In the journey of the entrepreneur or businessman, at the moment of formalizing the relationship with the governmental tax authorities (the State) whether he is an individual with business activity or a legal entity, he acquires -whether we want or not- tax obligations and the State is empowered to monitor compliance with these obligations.
Tax authorities in Mexico, such as the
Ministry of Finance and Public Credit
Tax Administration Service (SAT), among others
(SAT), among others, will exercise their powers of verification, but always observing the formalities set forth in the tax laws.
They have powers to verify the effective compliance of taxpayers with their tax obligations, one of the main powers they have is the so-called home visit.
The action of the domiciliary visit is that the competent authority in terms of subject matter and territory goes to the taxpayer’s tax domicile and requests data, reports and/or documents related to compliance with tax obligations.
This can be somewhat uncomfortable for those to whom it applies, which is why the authority is obliged to comply with the formalities regulated in the Federal Tax Code.
If this is your case!
We share with you the 5 highlights that every home visit must comply with:
- The tax authority will go to the address indicated by the taxpayer for tax purposes and will request the presence of the legal representative. If the legal representative is not present, the authority must leave a summons to wait for him/her the following day at a specific time.
Note: The law states that in the event that the taxpayer ignores the subpoena, the proceeding will be attended by whoever is at the place visited.
- The authority will begin with a visit order, which must be in writing or in a digital printed document, where it will be indicated: the authority issuing the act, the place and date of issuance, the place or places where the visit will be carried out, the name of the persons who will carry out the visit, and it must be duly founded and motivated with the autograph signature of the competent official; upon arrival the visitors must identify themselves with the person to be attended, and they will be asked to appoint two witnesses, drawing up a minute of the facts or omissions known to the visitors.
- For each action carried out by the tax authority in the course of the home visit, it must prepare partial or complementary reports in which it will also record the facts, omissions or specific circumstances of which it is aware.
- The authority must prepare a last partial report where it will resolve the facts, omissions or concrete situations known during the entire procedure of the visit, but it will not be until the preparation of the final report that the authority will be able to make an assessment of the same. For the preparation of the final report, the same formalities as for the visitation order must be followed.
Note: Once the final report has been completed, no more partial or complementary reports may be taken.
- In the event that the tax authorities, in exercising their verification powers, become aware of facts or omissions that imply noncompliance with the tax provisions, they will determine the omitted taxes through a resolution and the taxpayer will be notified personally.
It should be noted that the authority must conclude the domiciliary visit within a maximum period of twelve months from the date the taxpayers are notified of the initiation of the verification powers, and it has a maximum period of six months to issue a resolution to determine the omitted taxes from the date the final report of the visit is issued.