Mexican Expense Tax Compliance for Global Companies
At Axosnet, we understand that addressing tax challenges in Mexico expense management can be complex for global companies. When a global company expands its operations to Mexico, it faces these specific challenges related to policy parameterization in SAP Concur.
Some highlights that deserve attention are:
Value Added Tax (VAT): Mexico has a standard 16% VAT rate, but it is essential to be aware of variations, such as the reduced rate of 8% for border cities during the first quarter of 2019.
Special Taxes: Expenses such as hotels, gasoline and airfare or from trusted simplified regime suppliers, carry with them special taxes (ISH, IEPS, TUA, RESICO), each with specific configuration considerations in SAP Concur.
Tax Breakdown: The electronic invoice (CFDI) breaks down taxes, but it is crucial to understand how to capture this data in SAP Concur, especially for the correct calculation of VAT.
Expense Verification: Including the UUID and RFC of the XML invoice on each expense line is vital. The activation of the CFDI attachment function is done at the employee group level in the expense management tool. Additionally it is essential to add this information for electronic accounting purposes to the expense policy.
Deductibility: Deductibility varies and is applied in a specific manner; it can be implemented through bridge programs, middleware or BADIs, depending on the integration method selected.
In this context, SAP Integration Content Advisor (ICS) Business Add-Ins (BADIs) provide customized solutions to overcome these obstacles. These BADIs enable an efficient solution for expense verification by allowing the incorporation of the UUID and RFC of the XML invoice into each expense line. This functionality is essential to guarantee accuracy in the VAT calculation and ensure compliance with Mexican tax regulations.
At Axosnet, we are experts in SAP and SAP Concur solutions, and we are committed to helping global companies overcome tax challenges in Mexico. Our team has the expertise to customize SAP ICS BADIs, ensuring a smooth and efficient integration with SAP Concur.
We remain at your disposal to discuss how we can support your company in this process.