Preventive actions vis– á- vis the Audit/Tax Examination and Collection Master Plan for 2023
On January 29, 2023, the Mexican Tax Administration Service (SAT) unveiled its Audit/Tax Examination and Collection Master Plan for 2023. Although, in 2023 there was no tax reform and thus new taxes were created or the rates of existing taxes were increased, the SAT has the goal of achieving a higher tax collection than that obtained in 2022.
Currently, the SAT has increased the use of information technologies in order to be more efficient in its management and verification faculties.
Additionally, with the tax reforms of 2020 (in which theconcept of business reason was incorporated) and 2022 (in which said concept is reinforced), greater legal tools were granted to the tax authorities to be used to achieve the objective of increasing tax collection.
The SAT pointed out that the Master Plan consists of carrying out coordinated actions between the following areas: Large Taxpayers, Federal Tax Audit, Collection and Foreign Trade.
The actions it will undertake are:
• Management of authority: This power has been exercised through Invitation Letters that have the purpose of promoting voluntary compliance and/or overseeing the regularization of Taxpayers who present differences in their tax obligations. In this Plan, greater Coordination with federal entities is indicated.
• Audit/Tax Examination Actions: The SAT will carry out the analysis and programming of reviews on atypical items (income and expenses), will strengthen the reviews on foreign trade mattersand will publish the effective rates for Income Tax Law –ISR purposes.
In addition to these actions, 16 economic Sectors were announced that will be reviewed to regularize taxpayers who are in default or who present differences in their obligations:
1. Steel
2. Food
3. Automotive
4. Beverage and tobacco
5. Retail
6. Construction
7. Electronics
8. Energy
9. Entertainment
10. Pharmaceutical
11. Mining
12. Real Estate Services
13. Financial system
14. Telecommunications
15. Ownership of stocks/shares
16. Tourism/Hospitality
Likewise, the tax authorities specified the concepts and conducts that they will be reviewing, which are as follows:
1. Improper application of balances in favor
2. Hydrocarbon supply chain
3. IEPS– Excise Tax credits
4. Pensions, payroll exemptions and simulation of rendering of specialized services.
5. Refunds, 0% rate, non-object and temporary import.
6. Undervaluation in foreign trade operations and improper use of treaties.
7. Verification of compliance with IVA-IEPS (value added tax – excise tax) certifications.
8. Mining rights
9. Corporate restructuring and the tax effects of spin-offs and mergers.
10. Partners and shareholders (individuals in transactions associated with restructurings)
11. Tax losses
12. Preferential tax regimes
13. Financing, capitalization of liabilities and distribution of profits.
14. Payments abroad and international restructurings
15. Trusts
As can be appreciated, some of the concepts and conducts to be reviewed are closely related to the operations carried out by Multinational Groups, such is the case of corporate restructurings (mergers and spin-offs), preferential tax regimes, financing, capitalization of liabilities, foreign payments, and international restructurings, among others; which will be an additional indicator that the tax authorities will be observing. For this reason, it is important to anticipate and implement preventive actions in the face of this new SAT strategy.
Some of the preventive actions we suggest to reduce risks are the following:
• Make a comparison of the effective rates published by the SAT against the income tax- ISRincurred.
• Analysis and diagnosis of tax risks.
• Verify compliance with requirements regarding payments to residents abroad, preferential tax regimes, and accreditations of ISR-income tax paid abroad.
• Alignment of operations according to the value chain.
• Verify that the contractual vehicle that covers the operations is the appropriate one.
• Adequately document the operations between related parties (business reason, materiality and economic substance).
If you wish to consult the complete document of the Audit/Tax Examination and Collection Master Plan, you may do so by clicking on the following link:
https://www.gob.mx/sat/documentos/plan-maestro-de-fiscalizacion-y-recaudacion-2023
