Tax Audits
Tax Audits
The ongoing dynamism of tax legislation in Mexico means that organisations must always make sure that they are meeting the tax and fiscal provisions that apply to them, whether with regard to federal or state taxation or social security dues. The main purpose of tax audits is, on a selective basis, to ensure that tax legislation is being complied with, by an independent public accountant, whether internal or legal, issuing an opinion that includes any contingencies and opportunities for improvement found, so that the tax burden and social security payments of the organisation may be balanced properly in compliance with tax legislation.
Federal tax audits may be conducted for internal purposes (without raising an auditor’s certificate for tax purposes to be submitted to the tax authorities) or for third parties (including the tax authorities) and/or for legal purposes.
Certificates for tax purposes are raised by independent public accountants authorized by the tax authorities, by means of a report on the tax situation of the taxpayer and a certificate for tax purposes [sic].
The services we provide are based on our broad experience in auditors’ certificates for tax purposes, whether the organisation is not required to provide one, in which case the audit will be internal, or whether the audit is for legal purposes, in which case we will raise the auditor’s certificate and submit it to the tax authorities, which is currently optional for those organisations that meet certain requirements.
The increase in government oversight and audits is not just confined to the federal authorities; more and more state governments are making it obligatory to submit an auditor’s certificate for the purpose of state taxation, mainly with regard to the payment of salaries and payroll of workers who work in the state, even when the tax and legal address of the organisation in question is in another state.
It is becoming more and more common that these certificates are raised and submitted over the Internet. The purpose of state tax audits is to ensure that state tax laws are adhered to, mainly with regard to payroll tax, by an authorized public accountant raising a certificate for state tax purposes.
Organisations and persons that hire staff are required to pay social security dues and are subject to official inspections and audits, which is becoming more and more common in Mexico.
In line with government policy of providing social security coverage and respectable housing, the Mexican Social Security Institute (IMSS, initials in Spanish) and the National Workers Housing Fund Institute (INFONAVIT, acronym in Spanish) have set up procedures for authorized third parties to provide an auditor’s certificate for the purpose of the IMSS and the INFONAVIT, which is becoming more and more systemized.
In view of this, correctly calculating the daily wage and, therefore, the basis for calculation and payment of dues, becomes particularly important, taking into account the many variables that may be passed on from one organisation to another as function of benefits granted.
Bearing this situation in mind, we provide an audit service for the purpose of the IMSS and the INFONAVIT conducted by an authorised public accountant, which includes any contingencies found, along with any control weaknesses with regard to complying with social security laws.