In September 2013, the Mexican Congress amended the Federal Tax Code to allow the authorities to publish the name, denomination or corporate name and the Federal Taxpayers Registry Number (RFC) of individuals with whom it is risky to enter into commercial or commercial transactions because they do not comply with their tax obligations.
On January 1, 2014, the Tax Administration Service (SAT) published a "List of Non-Compliant Taxpayers" based on a constitutional reform to make tax revenues transparent. Specifically, Articles 69 and 69B were reformed.
¿What are EFOS and EDOS (Fiscal Acronyms)?
EFOS: Simulated Transaction Invoicing Company.
These companies simulate transactions of sale of products or services without these being real, they do not have assets, personnel, or physical infrastructure, they open bank accounts and cancel them soon. They have high invoicing amounts and few or no expenses, they are untraceable since they are not located in the tax domicile.
EDOS: Companies that Deduct Simulated Operations.
They are in charge of accounting the transactions generated by the EFOS in order to simulate a record of expenses of non-existent operations and avoid paying taxes to the authorities.
Article 69 of the CFF
This is the SAT's tool to nullify the effects of operating with companies that carry out non-existent activities, "The SAT's Black List".
Within the paragraphs referring to the aforementioned article, reference is made to tax evasion through simulated operations, where the latter term is used to refer to companies that simulate sales transactions of products or services without these being real.
Status of Article 69 of the CFF
Not Located:
Those taxpayers who were sought at their tax domicile for any official diligence and were not found by officials.
Firm Tax Credits:
a tax credit is obtained when the taxpayer deducts more than he/she earns. The state may reclaim such income and if the taxpayer does not appeal then a firm tax credit is earned.
Enforceable, Unpaid or Secured Credits:
Firm tax credits that were not paid in a timely manner by the taxpayer.
Cancelled Credits:
The tax authority may cancel the credit if the collection process is unaffordable or the debtor has no money to pay. See article 146-A
Credits Forgiven:
The income law of each year provides for the possibility of total or partial forgiveness of tax credits, compensatory fees, updates and fines related to federal contributions.
Convicted Sentence for the Commission of a Tax Offense:
Offenders and violators of the tax code and applicable rules.
Article 69-B of the CFF
When the tax authority detects that a taxpayer has been issuing vouchers without having the assets, personnel, infrastructure or material capacity, directly or indirectly, to provide the services or produce, market or deliver the goods covered by such vouchers, or that such taxpayers are not located, it will be presumed that the transactions covered by such vouchers are non-existent.
In this case, it will proceed to notify the taxpayers that are in such situation through the tax mailbox of the tax administration service website, as well as through publication in the official journal of the federation.
Status of Article 69-B of the CFF
Presumed:
When the tax authority detects that a taxpayer has been issuing vouchers in an irregular manner, the non-existence of the transactions covered by such vouchers will be presumed.
Distorted:
When the taxpayer provides the tax authority with the documentation and information that they consider pertinent to disprove the facts that led to notify them with a term of fifteen days counted from the last of the notifications that have been made.
Definitive:
If the taxpayer does not attend the call of the authority within fifteen days from the last of the notifications or the taxpayer cannot disprove the existence of its operations this status is published.
Favorable Judgment:
The taxpayer has thirty days to prove that its operations are real, if it manages to correct its situation this status is published.
Current Situation of Simulated Operations.
Derived from acts of investigation and cross-checking of information between the tax administration service (SAT), the financial intelligence unit (UIF) and the Mexican social security institute (IMSS), the federal tax office (PFF) announced on Tuesday that it will go after companies that issue false invoices in order to pay less taxes.
In fiscal year 2017, due to the sale of these invoices and the operation of 43 invoicing companies, $55,125 million pesos (mdp) stopped coming in as contributions to the treasury, informed the head of the SAT, Raquel Buenrostro.
List of Taxpayers under Article 69 of the Federal Tax Code:
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