According to the Mexican Federal Tax Code, all individuals and legal entities that are required to file tax returns or issue electronic invoices must register in the Federal Taxpayer Registry. This requirement applies to their activities, their income, and any financial accounts they have opened. To register, a non-established corporation that does not have a permanent establishment in Mexico requires a fiscal representative.
Below, our Mexican lawyers explain the main requirements associated with fiscal representation.
Fiscal representative – definition and applicability
A fiscal agent, also known as a fiscal representative in Mexico, bears joint and several liability for the VAT liabilities of the client. This role can be completed by an accountant, a tax consultant, or even a law firm in Mexico, depending on the preferences and needs. In the case of accountants, they must be acknowledged by the Mexican Institute of Public Accountants.
The most important aspect to consider the fiscal agent will be held liable for the client’s inaccurate VAT reporting, missing deadlines, and unpaid taxes. Legally speaking, the fiscal representative must pay the VAT due if it is not paid by the taxpayer.
The appointment of a Mexican fiscal representative is accomplished by means of a formal contract that needs to be delivered to the local tax authority.
You can obtain more information on this service from our local specialists.
Tax-related activities that can be completed by a Mexican fiscal agent
The main reason to appoint a fiscal representative in Mexico is related to ensuring VAT obligations are complied with. For this purpose, among the responsibilities of a tax agent are:
- registration for VAT purposes;
- ensuring compliance with reference to currency rates, VAT rate application, VAT returns, and invoicing;
- creating and submitting VAT returns and any other paperwork that may be requested by the authorities;
- maintaining documents in accordance with the regulations and specifications provided by the Mexican state;
- paying any fines, penalties, or other charges related to the import of products.
Since we mentioned import activities, it is useful to note that a fiscal representative can also handle various import/export procedures, considering VAT is imposed for such activities.
Some of the operations that can be administered by a Mexican tax agent include:
- import-related activities, such as the preparation of customs declarations;
- export-related compliance activities;
- support to foreign digital services providers who market their products in Mexico.
Mexican authorities require that overseas suppliers or intermediaries to register with the tax authorities. They must choose a fiscal representative who resides in Mexico in order to facilitate filings. Monthly filing of returns and transaction data is also necessary for such traders.
Please note that foreign companies with no permanent establishments in Mexico must also appoint legal representatives in accordance with a recent change in the Company Law. For this and other compliance requirements, you can address our law firm in Mexico. Our lawyers can also advise if you move and want to obtain residency or citizenship in Mexico.
VAT filing requirements in Mexico
Considering the main role of a fiscal representative is to handle VAT compliance requirements, here are the main aspects to consider about this tax:
- VAT filings must be submitted monthly; the deadline is the 17th of the following month for the current payment;
- failing to submit VAT returns in due time can lead to fines between 55% and 75% of the unpaid tax;
- for each unreported obligation, the amount that must be returned ranges from MXN 1,400.00 to MXN 17,370.00.
If you need fiscal representation services in Mexico, do not hesitate to get in touch with our local specialists. We can also assist in immigration to Mexico.