Update: Mexico’s Electronic Audits Underway

Steve Sprague
December 1, 2016

This blog was last updated on December 1, 2016

Mexico’s tax authority, the SAT, announced its implementation of real-time, electronic audits earlier this year. Since going live with this initiative in September, it recently issued a new statement regarding its progress and goals for the program. Designed to speed up the auditing process and minimize the time it takes for taxpayers to correct compliance errors, and therefore pay appropriate taxes and fines, the SAT expects to complete 3,000 electronic audits this year. It estimates the average time for an electronic audit and subsequent corrections to be just 4 months, while traditional audits average 1 year. To learn more, please plan to join us for a webinar on Thursday, December 15th at 12pm ET on “How to Prepare Prepare for Compliance Changes in Mexico and Colombia.” 

In addition to speed, the SAT cites several benefits that these electronic audits will offer companies in its latest announcement about the initiative:

  • E-audits are less intrusive, as they will only focus on specific irregularities instead of the enterprise’s full accounting records.
  • These audits reduce fiscal compliance costs by eliminating the need to go to the SAT office for fiscal assistance. Communication can now all be done electronically through buzon tributario (an electronic mailbox for tax and compliance-related correspondence).
  • The buzon tributario also results in more transparent communication between taxpayers and the fiscal authority.

     

Despite these benefits, one critical risk is clear: with real-time electronic audits, errors will not slip through cracks. The SAT has created savvy processes for identifying discrepancies and immediately taking action to get to the bottom of the errors. Specifically, it will look for irregularities between tax liabilities reported in electronic documentation and what’s actually paid. The SAT will compare e-invoices and accounting records from both the enterprise itself in addition to vendors and suppliers – as well as incorrect tax calculations and omissions. And regardless of whether there was a simple typo, an honest mistake or an actual deception, errors of any kind will result in penalties, which can add up to more than $4,000 per invoice that includes an error or does not match eAccounting records. (Check out country-specific fines and penalties in our tip sheet.)

In its guide to preparing for these e-audits in Mexico, EY outlined several necessities. “Automated processes, specific tools and formats, tracking and matching of invoices, validation reports, data security, and comprehensive analytics are some of the demands that e-audits are now placing on taxpayers’ systems and operations.” Companies must also have accurate, accessible records in order to defend inconsistencies in the event of an electronic audit. To learn how Sovos is helping clients enact these requirements and safeguard against electronic audits in Mexico, contact us.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Steve Sprague

Como director comercial, Steve Sprague dirige la estrategia corporativa, las iniciativas de penetración de mercado y de field enablement para el negocio del impuesto sobre el valor añadido global (GVAT) de la empresa. El estilo de liderazgo de Steve se basa en su convicción de que, para que las organizaciones tengan éxito, deben comprometerse e invertir en los tres pilares estratégicos de la empresa: las personas, las prácticas y los productos.
Share this post

Hungary Supplemental Insurance Premium Tax
EMEA IPT
July 11, 2022
Extra Profit Tax: An Introduction to Supplemental IPT in Hungary

This blog was last updated on October 28, 2024 Update 7 October 2024 by Edit Buliczka Hungarian Tax Office Updates IPT Declaration Form for 2023 The procedure necessary to correct an underdeclared premium figure in Hungary can be complicated. The complexity of a correction for return form 2320 has become even more challenging. Following a […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
The Insurer’s Guide to the 2025 Bond Project

This blog was last updated on November 4, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
New ViDA Proposal Set for ECOFIN Approval

This blog was last updated on November 1, 2024 The Council of the European Union has released a new proposal regarding the VAT in the Digital Age (ViDA) reform. The proposal aims to modernise and streamline VAT systems across the EU, notably e-invoicing and Continuous Transaction Controls (CTC). Members States will review it on 5 […]

what is peppol
E-Invoicing Compliance North America
October 29, 2024
What it is PEPPOL?

This blog was last updated on October 29, 2024 Peppol E-invoicing explained: What it is and how it works The global adoption of electronic invoicing is accelerating. Governments worldwide are pushing to adopt e-invoicing to digitally transform their national systems and, often, to close the VAT gap. While many countries have introduced their own e-invoicing […]

remote sellers sales tax
North America Sales & Use Tax
October 28, 2024
Will Congress Act to Simplify Remote Seller Sales Tax Collection

This blog was last updated on October 29, 2024 When the United States Supreme Court ruled in 2018, that South Dakota’s law imposing sales tax collection requirements on sellers without in-state physical presence was constitutional, it did not grant states free reign. States are still responsible for ensuring that their sales tax requirements are manageable, […]

dtc shipping laws for craft spirits
North America ShipCompliant
October 23, 2024
Why It’s Time to Reform DtC Shipping Laws for Craft Spirits

This blog was last updated on October 23, 2024 While wine lovers have enjoyed the convenience of direct-to-consumer (DtC) shipping for nearly two decades, the craft spirits market is still not afforded the same access. Outdated and restrictive spirits shipping laws have kept the spirits industry from fully leveraging the benefits of DtC shipping, leaving […]