Mexican Tax Administration Service Continues International Trade Audits During COVID-19

Notwithstanding the health emergency caused by the COVID-19 pandemic, the Mexican Tax Administration Service (SAT) continues exercising its authority to conduct audit procedures on international trade operations.

The SAT has an objective of increasing tax collection, an activity that is considered essential, so audit procedures must continue to be carried out in accordance with the decree published on March 31, 2020.

The SAT is executing the above through its powers of verification, using mostly the cabinet reviews (i.e., document requests), the verification of goods in transport and customs clearance. The SAT commences cabinet reviews by issuing notifications through the tax mailbox, so it is essential to monitor the tax mailbox to avoid the expiration of deadlines.

Likewise, special attention should be paid by those involved in activities with companies under IMMEX programs, customs regimes, origin and undervaluation schemes, which since last year have become central audit objectives for the current administration of the SAT.¹

Considering the above scenario, it is highly recommended that companies implement preventive international trade audits that allow them to verify compliance with their tax and customs obligations.

These preventive audits will allow companies to identify irregularities that, if corrected before the SAT begins its review procedures, will be translated into significant economic savings for the company in question.

Holland & Knight has a team of lawyers who have extensive experience in international trade audits and are prepared to support your company through preventive audits as well as provide counsel in the event of a government audit.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

Notes

¹ On Nov. 30, 2019 the General Administrator of Foreign Trade Audits, Sylvia Ivette Saucedo Garza, during a conference organized by the Mexican Institute of International Trade Executives (IMECE by its acronym in Spanish) said that her administration would focus on auditing IMMEX companies (Annex 24 and Annex 31), customs regimes, origin and undervaluation schemes.