Last Update: March 7, 2024
In Mexico, all corporations are required to file an annual tax return within the first three months of the year for the previous fiscal year (January – December). The deadline is April 1st.
In the annual return, your accountant will determine:
- Income and deductible expenses for the corresponding fiscal year
- Taxes Due
- Profit or Loss
- The workers’ participation payment based on the final profit
When the return is electronically filed on the Tax Administration Service (SAT) web page, it will already have pre-determined information as a result of the provisional payments made throughout the previous year, as well as the payroll CFDI’s that the legal entity issued.
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If the pre-determined information does not match the end-of-year reports created by the accountant, the legal entity may submit additional information to amend the monthly returns, and the updates take approximately 24 hours to appear.
Once the return has been prepared, it is important to complete a final review, if the amounts agree with the supporting documentation, the annual return can be sent electronically using the corporation’s E-firma (digital signature).
Other items included in annual filings:
- Income statement: Income that is received in cash (either local or foreign currency) for loans, contributions for future capital increases or decreases that are greater than $600,000 must be reported to the tax authorities within fifteen days of receiving the amount.
- Taxable income is income received in cash, goods, services, credits, or any other income obtained during the fiscal year are considered.
- To be considered as income, the transaction must comply with certain requirements, including:
- An electronic tax receipt (factura) must be issued and should correctly identify the:
- Method/form of payment
- The goods or services provided
- Total agreed price must be collected (paid in a single payment or installments).
- An electronic tax receipt (factura) must be issued and should correctly identify the:
- Balance Sheet: It should be noted that the balance sheet should compare the 2023 data with the 2022 data any substantial variation should be accompanied by an explanation to clarify the variation.
- Profit and loss (P&L) statement: a financial statement that summarizes the income, costs, and expenses during the fiscal year. Provides a summary of whether the company experienced financial losses or profit.
- Cash flow statement: a basic financial statement showing the cash inflows and outflows of a company without inflationary adjustment. Required to identify the origin and destination of the cash.
- Statement of changes in equity: identifies changes in the investment of the shareholders or owners during the period to be reported.
- Annual cumulative inflation adjustment: All corporations under the general legal regime must determine their annual adjustment for inflation, which is calculated based on the annual balance of debts and the annual balance of credits.
- There are 2 types of adjustments, which are cumulative and deductible, these will be determined as follows:
- If the average annual balance of debts is greater than the average annual balance of credits, the difference will be multiplied by the annual adjustment factor and the final result will be the cumulative annual inflation adjustment.
- If the average annual balance of credits is greater than the average annual balance of debts, the difference will be multiplied by the annual adjustment factor and the final result will be the deductible annual inflation adjustment.
- There are 2 types of adjustments, which are cumulative and deductible, these will be determined as follows:
At the time of preparing an annual tax return, if the taxable income is less than the deductions, a tax loss for the year will be reflected, which may reduce the taxable income only in the following 10 years or until it is zero.
Contact a Professional
If your corporation needs assistance with filing your annual return or you have questions regarding Mexican tax law and requirements, please contact Mextax today. Our team of experienced and professional accountants can effectively serve any size corporation.
