Mexico (Pymnt): Overview

Overview of the Mandate

Mexico has enforced mandatory electronic invoicing, known in Mexico as "Comprobante Fiscal Digital por Internet (CFDI)" since 2011, making it one of the most advanced fiscal digitalization programs in the world. Regulated by the Servicio de Administración Tributaria (SAT), the system requires real-time issuance, certification, and reporting of all taxable transactions using standardized XML documents.

Who is Affected?

• Domestic companies (Personas Morales)
• Sole proprietors / freelancers (Personas Físicas)
• Foreign companies with a Mexican RFC
• Employers (for payroll)
• Retailers and transporters
• Exporters and importers

There are no revenue thresholds or exemptions: all registered taxpayers must comply.

How the CFDI Process Works

1. Data Generation: Invoice data is created in the ERP/accounting system.
2. XML Transformation: Data is mapped into CFDI 4.0 format as per Anexo 20.
3. Digital Signing: The issuer applies their CSD (Certificado de Sello Digital).
4. Certification by PAC: A PAC (Proveedor Autorizado de Certificación) validates the XML, assigns a UUID, and applies the Timbre Fiscal Digital.
5. SAT Submission: The PAC forwards the invoice to SAT in real time.
6. Distribution & Archiving: The certified CFDI is sent to the recipient and archived for 5+ years in compliance with NOM-151.

Description

CFDI (Comprobante Fiscal Digital por Internet/Digital Tax Receipt via Internet) is the name given to the electronic invoice in Mexico. There are different types of CFDIs:

• CFDI de Ingreso (Income CFDI - "I"): Used for services, sales, leases, or fees, showing a taxpayer's income.
• CFDI de Egreso (Expense CFDI - "E"): Issued for returns, refunds, or cancellation of an Income CFDI, documenting money outflows.
• CFDI de Traslado "T" (Transportation): Verifies the legality of goods being transported.
• CFDI de Nómina "N" (Payroll): Employer must issue this for employee payments, detailing wages, deductions, and benefits.
• CFDI de Recepción de Pagos "P" (Payment Reception): Issued for payments made in installments.
• CFDI de Retención e Información de Pagos (Withholding CFDI): Documents tax withholdings and certain payments.

This documentation describes the specific requirements to prepare a VRBL Payment to cover CFDI de Recepción de Pagos "P" (Payment Reception).

Use case: The invoice issuer/payee (Seller) reports received payments, based on invoices, that were facilitated by the invoice receiver/payer (Buyer)

• Document issuer: Invoice Issuer (Seller)
• Document receiver: MX Tax Authorities (SAT)

Details