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Businesses which supply taxable services or goods must register for Mexican VAT. This includes foreign companies with a permanent establishment. Foreign companies without a permanent establishment may not register as a non-resident trader, and cannot reclaim Mexican VAT.
VAT
Individuals and legal entities that engage in the following activities within Mexican territory:
- transfer of goods
- rendering of independent services
- temporary use or enjoyment of goods
- importation of goods or services.
IEPS
Individuals and legal entities if engaged in the following activities:
- disposal and permanent import of the above-mentioned goods in Mexican territory
- rendering of services related to the above-mentioned goods.
Like a number of countries in South America, Mexican businesses are required to issue invoices on officially produced and endorsed invoices. Although since 2011, electronic invoices may be used for larger businesses, and special digital certificates must be obtained. When issuing invoices, companies must include the following information on any invoice:
Since 1 January 2014, all taxpayers who use the digital tax invoice scheme, Comprobante Fiscal Digital (CFD), should use the internet digital tax invoice scheme (CFDI) to issue electronic invoices. From 2014, taxpayers earning more than 250,000 Mexican pesos (MXN) a year must use the CFDI scheme for issuing electronic invoices.
Currently, an electronic invoice (CFDI) must be issued for all operations carried out. There a different types of CFDI such as: income, expenses, withholding and payroll.
Electronic invoicing requires:
- the advanced electronic signature
- processing a digital seal certificate
- using the free service invoice offered by the Tax Administration Service or choosing from any of the authorized certified providers found in the portal of the tax authority, which is constantly updated.
An authorized certified provider is someone authorized by the Tax Administration Service to validate the CFDIs generated by the taxpayers, assign the folio and incorporate a digital seal from the Tax Administration Service. They are also obligated to send a copy of the CFDI validation by their customers to the tax authority.
Additionally, the electronic invoice (CFDI) shall contain, if applicable, the required Complement to incorporate specific tax information of the operation.