With the purpose of complying with the obligations related to Internet Digital Tax Receipts [in Spanish: CFDI] that are indicated in the current tax provisions, one of the requirements of the aforesaid receipt is to determine whether it is made as a lump sum payment or by installments. This means that if taxpayers receive payment for their invoices in more than one payment they will be obligated to place a caption that reads “installment payments”. Previously, with the Periodic Amendments enacted to the tax law, there was an advantage for the taxpayer that released him/her from the obligation of sending or receiving the Internet Digital Tax Receipt for each payment that was received or made. At present, the said provision has not been newly published by the Mexican Tax Administration Service [in Spanish: SAT]. As a result, all taxpayers must comply with the obligation to send additional Internet Digital Tax Receipts when there is an assumption of installment payments. It’s important to mention that for the purposes of the Value-Added Tax Law [in Spanish: la Ley del Impuesto al Valor Agregado (IVA)], it is understood that an invoice or Internet Digital Tax Receipt is paid by installments when the remuneration ceases in more than one payment. In addition to the aforementioned, the Mexican Internal Revenue Code [in Spanish: el Código Fiscal de la Federación] and in general the rules that the Mexican Tax Administration Service issues, mention the following obligations that are treated as installment payments: 1. Issue an Internet Digital Tax Receipt that covers all transactions. 2. Issue an Internet Digital Tax Receipt for each installment, making reference in the same to the control number (UUID) of the Internet Digital Tax Receipt that was previously issued for the total transaction amount. The invoice or Internet Digital Tax Receipt that the taxpayers must send for each installment must include the following requirements: • The Taxpayer Identification Number [in Spanish: RFC], of the issuer • The place and date of issue • The Taxpayer Identification Number of the recipient, or where applicable, the generic Taxpayer Identification Numbers • Payment method: cash, transfer, etc. (Mark “NA” or other that is similar) • The Income Tax scheme in which you are registered (Mark “NA” or other that is similar) • Business address in case there is more than one premises or establishment • Folio number and digital stamp of the Mexican Tax Administration Service • Digital stamp of the issuing taxpayer • Number and date of tax receipt that covers the transaction • Total amount of transaction • Amount of installment that is covered • Amount of withholding tax • Amount of applicable tax shifted Taxpayers that want to be credited Income Tax or deduct an expense with an Internet Digital Tax Receipt that does not contain the caption: “installment payments”; and this expense which may have been liquidated in various payments, such individuals may face issues with the authorities who may question and reject the accredited Income Tax and the deductible expense. It is our understanding that this provision can cause those taxpayers to deal with practical problems such as concluding transactions in one payment, and subsequently a case may arise in which the client does not pay the invoice in this manner; but rather he/she does it insomuch as there is available cash flow to do so. This would also apply to supplier payments. With respect to taxpayers who do not send Internet Digital Tax Receipts in installments, and who are obliged to do so, it could lead to a fine from $12,070.00 pesos up to $69,000.00 pesos. We suggest that you review the commercial terms with each of your clients and suppliers for the purpose of complying with these obligations.