VAT Number Format In Mexico

Mexican VAT number contains 3 digits, 6 numbers, and 3 digits. (e.g., ABC123456A12).

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VAT Rates In Mexico

The standard VAT rate in Mexico is 16%, with some services exempt from Mexican VAT, such as existential foodstuffs.

• 16% (Standard) – applies to all taxable supplies, with certain exceptions.
• 0% (Reduced) – existential foodstuffs such as milk, bread, wheat, meat, corn, and other agricultural services.

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VAT Payments And Returns In Mexico

All businesses with Mexican VAT number must submit periodic VAT reports and payments.

VAT Returns Frequency In Mexico

For all companies that operate in Mexico, VAT returns must be submitted monthly by the 17th of the month following the period end.

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Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the Mexican government prescribed the penalties as follows:

• 20% of the VAT due if the taxpayer pays the amount before being notified by the tax authorities of a final resolution but after an audit has begun.
• 30% of the VAT due if the taxpayer pays the amount after being notified by the tax authorities of the final resolution.
• 55% to 75% percent of the VAT due in other cases.

Due to the electronic invoicing system, all electronic invoices (Comprobante Fiscal Digitales por Internet – CFDI) must contain at least the following:

• supplier/issuer data (name, address, tax number of the company)
• customer data – a name and address
• unique, sequential invoice number
• date of issuance
• location of issuance (city name)
• The serial number of the digital certificate
• authorization number (the one provided by the Local Tax Authorities)
• the authorization year
• full description of goods and services supplied – quantity, the price per unit
• the net, the taxable value of the invoice
• rate and amount of VAT applicable for the category of goods and services provided
• the invoice total, the gross value of the invoice

As of 2014, all business entities and economic operators generating more than 250,000 MXN per annum in Mexico are obliged to comply with mandatory e-invoicing in Mexico. 

Governmental body responsible for e-invoicing in Mexico:

• ‍Servicio de Administración Tributaria – SAT
  

Comprobante Fiscal Digitales por Internet – CFDI, represents an e-invoice,  encrypted digital version of the paper invoice. To be able to issue CFDI, Mexican businesses must obtain a digital signature (Sellos Digitales Certificados - SDC), which verifies the origin and authenticity of the invoice. Also, CFDI must be stored on a central database hosted by the local tax authority or government-approved vendor.

What does the e-invoicing process in Mexico look like?

1. The selling entity generates an XML message with all the required information including the digital signature (Sellos Digitales Certificados – SDC), and sends it to the PAC (Proveedores Autorizados de Certificación), an authorized certification provider.
2. PAC validates the authenticity of the invoice, and if the content of the invoice is fine, PAC returns the invoice with the seller’s CSD back to the seller.
3. In parallel, PAC sends the stamped electronic invoice (CFDI) to the SAT (Mexican Tax Authority).
4. Together with an XML, the seller generates the printable version of the invoice in PDF and sends both files to the buyer.

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Date updated [May 12, 2021]

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