- Mexico now expressly prohibits insurance companies from crediting VAT on goods or services used to fulfill insurance indemnification obligations (damage compensation or replacement through third parties).
- The rule was added in the 2026 Federal Revenue Law and applies retroactively to VAT credited during fiscal year 2025.
- Transitional relief lets insurers keep crediting VAT from acquisitions received through Dec. 31, 2024, if they regularize VAT credited from Jan. 1, 2025 onward by paying it.
- Insurers who correct 2025 VAT positions can receive a 100% waiver of surcharges and pay the principal in up to 12 installments; those under audit or disputing assessments may also get incentives if they withdraw challenges and regularize.
- The change is expected to raise insurers’ costs and likely lead to higher premiums for policyholders.
Source: taxand.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.
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