- VAT in Mexico is only creditable if a valid electronic invoice (CFDI) is issued and the expense is actually paid, unlike the accrual basis in the EU.
- Delays in supplier payments can lock up significant VAT amounts, creating cash flow challenges for multinationals.
- Certain exemptions (e.g., unprocessed food, housing rentals, education, wages) can lead to unexpected embedded costs for companies.
- VAT refunds in Mexico are slow (6-12 months) and subject to detailed audits, tying up liquidity for exporters and businesses with high input VAT.
- Additional complexities include VAT withholding on services from individuals, special border rates, and strict documentation requirements for 0% export VAT.
Source: ggi.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "Mexico"
- SAT Unveils 2026 Master Plan to Combat Fake Invoices and Modernize Tax Compliance in Mexico
- SAT Confirms CSF Not Required for Electronic Invoicing; Noncompliance May Lead to Fines
- Key Tax Changes for Mexican Retailers Under the 2026 Miscellaneous Tax Resolution (RMF)
- Mexico’s 2026 SAT Plan Targets Fraudulent Invoices with Stricter, Risk-Based Audits
- Key 2026 Tax Changes for Mexican Retailers: Compliance, Fines, and New Sector Rules
