Mexico: Deadline for VAT refund to be shortened

On September 22, 2020, the Mexican government will submit an initiative to Congress to reform tax law that would shorten the deadline for reimbursing value added tax (VAT).


Goal of the tax reform

The aim of the tax reform is to mitigate the economic crisis triggered by COVID-19, in order to support in particular the industries that are particularly affected by the economic consequences of the pandemic (tourism, transport and the global supply chain). Existing measures would have

Support for the proposal on current VAT refund procedures has been delayed and businesses have been hit hard economically. For example, the expedited process for approving VAT refunds for exporting companies that have AAA, AA and A certifications has recently been abolished. These and other restrictions, which are seen as unnecessary and excessive requirements, are to be abolished or reversed by the reform initiative.


Contents of the tax reform

With regard to VAT refunds, the initiative proposes refunding low VAT balances within 15 days of submitting the refund claim instead of the current 40 days. Tax authorities could request additional information from taxpayers in the next 10 days of filing the refund claim, and taxpayers would then have an additional 10 days to respond.

In some cases, a second notice could be issued by the tax authorities, also with similar deadlines for information and subsequent response deadlines.


These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!