With regard to the applicable 2020 fiscal amendments, Section X was added to Article 17-H of the Mexican Internal Revenue Code [in Spanish: CFF], in which the tax authorities have indicated that they can revoke the digital seal certificate (DSC).
With respect to this topic, and from an economic perspective, the digital seal certificate is an indispensable element for the issuance of Digital Tax Receipts [in Spanish: CFDI], invoice [in Spanish: factura], since the cancellation of the aforementioned seal prevents taxpayers from being able to provide a receipt that complies with the fiscal requirements of their clients. Therefore, one is closely bound together by the normal course of operations of the taxpayers to the extent that it could lead to the loss of sales, clients, just to mention a few.
The cases in which the authorities might revoke the DSC are:
• When the taxpayer is disclosed in the definitive list for having issued tax receipts that cover non-existent, simulated, or illicit operations [In Spanish: EFOs].
• Failure to file a yearly tax return one month after the submission date, or for two or more provisional or final tax returns; consecutive or non-consecutive.
• When registering the Taxpayer ID Number [in Spanish: RFC], incorrect information is provided such as the fiscal address that prevents the entity from being located.
• When during the execution of the administrative process the taxpayer cannot be located, or if the same disappears or is not located or has vacated a residence without submitting the corresponding notice.
• In the exercising of their powers the authorities detect that the taxpayer cannot be located, has disappeared, or has vacated the fiscal address.
- It will be understood that the powers to countercheck will be from the moment in which the first transaction was made for the serving of the documents that mandates their practice.
• When it is detected that the reported income as well as the tax withheld by the taxpayer do not coincide with what is shown in the Internet Digital Tax Receipt [in Spanish: CFDI], nor with the files, documents, or databases that the tax authorities may have.
• When it is discovered that the taxpayers have made wrongful transfers of financial losses and are in the definitive list.
• When for tax purposes, receipts are submitted that cover non-existent operations, and as such, deductions and credits are intentionally applied that lower the taxable base of contributions payable, or even credit balances that are generated for obtaining a return.
Taxpayers who have applied for a temporary suspension of the certificates may request a clarification that provides the relevant information and reactivation of the same, which will be on the day after having filed the request. This procedure also indicates that the authorities will request additional information in order to determine if the certificate will be reactivated or revoked.
Taxpayers who have had their Digital Seal Certificates revoked will be able to perform a procedure determined by the Mexican Tax Administration Service [in Spanish: el Servicio de Administración Tributaria] (SAT), that applies regulations for amending detected inconsistencies.
As such, they will be able to provide evidence that is within their rights in order to obtain a new certificate. The tax authorities must issue a decision regarding the aforementioned procedure no later than three days, counting from the day following that in which the corresponding request was received.
In view of the above, as a firm we always seek to provide the appropriate support in tax-related matters. For this reason, we would like to provide you with different tools that help us in offering a basis for assessing any tax contingencies, and for considering any possible risks for implementing preventive or corrective action, and for avoiding any fines from the authorities, or even the suspension or cancellation of the seals for invoicing.
Please contact us if you require further information or if you have any inquiries regarding the same.