One of the questions commonly asked by both Mexican and foreign businessmen is the uncertainty of not knowing if these essential expenses for their business are deductible for tax purposes in Mexico because they were incurred abroad.
Nowadays doing business is very easy to have foreign trade operations to meet business needs, in our experience in different economic sectors it is common to have this type of transactions, for example, in Mexican tourist areas such as the Mayan Riviera (Cancun, Playa del Carmen, etc.), Riviera Nayarit (Nuevo Vallarta, Punta Mita, Bucerias, San Pancho, Sayulita, etc.), Puerto Vallarta, Los Cabos, etc.; the hospitality sector is common to use intermediaries to promote properties, rooms, etc., and where such intermediaries charge a commercial commission, some of them are foreign for tax purposes and therefore are not required to issue a Mexican tax receipt but a tax receipt from the country where they are tax residents, Some of them are foreign for tax purposes and therefore are not required to issue a Mexican tax receipt but a tax receipt from the country where they are tax residents.
And if such expenditure is essential for the purpose of the business activity carried out in Mexico, it is necessary to cover certain tax requirements that the foreign tax receipt must have, which are detailed below:
It must contain the name, address and tax identification number of the foreign supplier.
Place and date of issuance of the voucher.
RFC code and name of the Mexican taxpayer.
Detailed description of the products and services such as quantity, type and unit of measurement.
Value of the services and products, as well as consigned in quantity and letter.
In addition to these requirements, we would like to conclude with two additional comments to the above mentioned requirements regarding the foreign tax receipt:
It is important to have material evidence of the services or products covered by such receipts to demonstrate the materiality of the acts covered, an example of this would be a report of the services contracted.
If the transaction is required by Mexican domestic law to withhold a Mexican tax, the Mexican taxpayer must issue a CFDI for the withholding.
Need more information? Please contact us.
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