Both individuals and corporations have the obligation to comply with the regulations and requirements of the tax authority and there are so many changes and updates that the Tax Administration Service (the SAT), performs requiring taxpayers to be well informed. Whether they are individuals or legal entities, they will always have to ask an expert in tax regulations to be able to adequately comply with the provisions that the SAT requires of their taxpayers. Likewise, any legal entity or natural person that begins or wants to start doing business within the Mexican Republic must be kept informed and has to be able to comply with all the requirements that this entity requires.
The first thing that each natural or legal entity must do is to document or educate themselves regarding the obligations that their tax regime requires. It should also be known how the different rules and regulations apply in our businesses or operations, the facilities that exist to be able to comply with the Fiscal Authority, and the possible sanctions that may be generated for not complying with the guidelines that are required. It should be borne in mind that revisions to the same sanctions can always be requested in order to get an extension and even the “pardon”, so to speak, of the said sanction, taking into consideration that all the requirements of the SAT must be fulfilled in a timely manner. The SAT ensures that we always comply with our tax obligations and monitors all taxpayers to be able to make sure that these obligations are met.
Tax obligations not only depend on being a natural or legal entity, there are also different types of tax regimes that depend on the type of business the taxpayer does. Each different tax regime grants the taxpayer rights and obligations derived from carrying out a specific economic activity. The first tax obligation that must be met regardless of the regime or being a natural or legal entity is the presentation of periodic returns and the obligation to issue electronic receipts for the activities that are carried out. Another primary obligation for all taxpayers is to be registered in the Federal Taxpayers Registry and keep all the data updated (name, address, start and stop of activities, regime, etc.) and have a tax mailbox to consult and see the communications that the SAT has made to the taxpayer.
Within the types of tax regime, it is possible to first differentiate between individuals or legal entities. Within this section, tax obligations will be listed depending on the regime to which they belong.
- Wage-earners or employees: Receive income and benefits through an activity subordinate to an employer and only the annual return that is usually made by the same employer must be submitted.
- Leasing of Real Estate: Those who have a fixed income from renting a property either for commerce or housing. They must always provide a receipt against the lease through an electronic billing system. Individuals who pay tax under this type of regime must submit a monthly, annual, and, if necessary, or if the person wants informative declaration.
- Business Activity: Individuals who have a business or trade and must submit their electronic accounting and do electronic invoicing in order to verify all transactions. Annual, monthly, informative and multiple informative declarations must be submitted.
- Fees: Independent persons who perform independent services and provide receipts for honorary fees. These people must comply with electronic accounting and invoicing to generate tax receipts (CFDI) and record the use that is given to the income they receive. An annual, informative, and multiple informative declaration must always be presented when working under this regime.
- Tax Incorporation Regime (RIF): People who carry out business activities, who sell goods or provide services for which a professional title is not required. They must handle accounting and electronic invoicing, in addition to submitting bi-monthly returns.
For Legal Entities:
- General regime (They are all types of companies that are described and regulated within the Commercial Code and the General Law of Titles and Credit Operations which are): mercantile companies, mercantile society, society, civil association, cooperative production society, credit, insurance and surety institutions, general deposit warehouses, financial lessors, credit unions and capital investment companies; decentralized organizations that commercialize goods or services, and trusts with business activities, among others, that carry out lucrative activities.
- Their tax obligations are to keep their Electronic Accounting and electronic invoicing; submit monthly declarations and payments, as well as annual declaration. They must also present the Informative Declaration of Operations with Third Parties (DIOT) and annual informative declarations, and the corresponding Income Tax withholdings. They must, in the same way, keep financial information up to date, such as financial statements, inventories, tax profit, and the amount of the Workers’ Profit Sharing. Keep the SAT informed about loans and contributions for future capital increases that are received in cash, within 15 days after receiving them.
- In the event of having been classified as a taxpayer of IEPS (Special Tax on Products and Services), the corresponding declarative information must also be submitted.
- Non-profit: They are not intended to obtain financial gain or profit. They must issue tax receipts, keep Electronic Accounting, submit monthly and informative returns, withhold income tax in case of paying wages and salaries, receive professional services, issue income tax withholding certificates, pay the subsidy for employment to workers who are entitled to receive it according to the ISR.
In the event of a forgetfulness, erroneous information or omission in the returns, there is the opportunity to correct it later by submitting the omitted or supplementary return within a period established by law, but this could depend on the particular situation of the taxpayer.
In case of non-compliance, the tax authority will send them a request to present this omitted declaration plus the corresponding sanction, which is usually a fine unless the law provides for another sanction, which will also obey the particularities of the taxpayer. You can always count on the help or advice of experts in the field to be able to comply with the obligations in the best possible way.
Gloria Ponce de León & Hernández