Mexico

Implementation of mandatory e-invoicing in Mexico

• 2011: Large taxpayers were required to issue XML invoices validated by certified providers (PACs).
• 2014: E-invoicing became mandatory for all businesses. Paper invoices were fully replaced by electronic ones.
• 2023: CFDI 4.0 introduced a new XML format, required tax ID of recipients, and stricter validations. The update became fully mandatory in April 2023.

Who needs e-invoices in Mexico?

•  Large Enterprises: Businesses with revenue exceeding MXN 4 million (approximately €200,000) are required to comply.
• SMEs: Gradually included since 2014 based on revenue thresholds.
• Exporters: E-invoicing is mandatory for export transactions, ensuring compliance with SAT and international standards.
• Non-Resident Businesses: Required to issue CFDIs for transactions with Mexican entities.

E-Invoicing vs. E-Billing

Key features of the Mexico’ e-invoicing system

• Submission Platform: Invoices must be submitted via PACs in CFDI XML format.
• Validation: PAC validates compliance and issues a digital stamp.
• Archiving: Digital storage for 5 years is mandatory for audit purposes.

E-Invoicing dataset

• Buyer/Seller IDs: Federal Taxpayer Registry (RFC) numbers.
• Invoice Details: Invoice number, issue date, and payment terms.
• Goods/Services: Descriptions, quantities, unit prices, and VAT details.
• Taxes: Applicable VAT rates and amounts.
• Transaction Info: Total payable amount, payment method, and fiscal purpose.
• Digital Stamp: Issued by the PAC to validate the invoice.

E-invoicing across transaction types

•  E-invoices are mandatory for all B2B transactions.
• The CFDI system ensures compliance with VAT reporting and facilitates input tax credit claims.

• Businesses must issue simplified CFDIs to individual consumers, including details of the transaction and applicable taxes.
• Simplified receipts include a QR code for verification.

• Mandatory for businesses transacting with government entities to ensure transparency and adherence to procurement regulations.

Penalties for non-compliance

• Fines: MXN 12,000–70,000 (€600–€3,500) per violation.
• Operational Risks: Rejected invoices may delay payments and disrupt operations.
• Legal Risks: Repeated violations may lead to audits, suspension of tax certificates, or reputational damage.