Do you truly know your suppliers?
Before the SAT authorities and according to the Mexican Federal Tax Code, a company that issues simulated or inexistent invoices receives the name of EFOS in Spanish. Detecting in time if a supplier fits this category can help you take the necessary action in order to prevent unwanted aftermath, as you should revoke tax effects from all the invoices that the supplier has issued and paid the corresponding tax at the risk of facing fiscal and legal consequences.
Terán Rojas & Associates offers a tool to detect if one of your suppliers in under the EFOS category.
Simulated Transactions and the EFOS
Nowadays, one of the deductions that the fiscal authorities (SAT) judges with more sternness, is the payment for professional services, since, under their criteria, it is a common mechanism for tax evasion, used to issue or deduct invoices paid to a “supplier of services” when there is no evidence of a service being provided, or the price they issued was way higher to the market value or the supplier that supposedly provided the service does not have the necessary infrastructure to provide it.
As a first step, the authorities, during their tax reviews, are requiring the taxpayers to provide evidence of the service given, asking to show the documents they received in exchange of the payment given for that service. It should be mentioned that it is no longer enough to have a contract, an invoice and the payment that meet the tax requirements, but the authorities that monitor it being a strictly necessary expense, are requiring it to be evidenced through a report, a briefing, or a study of the service that has been received in exchange of payment.
C.P.C. | L.D. Gabriela Rojas
Terán Rojas & Associates.