Generally, Mexican taxpayers are required to issue a CFDI for their acts, duties, income, or tax retentions. The so called CFDI is an acronym for Comprobante Fiscal Digital por Internet , and some refer to it as the electronic invoice. It is issued to taxpayers through the Mexican Revenue and Tax Authority (SAT-Servicio de Administracion Tributaria) website. However, the CFDI is not an ordinary invoice; instead it is an invoice with legal and tax effects that allows the government to control, investigate, and supervise acts, duties, income, or tax retentions at the same time it is issued. The CFDI is a complex document which involves high level expertise to complete. It includes safety technical standards that guarantee its authenticity and help identify certain data, such as the type of transaction, the taxpayer that issued it, the recipient of the CFDI, place and date of issuance, type of goods/merchandise or services covered, quantity, unit of measure, and the sequence number and digital seal, among other data elements.
On December 29, 2020, the Mexican government amended the Mexican regulations to require taxpayers transporting merchandise within the Mexican territory to incorporate the CFDI “Complemento Carta Porte” (waybill complement). This waybill complement includes information related to the merchandise, involved parties, point of pick up and destination, and means of transportation (land, railroad, sea, air), among others.
The requirements to complete and prepare a waybill complement may vary depending on the type of goods, especially if they are from the hydrocarbon, petroleum, or petrochemical industry, and if the taxpayer is the owner, intermediate party, transportation agency, freight forwarder, etc.
There are over 185 blocks to select and fill out when completing the waybill complement. The blocks include information regarding the type of transportation, total distances, point of pick up, point of destination, sender/recipient and their contact and tax information, and a description of the merchandise, including weight, size, number of pieces, value, classification code, currency, type of transportation, containers, vehicle plates, government permits, insurance, etc.
This new requirement was supposed to become effective starting June 2021. However, some companies and organizations expressed their concerns and approached SAT to discuss the need for more transparent, clear regulations, and additional time to train their personnel and change their database systems for compliance. In addition, some were not sure how to correctly produce the waybill because they found SAT’s instructions to be vague or they fail to address the specific situation or condition of their operations. Others consider this to be a burdensome requirement given all the other documents needed for each shipment, (i.e., the invoice and the pedimento (Mexican entry summary form)) such that the instructions and information applicable to the waybill are lengthy and require duplicated efforts.
As a result of these lobbying efforts, SAT agreed to postpone the waybill obligation and stated that there would be a time frame for voluntary compliance starting December 1, 2021, but companies must be in full compliance no later than January 1, 2022.
Moreover, on November 12, 2021, the Mexican government amended the Mexican Fiscal Code to state that that anyone transporting merchandise or goods without the waybill would be sanctioned and investigated for contraband.
On November 30, 2021, the Camara de Diputado Federales (Federal House of Representatives) urged SAT to postpone the application of this requirement for at least 60 days, and to provide clarification on the waybill requirements so that companies could have more time to ensure compliance.
All this has, of course, resulted in legal and administrative uncertainty for companies doing business in Mexico. Consequently, businesses are being affected adversely since the instructions are vague at best. The only thing for sure is that this situation will continue during the following days, if not months, so we are in a “wait and see” mode. Hopefully, it will not substantially affect how you do business in Mexico.
Source: Brenda Cordova (Braumiller Law Group)
SYMBIOSIS is actively advising Canadian companies with operations in Mexico on all aspects of the broad Legal Compliance and Corporate Governance. We are tracking developments and are available to assist foreign investors with questions about Mexico’s legal framework and strict compliance options. For further information please contact us, the lawyers and partners of Symbiosis are ready to work together with you analysing the impact of this criterion on your company’s operations in Mexico, as well as in any regularization activity.
