Table of Contents
Introduction
Among the multiple problems that may arise for taxpayers doing business in Mexico who, in accordance with federal tax regulations, are required to keep accounting books or records are cases of disabling, destruction, loss, or theft of accounting books or documents.
Either because the accounting document became illegible, was destroyed—due to an accident or by a person other than the taxpayer—, lost, or worse yet, was stolen; as a taxpayer, you must act promptly because the period to notify the Tax Administration System (Servicio de Administración Tributaria or SAT) of any of the above events is very short.
The obligation to present a notice when the hypotheses mentioned happened is implicitly derived from articles 30 of the Federal Tax Code and 35 of the Regulations of the Federal Tax Code[1]. However, it is not until the publication of General Rule 2.8.1.16[2] of the Miscellaneous Tax Resolution for 2024 and its Annex 1-A under format 271/CFF that the scope of the notice becomes clearer.
Finally, there should be no doubt that the notice is necessary if you want to prevent the tax authority from imposing sanctions on you in exercising its verification powers or even imposing tax liabilities for omitted contributions just because you have lost accounting documents that you know existed and of which you did not warn of their replacement.
Procedure
- The notice must be submitted fifteen business days after the events of disablement, destruction, loss, or theft of the accounting books or records occurred.
- The procedure is entirely free and can be submitted by individuals and legal entities that serve as taxpayers of federal contributions, either by themselves or through their legal representatives.
- The procedure must be carried out physically before the Central Administration of Planning and Programming of Supervision of Large Taxpayers through the General Administration of Large Taxpayers. In some cases, before the Central Administration of Planning and Programming of Hydrocarbons, of the General Administration of Hydrocarbons. Both offices have residences in Mexico City.
- On the other hand, if the previous administrations do not have jurisdiction over you as a taxpayer, you must go to the local Tax Administration Service office that corresponds to you. In most cases, knowing which one corresponds will depend on the state of the republic in which your tax abode or domicile is located.
Requirements
- The main requirement of this procedure is to prepare a free writing addressed to the corresponding authority where you narrate and detail the facts that give rise to the presentation of the notice. Finally, you must state under oath that your information is accurate.
On this point, you must be very careful when writing the letter because you practically have to inform the tax authority what you will replace. You can obtain the information based on the accounting documents with which you calculated the tax base in your returns.
- Another requirement is to accompany a public document stating the facts that motivate the presentation of the notice. The facts will depend on the case for which you present it, whether it is due to disablement, destruction, loss, or theft (public document such as a criminal complaint [in case of theft], notary public’s act, etc.)
- As I stated, regarding theft or destruction of accounting systems or records by a third party, it is enough to report the facts to the Attorney General of Mexico (prosecutors) for you to comply with this requirement. Report of facts that must be done in terms of articles 92, section I, 100, and 111, section III of the Federal Tax Code (requires the authorization of the Ministry of Finance and Public Credit to proceed with the criminal case against the third party)
- Finally, whatever the public document with which you accompany your free writing for the presentation of the notice due to the disuse, destruction, loss, or theft of accounting records, consider that you must keep a copy of the document until the verification powers of the tax authorities extinguish, pursuant to article 35 of the Regulations of the Federal Tax Code referred above.
Consequences
The main effect is that from the date of presentation of the notice, you, as a taxpayer, shall have four non-extendable months to replace the illegible accounting entries or, where appropriate, enter the relative entries derived from the new accounting books or records of disablement, destruction, loss, or theft.
On the other hand, once these four months have passed, the Tax Administration System shall not be obliged to issue any resolution in this regard. Its competence is limited to verifying, prior to having submitted the notice, that the requirements for its presentation were met within the period of fifteen business days already mentioned.
Finally, the Tax Administration System does not have to carry out an inspection to have the notice presented. However, the obligation to give notice to the authority about the destruction or loss of the accounting records does not limit the authority to exercise its general verification powers contemplated in the Federal Tax Code.
By Omar Gómez
Partner
Mexican tax and administrative attorney
Belegal abogados S.C
Abogados en Ciudad Juárez, Chihuahua, México
Contact me at [email protected]
Visit my personal website at www.ogomezabogado.com
Contact the firm: [email protected] or call (656) 774-75-73 for English assistance or (656) 271-41-43 for Spanish assistance.
[1] Article 35.- For the purposes of article 30 of the Code [Federal Tax Code], when the books or other records of taxpayer’s accounting records become partially unusable, they shall be redone by concentration, at least of the last tax season. When it comes to the destruction or disabling total of the books or other accounting records, the taxpayer must enter in the new books or in the accounting records in question, the entries relating to the year in which the disabling, destruction, loss or theft, which may be carried out by concentration.
In the cases referred to in this article, the taxpayer must keep, where appropriate, the
public document that records the events that occurred until the powers of veritifaction of the tax authorities [audits] are extinguished.
[2] 2.8.1.16 Deadline to Replace Accounting Records That Have Been Destroyed or Made Useless
For the purposes of what is stated in articles 30 of the CFF and 35 of its Regulations, when
the books or other accounting records are rendered useless or destroyed totally or partially, the taxpayer must notify the tax authority in accordance with the processing form 271/CFF Notice for the disablement, destruction, loss or theft of books or records accounting, contained in Annex 1-A.
The taxpayer shall have a period of four months from the date on which present the notice referred to in the previous paragraph, to replace the illegible entries of the last tax season or, where appropriate, enter in the new books or accounting records in question, the entries relating to the year in which the disablement occurred, destruction, loss or theft, which can be carried out by concentration.