) of the annual tax due.
The estimated payments are computed by multiplying the profit margin the company earned in the previous fiscal year by the receipts of the current year through the relevant month.
These payments are made on the 17th day of the month immediately following that to which the payment corresponds.
No monthly estimated payment is required in the first fiscal year, when the company has filed a notice that its activity is suspended, or if no tax is estimated to be due (subject, however, to the requirement that the first estimated tax return, showing no tax due, must be filed).
Payments for more than 2,000 pesos must be made by:
• Cheque;
• Credit, debit, or service card; or
• Through an electronic wallet authorized for this purpose by the Tax Administration Service.

VAT – Mexico VAT

VAT-MX-01 VAT Tax Entity

Question from client:
Is Mexico VAT National VAT? Local VAT? Or is there a national plus Local VAT?
What if the National VAT and Local VAT are levied separately or levied together?
What is the standard VAT rate? What is the special VAT rate?

Evershine RD:
VAT levied at federal level.
In Mexico, the following VAT rates apply:
Standard rate: 16%
Reduced rate: 8% (northern and southern border zones)
Other: Zero rate and exemptions
VAT (Impuesto al Valor Agregado (IVA)) replaced the federal comercial receipts tax.

VAT-MX-02 Registration

Question from client:
Which government unit is responsible for the levying of VAT in Mexico?
The registration of Mexico’s VAT levy status, that is, the application procedure for VAT certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a VAT certificate number? Do I need to use an industrial and commercial certificate electronic card to apply?

Evershine RD:
The Ministry of Finance is in charge of tax policy for VAT, and the Tax Administration Service administers and collects VAT in Mexico.
Registration in the RFC and a tax ID must be obtained in the month after the deed of incorporation of the entity is formalized.
The process for tax ID registration may be undertaken online, in person, or remotely as follows:
Online Registration: The registration process can be started online and concluded at any local office of the Mexican Tax Administration Service (SAT) within 10 days following the completion of the online request form.
To register and obtain the RFC, the entity must first complete the online application form and submit the relevant supporting documentation electronically to the SAT.
The online questionnaire should be completed and after that, a folio number is assigned. This number should be carefully noted as it is required to complete the registration process.
Within 10 days of submitting the online form, the Mexican entity should schedule an appointment with its local administrative SAT office to attend a meeting in person and provide the relevant documentation. Appointment can be scheduled online.
Mexico does not issue VAT numbers. Instead, taxpayers are issued a unified tax ID applicable for all taxes, not just VAT.
The 12-digit tax identification number has the following format: “ABC 111111 A11”.
The first 3 digits are from the taxable entity’s name.
The next 6 digits correspond to the date the entity began operations.
The final 3 digits are determined by the tax authorities.

VAT-MX-03 WWT Order (OD)

Question from client:
What is the order of Mexico’s VAT declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay? At the same time as the declaration and payment?

Evershine RD:
Same period (SP): Filing of VAT return and pay the taxes.

VAT-MX-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Mexico VAT declaration (information flow determines the tax base)? Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year? Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Website URL?

Evershine RD:
Under Article 32(VIII) of the VAT Law, Mexican VAT returns are generally due monthly, on the 17th of the month following the month being reported on.
Electronic filing is available in Mexico and is mandatory for taxpayers. Refer to https://www.sat.gob.mx/home
Under the VAT Law, payment is generally due by the deadline for filing the VAT return under Article 5-D of the VAT Law.

VAT-MX-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Mexico VAT payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Evershine RD:
Taxes and contributions should be paid though wire transfer and, in some cases, by cheque.
The payments by personal cheque can be made when issued from the taxpayer’s account and are dispatched by him to cover the whole of contributions and accessories through periodic statements.
Tax payments and the different contributions should be calculated and paid in pesos.
Payments that must be made abroad may be made in the currency of the country from which payment is made, under Article 20 of the Federal Fiscal Code.