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Sunday December 17 2017
A Factura: The Official Tax Deductible Document
James Glover

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A factura is the legal receipt given for goods and services in Mexico that can be used for business expenses or for deductions in Mexico businesses. The receipts you receive from most vendors are not facturas but “Nota De Remission” (a simple receipt). You must generally ask for and or go to a special office, window (caja) or cashier to receive the official receipt known as a factura. You will have to provide your company’s address, legal corporation name and tax identification number which is called a RFC or Registro Federal de Contribuyente.

A factura must include a copy of the sellers “cedula” or tax seal with their RFC number, their company address and phone number. When filled out correctly it must also have the items purchased, prices in pesos and the sales tax (IVA) separately included with the grand total amount also written out in letters on the factura.

To obtain a RFC number, you must apply wherever you will be doing business at the local Secretaria de Hacienda y Crédito Publico (SCHP). “Hacienda” as it is more commonly referred to here in Mexico is the equivalent to the U.S. Internal Revenue Service. Whether you are doing business as a corporation or a sole proprietorship (use of personal RFC) you must have an RFC number as well as a personal one for filing your personal income tax here in Mexico.

The IVA is 10% on all goods and services in Baja California and Baja California Sur and is 15% for all the rest of Mexico. This is one of the few remaining advantages that Baja California has had since it was given a special status of a “Free Zone” many years ago. There had been talk by President Fox to reduce all Federal Sales Tax to 10% throughout all of Mexico, but has not occurred. The Mexican government and banks are very picky about their forms being complete and with no corrections.

Facturas are printed in series and all facturas must be accounted for even if they have been voided, cancelled or lost. You must be sure to save or recover all copies of a factura before it will be accepted by Hacienda as cancelled. What is so important about the factura is that these are the only receipts accepted for your business expenses. In other words if you don’t have a factura for it, then the expense does not go on the books.

For example when you buy gas and want to deduct it as a business expense you must obtain a factura and not just a sales receipt or nota de venta as it is called. In your business, you are required to create a factura for every sale you have or you may make a general one for cash receipts for the day. If you do not create a factura, then the money will not be properly accounted for and Hacienda will be interested in why you are not making any income.

While most tourists, retirees and even a lot of the Mexicans are not interested in obtaining a factura as they have no need or desire to deduct these expenses, you must still write or print out a factura if it is going to be accounted for. One trick you will see a lot in Mexico is the “we won’t charge you sales tax if you don’t want a factura”. This “discount” is not exactly something Hacienda will look kindly upon if it finds out about it. This is the way people do business under the table in cash but of course the law states that the 10% is to be charged on all goods and services.

You must be careful when getting a quote on goods or services because many times the IVA has not been included in your total and when you ask for a factura, the business will then say you must pay an additional 10% to obtain a factura. This of course was never to be an option according to Hacienda. The way to avoid any hassles is be sure to tell the business that you do want a factura for your business expense and the bill will include all taxes and no surprises.

Also, as stated above, the IVA must be collected and included on every factura, and you must then pay that 10% to the government every two months. So don’t forget that on every sale or service you bill for, you will be liable to pay Hacienda for the IVA you have collected. In addition, if you are importing goods then you must pay 10% IVA (Baja California) on the wholesale value at the time of importation. Then, when you sell the item, you owe the remaining difference between the 10% of wholesale that you already paid and the 10% of retail that you have now received. This means that you are pre-paying part of the sales tax at the time of importation.

As you can see, there are many intricacies in the Mexican taxation system. Be sure to consult a Mexican tax advisor or accountant before moving to and establishing a business in Mexico.


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