Richard Cornelisse

Mexico: Everything you need to know about electronic accounting records

In Audit Defense, BEPS, Business Strategy, internal audit, Processes and Controls, SAFT on 16/10/2015 at 5:22 pm

Flag_of_MexicoThe use of information and communication technologies has grown in popularity in recent years, particularly in the field of tax administration, as it has served as a tool to assist governments in their mission of attracting resources.

The effective usage of such resources makes this a matter of great importance for control processes, in which the cross-checking of information is determinant for the detection of transactions and activities which cause tax base erosion.

The topic of filing electronic accounting records in Mexico was raised since the tax reform, and was materialised through article 28 of the 2014 Federal Tax Code. At first sight it might seem like just another requirement. However, it is necessary to consider that the accounting records cover a wide range of (complex) information, especially considering the specific characteristics that the Tax Administration Service has been requiring from taxpayers through several modifications to the Temporary Resolutions.

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The requirement for submitting electronic accounting records will provide the Mexican tax authorities enough information about a taxpayer’s situation and activities; however, it will be also necessary to develop mechanisms that protect the proper use of this information in order to perform more efficient procedures.

It is important to mention the administrative burden that this new requirement represents for corporations, though this should result in a future benefit, as it will ensure transparency in the information exchange between taxpayers and tax authorities.

Through the establishment of requirements such as the filing of electronic accounting records, Mexico has positioned itself as a leader in the field of electronic procedures for tax purposes. Such measures have also demonstrated that Mexico is aligned with worldwide concerns, such as the OECD-led fight against base erosion and profit shifting (BEPS) and the problems for aggressive tax practices and governments’ lack of information. Read more: Mexico: Everything you need to know about electronic accounting records | International Tax Review

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