Check Out the Transcript for Our Webinar on Mexico’s Tax & E-Invoicing System
Did you miss our webinar on Mexico’s tax world and its revolutionary e-invoicing system?
Well, here’s your opportunity to catch up on some of the action you’ve been missing.
Please feel free to download the transcript below and make sure to share with your friends and colleagues.
We’d also like to take this opportunity to thank Jesús Ramírez, an international tax consultant who works for a major hospitality industry company, for taking the time to walk us through Mexico’s tax and e-invoicing systems. And sharing with us his love of tacos al pastor!
For now, here are some of the event’s main highlights.
Can you give us an overall perspective of corporate tax rates in Mexico and how they work?
Jesús Ramírez: “The corporate tax in general in the country is 30 per cent for legal entities and 35 per cent for individuals. For individuals, it depends on how much you are receiving as income and that will increase the tax rate. However, starting in 2019, our new President decided to implement a new tax rate in the north of the country, just on the border with the USA. So we have a special tax rate there of 20 per cent for income tax and 8 per cent for VAT. Generally, in the rest of the country, it’s 16 per cent. There are many requirements; it’s no easy to receive that benefit…they have to be new companies and have new assets…and, actually, a huge requirement that everybody is saying, “No, no, I don't want to use is,” and this is another matter, but there are blacklists of companies in Mexico that don’t work in reality, they just issue invoices in order to get a tax deduction for another company, etc. So if you are on that blacklist, and you cooperate with huge companies on the blacklist, you cannot receive these benefits.”
Do you want to give us a background as to when Mexico’s e-invoicing system came online and what it involves?
Jesús Ramírez: “So the first thing when you come to Mexico and you want to open a company, you need to register before the Mexican tax authority. You need to get a tax ID but immediately after the tax ID, you need to get an electronic signature. What is an electronic signature? You need to get your iris scanned, fingerprints, photos of all your face for the file, and that’s the way that they are sure who you are. And then when you get your electronic signature, you’ll have access to your electronic tax mailbox. You can do everything you want to do, talking about taxation, via this website. You will open with some password with your tax ID in the website of Mexican tax authority SAT.”
For a small company, who might not have the resources a large multinational or whatnot, how easy has it been to use the system and to navigate through the system? Does it require sort of technical expertise or is it something that is user friendly and can be easily used by the small company?
Jesús Ramírez: “Sometimes, some things are really difficult but I think they designed it perfectly, it’s a really user friendly the page, so you can get to your information really easily. They've designed the interface in a very friendly way. So you don't need to be technical. There are many videos in YouTube that show how to work it. Actually, the videos were made by the Mexican tax authority. So you can go to YouTube and search, “How can I get into my tax inbox?”
“But the most important thing in the invoice is the QR code. You can use your phone; you don’t have to have a specific application, just a QR reader. If you read that, you will get all the information on the invoice. I scanned the code and this is the page of the Mexican tax authority and you’ll have all the information—who issued the invoice, who received it, the amount, the date, all the details of the invoice. So as you receive it, you can immediately check if it’s a real invoice or it’s fake.”