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Mexico’s Payment Receipt Complement: Are You Ready for it?

Posted on October 19, 2018 by

Tim Finerty

Tim Finerty

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The Mexican government has become more concerned over reconciling invoices and payments in recent years, resulting in new legislation requiring a “payment receipt complement” for commercial transactions between a buyer and a seller requiring transactions to be paid in installments. This document is electronically generated, transmitted and encrypted for added security. It commits the seller to deliver the service or product, and the buyer to make the payment according to what is specified.

Starting November 1, 2018 the Mexican tax authority will begin enforcing the use of a payment complement along with the electronic receipt, attached to the defined standards by the Servicio de Administración Tributaria (SAT). As such, every payment now needs to be tied to the electronic invoice for each transaction. This protocol used to be optional and was not used by most companies. Mexico made this practice mandatory in attempt to improve poor business practices and ensure higher quality procedures and reporting, according to SAT.

How does it work?
The payment receipt complement should be incorporated to the electronic receipt issued in the reception of partial or full payments. Proof of payment goes to SAT, and to the buyer, each time a payment is made.

Despite the numerous requests for an extension to this process, the SAT has finally approved the November 1, 2018 start date. Therefore, it is essential that the information received by the taxpayers be precise to avoid penalties.

To meet this new requirement on the fiscal payment processes, technology plays a key role. Some company ERP systems may be subject to adjustments, for example, or may require external suppliers to help generate the payment receipt complement with efficiency and security. It will be critical to adapt an ERP systems that complies with new regulation.

A few of the advantages of the new payment receipt complement include:

  • No false duplication for income when payments are made in installments
  • Cancellation of invoices
  • Payments made towards the end of the year will be known, making it easier to account for an expense
  • Payments will be automatic and will lead to less errors

To learn more, contact Clayton & McKervey.

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Tim Finerty

Shareholder, Industrial Automation

Tim provides tax, accounting and consulting support to help industrial automation companies maximize profitability.

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