United States

Mandatory electronic filing in Mexico begins in January 2015

TAX ALERT  | 

Beginning in January 2015, the 2014 Mexican tax reforms require certain Mexican taxpayers to electronically upload their accounting records every month to a secure website managed by Mexico's Tax Administration Service (SAT). Monthly records for July 2014 forward are required to be uploaded.

Reporting period

Under the laws in effect through 2014, all Mexican enterprise taxpayers as well as certain individuals earning business income as sole proprietors must maintain accounting records on a monthly basis that conform to Mexican accounting standards and Mexican tax rules of accounting. For this purpose, the reporting period ends on the last day of each month (the 28th, 29th, 30th or 31st). Under the 2014 tax reforms, all records electronically filed must conform to the same standards and must also meet other requirements, as discussed below.

However, certain individuals, Mexican governmental entities and non-residents with Mexican-sourced income are exempt from this electronic filing requirement. Non-residents that have a permanent establishment in Mexico must file electronically the accounting records associated with said permanent establishment.

What do taxpayers need to file?

Taxpayers must electronically file:

  1. A chart of accounts that must include a field for grouping the accounts based on mapping conventions established by Mexican tax regulations. Current charts of account may have to be remapped in order to meet the new mapping conventions. Taxpayers should file the chart of accounts initially and each time the chart of accounts is modified.
  2. A trial balance that reflects beginning balances, debits and credits for the month, and ending balances for each account. For year-end closing balances, information on all entries should be included. Detailed accounts related to taxes, including pre-paid taxes, taxes withheld by the taxpayer, taxes receivable and provisions for income taxes should be included. Taxpayers must include information relating to transactions subject to or exempt from value added tax (VAT) and categorize each transaction according to the VAT rate that applies. Mexican tax rules provide further guidance.
  3. Journal entries for each transaction that reflect details such as account headings, subaccounts, sub-ledgers, and a reference to the electronic invoices issued by the taxpayer to document gross receipts, VAT and excise tax rates applicable to a transaction, as well as the tax identification number of the third parties involved in the transactions.

How to electronically file the accounting records

To satisfy the electronic filing requirements, taxpayers must maintain their records in a platform that can create XML-formatted files. Taxpayers must submit their files electronically by uploading the XML-formatted files through the SAT electronic secure mailbox system.

Taxpayers should consult with their IT departments and IT consultants to determine whether their systems can conform to these requirements.

Filing due dates

Taxpayers must begin filing electronically in January 2015 and must file information relating to the 2014 year as follows:

Reporting period (YTD)

Reporting period (YTD)

July 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income, respectively)

August 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income, respectively)

September 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income respectively)

October 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income, respectively)

November 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income, respectively)

December 2014

Jan. 25 and 27, 2015 (corporations and individuals with sole proprietor business income, respectively)


Taxpayers must electronically file accounting records for each month of 2015 and subsequent years on the 25th and 27th day (corporations and individuals with sole proprietor business income, respectively) of the following month.  Taxpayers must file any changes to their original submissions within three business days after the changes occur.

Direct audits by the SAT and consequences of delinquency

During the course of an audit, the SAT may still require the taxpayer to produce its accounting records even if these records were timely uploaded to the SAT's website.

In the event that the taxpayer's uploaded data contains errors, the SAT will notify the taxpayer by email. The taxpayer will have three business days to submit revised information. If the taxpayer fails to correct the errors identified in the notice within the three-day period, the SAT will treat the information as not filed. This will expose the taxpayer to substantial penalties and fines and a potential SAT audit.

Possibility of an "annulment lawsuit"

Under Mexican law taxpayers may file an action, known as Juicio de Amparo, or an annulment lawsuit, to challenge a law that is unconstitutional or against fundamental principles of law. The annulment lawsuit is filed in federal court. In the tax arena, it is not uncommon for Mexican taxpayers to file annulment lawsuits in the federal tax courts against tax provisions or actions taken by a tax authority (the SAT). If the tax court rules in favor of the taxpayer, that particular taxpayer is not required to apply the damaging tax provision or abide by the mandate imposed by the SAT that gave rise to the annulment lawsuit.

Mexico is a civil law country, and as a result, its courts are not bound by prior court decisions.   Thus, each taxpayer must file its own lawsuit to challenge a provision of law...

Some lawyers have argued that taxpayers should challenge the new electronic filing requirements because they believe the law violates a provision of the Mexican constitution that provides that no person can be required to exhibit or produce proprietary information before the government produces a legitimate summons.

What should U.S. companies do?

U.S. companies that have a Mexican subsidiary or permanent establishment in Mexico should work with their Mexican tax advisors and IT departments to ensure they are ready to meet the upcoming Jan. 25, 2015, filing deadline. In addition, taxpayers should assess whether to challenge the new electronic filing requirement in court. Since Mexico is a civil law country, a favorable ruling obtained by one taxpayer will not apply to other taxpayers. Thus, each taxpayer must evaluate a potential court challenge based on their specific facts.

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