With the 2016 tax reform, the article 22-D of CFF (Código Fiscal de la Federación) was added, which indicates that the tax authority may apply its right to review your books or pay you a visit in order to ensure that your tax refund is accurate. One of the possible effects of this reform is that taxpayers will not take up the option to request the 5-day tax refund in order to avoid an unwanted visit by the authority.
On Friday, January 29th, 2016, SAT issued on its website the 1st Resolution of Amendments to Fiscal Miscellaneous Resolution and contains the following addition to rule 2.3.17 about automatic tax refunds for VAT:
Automatic Tax Refunds
2.3.17 – “For the purposes of Article 22 of the CFF and article 6 of the VAT Law, natural and legal persons who present their VAT refund through the Electronic Refunds and Payments Services by using their FIEL (portable electronic signature) may obtain refunds not exceeding MXN$ 1,000,000.00 within a period of 5 days. The taxpayer may not benefit from this new rule in any of the following cases:”
- Not having confirmed access to the “Fiscal E-mail” (buzón tributario) through the SAT Portal, which will be used to track the process in question.
- SAT not having received the information related to electronic accounting period, which concerned the refund, according to rule 22.214.171.124, sections I, II and III
- Your certificate granted by SAT for issuing electronic invoices is cancelled in accordance with article 17-H, section X of CFF or not issued in the period for which the refund is requested
- Your suppliers have their certificate for issuing electronic invoices cancelled by SAT in accordance with Article 17H, section X of the CFF or not issued in the period for which the refund is requested
- Your data is published in the SAT portal when exercising the Fiscal Miscellaneous Resolution, in accordance to article 69, penultimate paragraph, sections I, II, III, IV, and last paragraph of the CFF, or are included in the final list mentioned in article 69-B, third paragraph of CFF, where it has been published in the (DOF) Official Gazette and the reason for the presumption has not been rejected before publication.
- Data of your suppliers is published on SAT website when applying the facility, in accordance to article 69, penultimate paragraph, sections I, II, III, IV, and last paragraph of the CFF, or are included in the final list mentioned in article 69-B, third paragraph of CFF, where it has been published in the (DOF) Official Gazette and the reason for the presumption has not been rejected before publication.
Although the 5-day tax refund process is relatively easy to deal with, many requirements have to be fulfilled, making it less accessible to the general public in some cases.
Interestingly, if you are a model taxpayer and did not exercise your right to not use a fiscal e-mail, or you are not under the obligation to submit electronic account books because you belong to the regime of agriculture, livestock, fisheries and forestry, or if one of your suppliers has problems, you will not be able to take advantage of the 5-day VAT refund process. Instead, the authority will exercise its electronic revision right and classify you as a risk model when analyzing your case.
Due to the complexities involved with taxation and account in Mexico, it is recommended to seek the advice and assistance from a professional local company who can help you with your financial reporting. Should you require more information regarding taxation in Mexico, don’t hesitate to get in contact with Biz Latin Hub Mexico. Our team provides professional accounting services that are tailored to your business needs. Reach out to Alex at here.