Transactions with entities that allegedly engage in “nonexistent transactions” represent a number of risks to companies. A provision under Mexican law grants authority to the tax administration to presume the nonexistence of certain transaction when the tax officials find that the subject business does not have assets, personnel, infrastructure, of the material capacity to provide services or to produce, market or deliver goods covered by receipts, or that such businesses cannot be located.
In such situations, the findings could result in the cancellation of the “digital stamp” (thereby precluding the issuance of digital tax receipts) or by the freezing of bank accounts or even criminal sanctions.
Read a 2017 report (Spanish) prepared by the KPMG member firm in Mexico
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