Issued invoices against declared income
The SAT, Mexico's tax authority, has every invoice you issued. Compare the year's income CFDI invoices, cancellations and credit notes against what you declared in the monthly payments. A difference here is one of the first things the authority detects.
Received invoices and deductions
To deduct an expense you need the CFDI invoice and the expense has to be necessary for the business. Check how it was paid as well: payments over 2,000 pesos must be made by transfer, nominative check or card to be deductible.
- Invoices with the correct tax ID and CFDI use
- Payment complements for invoices paid in installments or later
- Personal expenses mixed with company expenses
Payroll
Every payroll payment has to be stamped, and income tax withholdings have to be paid. Also check that social security (IMSS) contributions match the salaries you paid.
Monthly payments and VAT
Monthly payments have to match the accounting records. If there are VAT credit balances, locate them before year end to decide whether to request a refund or offset them.
Fixed assets
Purchases of equipment, vehicles or property are not deducted at once: they are deducted by a percentage each year. Check that depreciation is calculated and that disposals are recorded.
Tax mailbox and compliance certificate
Check the messages in your SAT tax mailbox and generate your compliance certificate (opinión de cumplimiento). If it comes out negative, it is better to know in November than when a client asks for it before paying you.
Why it pays to correct early
When you correct on your own, before the authority asks, in many cases no penalties are imposed (article 73 of the Federal Tax Code). Inflation adjustments and surcharges still apply, but the cost is usually lower than that of a SAT review.
This article is for information only and does not replace a review of your case. Tax rules change: check the publication date.