1. What is the current legal landscape for Tax in your jurisdiction?

Throughout 2026, Mexico has kept the general Income Tax (“IT”) and Value Added Tax (“VAT”) rates unchanged. However, the tax landscape has continued to evolve through stronger audit and collection powers, greater digital oversight of taxpayers and transactions, changes affecting tax controversy, and new or expanded tax incentives, programs and measures aimed at regularization, capital repatriation and investment. At the same time, international tax developments continue to shape the way multinational groups assess their operations and investments in Mexico.

The most significant change this year, in our view, is the tax authorities’ new power to verify false Digital Tax Invoices (“CFDIs”) and the consequences associated with their issuance and use. Under the Federal Tax Code (“FTC”), CFDIs must support existing, genuine transactions or actual legal acts; otherwise, they are deemed false with all the implications that this entails under the FTC.

Consistent with the above, the FTC establishes a specific on-site audit that must be completed within 24 business days and suspends the taxpayer’s ability to issue CFDIs while it is pending. If the presumption is not rebutted, the CFDIs produce no tax effects and the issuer’s Digital Seal Certificate (“CSD”) is canceled. The foregoing can effectively bring ordinary business operations to a halt, as the taxpayer can no longer issue CFDIs, while the corresponding administrative and judicial procedures are carried out. The recipients of such CFDIs have 30 calendar days from the corresponding publication in the Federal Official Gazette (“DOF”) to reverse any tax effects previously given to them or face temporary restriction of their own CSD. This procedure is already being used by the Tax Administration Service (“SAT”), making it a development to watch closely, particularly given its potential criminal-law implications.

Now, as of April 1, 2026, the FTC requires certain digital service providers (“Digital Platforms”) to give the SAT permanent, online and real-time access to specified transactional information for purposes of verifying compliance with their tax obligations. In practice, they must maintain a transactional database capable of individual and bulk processing and available to the tax authorities for 5 years, allowing the SAT to review transaction-level information without waiting for a traditional audit request. In turn, the Federal Revenue Law for Fiscal Year 2026 (“FRL 2026”) expanded the scope of IT and VAT withholding on transactions carried out through Digital Platforms that intermediate between third parties, particularly with respect to legal entities, and established higher withholding rates in certain cases, including where the Federal Taxpayer Registry (“RFC”) number is not provided.

Separately, the Special Tax on Production and Services (“Excise Tax”) took on greater weight as an extrafiscal policy tool. Its scope was expanded to other nicotine-containing products, the rate on games involving betting and raffles increased from 30% to 50%, including certain online activities by nonresidents without a permanent establishment in Mexico, and an 8% rate was introduced for certain violent, extreme or adult video games. However, a Decree published in the DOF on December 31, 2025 granted a 100% tax incentive for the latter, subject to certain conditions.

Regarding tax controversy matters, fiscal year 2026 materially changed the rules for guaranteeing tax assessments. At the beginning of this year, the FTC imposed a mandatory order of priority for the forms of guarantee, beginning with a cash deposit bond, which could require taxpayers to disburse at least 100% of the tax assessment. A Decree published in the DOF on April 9, 2026 restored taxpayers’ freedom to choose among the available forms. More importantly, the FTC eliminated the exemption from guaranteeing a tax assessment during an administrative appeal while the FRL 2026 generally gives taxpayers filing administrative appeals in 2026 up to 6 months thereafter to furnish the guarantee. In practical terms, the administrative appeal lost one of its historical advantages which allowed its filing without tying up funds or bearing the cost of a guarantee.

In parallel, the FRL 2026 introduced a new tax regularization incentive building on the program available in 2025, raising its revenue threshold from MXN $35 million to MXN $300 million, as well as a capital repatriation program. The regularization incentive allows reductions of up to 100% of fines, surcharges and enforcement expenses, without reducing the underlying federal taxes, government charges or countervailing duties, as applicable. For final tax assessments, filing the application suspends the administrative enforcement procedure without the need to guarantee the tax assessment. The capital repatriation program allows qualifying taxpayers to return or bring into Mexico lawful funds held abroad through September 8, 2025 by December 31, 2026, paying IT at a 15% rate on the total amount, without any deduction, provided the funds are invested and remain invested in Mexico for at least 3 years. Given the tax audits that followed a similar 2017 program, traceability and strict compliance remain key.

Last but not least, Mexico is a member of the Organisation for Economic Co-operation and Development (“OECD”) and participates in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, under which the Pillar Two Global Anti-Base Erosion (“GloBE”) Rules were agreed. However, as of August 2026, Mexico has not incorporated the GloBE Rules into domestic law and no timetable for their implementation has been announced. For in-scope multinational groups, generally those with consolidated revenue of at least EUR 750 million in at least 2 of the 4 immediately preceding fiscal years, GloBE seeks to ensure a minimum effective tax rate of 15% on a jurisdictional basis. Accordingly, if Mexico’s jurisdictional GloBE effective tax rate falls below 15%, Top-up Tax may arise and potentially be collected outside Mexico.

2. What three essential pieces of advice would you give to clients involved in Tax matters?

Our first recommendation would be to build the tax analysis into a transaction before it is agreed and implemented. In Mexico, this means considering from the design stage the business purpose requirement under Article 5-A of the FTC and, where applicable, whether the transaction falls within any reportable tax schemes under Articles 197 to 202 of the same FTC. In cross-border transactions, the analysis should not start with the withholding rate, but with who earns the income for tax purposes, whether it is attributable to a permanent establishment in Mexico and how it is characterized under the IT Law (experience has shown that the label used in the agreement does not necessarily resolve that characterization). Only then can one determine whether the income is from sources within Mexico, the IT arising under domestic law and whether a Tax Treaty for the Avoidance of Double Taxation (“DTT”) reduces or eliminates the withholding. Article 4 of the IT Law also requires proof of tax residence and compliance with the applicable domestic requirements, while, where relevant, beneficial ownership and the Principal Purpose Test (“PPT”) under Article 7 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”) must be reviewed. Addressing these issues after payment can be considerably more expensive, particularly where withholding should already have been made or the agreement allocates the economic cost of the tax to the Mexican resident payer.

Our second recommendation would be to build the supporting documentation contemporaneously with the transaction. In Mexico, an agreement or a CFDI does not, per se, establish the “materiality” of a transaction or entitlement to a deduction. “Materiality” has no standalone definition in tax law; the issue is evidentiary and requires proving the facts supporting the claimed tax treatment. For example, a transfer pricing study may support that an intragroup service complies with the arm’s-length principle, but not who rendered it or what was actually done. Jurisprudence 2a./J. 161/2019 (10a.) of the Second Chamber of the Supreme Court of Justice of the Nation also requires private documents provided during an audit to satisfy the “certain date” requirement to prove acts or transactions relied upon for tax purposes. Other requirements remain equally relevant: Articles 27, section V, and 76, section III, of the IT Law impose certain withholding, remittance, information-reporting, and CFDI requirements. Trying to gather the supporting evidence only after the SAT auditor has requested the information often leaves gaps that increase tax exposure and may be impossible to remedy.

Our third recommendation would be to assess the taxpayer’s specific tax risk profile before the SAT does. The SAT selects taxpayers for audit using, among other things, risk criteria and data cross-checks, while the effective IT rates published for large taxpayers serve as reference benchmarks. Falling below a sector benchmark does not ipso facto mean that IT has been underpaid or create a statutory minimum; the taxpayer should instead understand and document the reasons for the deviation before the SAT raises it.

3. What are the greatest threats and opportunities in Tax law in the next 12 months?

On the threat side, we believe the main risk over the next 12 months will be increasingly targeted and assertive tax audits rather than a broad-based increase in IT or VAT rates in 2027. According to data published by the Federal Government itself, the SAT now makes public the risk criteria it uses to select taxpayers and announced that, for 2026, it would audit 6.3% of the large taxpayer population, compared with only 0.02% of small and medium-sized taxpayers. In addition, official SAT figures show that tax enforcement remains highly profitable for such authority: in 2025, it recovered MXN $248 for every peso invested in audits. As long as that relationship holds, we see no reason for the strategy to change. The difference is that audits start less and less with a broad review to “see what turns up” and more with a pre-identified inconsistency, for example, in tax returns, CFDIs, third-party information or effective tax rates. Article 49 Bis of the FTC adds an especially sensitive element. As explained above, its consequences may affect the issuance of CFDIs. Precisely for that reason, there is a risk that the procedure could also end up being used as leverage to push the taxpayer to self-correct before it even has a chance to defend itself.

On the opportunity side, in addition to the tax regularization incentive and capital repatriation program under the FRL 2026 previously mentioned, other incentives can have a material impact on new investments in Mexico. The tax incentives applicable to the Economic Development Hubs for Well-Being established under Plan Mexico allow, subject to their requirements, 100% bonus depreciation for certain investments in new fixed assets and an additional deduction for certain training and innovation expenses; for their part, the tax incentives applicable to the Development Hubs for Well-Being of the Isthmus of Tehuantepec include 100% bonus depreciation for certain investments in new fixed assets and significant IT and VAT tax credits. These federal incentives may also be complemented by state and municipal benefits, including payroll tax incentives and, depending on the jurisdiction and project, relief from other local taxes, fees and permits. For a company considering investing in Mexico, the benefits granted by these incentives can make the project’s location materially relevant from a tax and financial perspective and should therefore be analyzed before the investment decision is made.

Another opportunity comes from the reform of federal administrative contentious procedure, particularly for certain tax refund disputes. Rulings issued by federal tax authorities in response to refund requests arising from tax credit balances or overpayments may now proceed under the summary track when the amount does not exceed 30 times the annual Unit of Measurement and Update (“UMA”) in effect when the ruling is issued (currently approx. MXN $1.28 million). Under the reform, a final judgment in summary proceedings must be issued within 6 months from admission of the claim, subject to the statutory grounds for suspending that period. For taxpayers with disputes within that threshold, this can materially improve the economics of pursuing a refund, as a more expedited proceeding reduces the risk that litigation costs and the time required to obtain a judgment consume a significant portion of the amount ultimately recovered.

4. How do you ensure high client satisfaction levels are maintained by your practice?

For us, client satisfaction depends on advice being clear, practical and delivered on time. A technically flawless legal opinion is not very helpful if, after reading it, the client still does not know what to do or if it only partially resolves the inquiry raised. That is why we first try to understand what the client wants to achieve, how its business works and what level of risk it is willing to take on. If we see a reasonably defensible position, we explain why; if something concerns us, we put it on the table; and if we believe an alternative does not work, we would rather say no and look for another way to achieve the desired result. In tax practice, this matters especially because there is rarely only one possible answer and, many times, the difference lies in the facts and in how much risk the client is willing to take on.

In the same vein, we try not to stop at the question our clients asked us. For instance, a client may ask about the deductibility of a payment and, once we take an end-to-end look at the transaction, the real issue may lie in how it was documented or how it will be implemented going forward, among other key matters. Simply answering which tax provisions apply or addressing the issue at a high level would fall short, to the client’s detriment, and generally reflect poorly on the tax advisor’s professionalism. What is truly useful is to provide comprehensive tax advice, identify the gray area while there is still room to support or correct it, shore up the transaction as much as possible, and explain what the implications could be for those involved if the SAT were ever to audit it. In our view, much of a tax advisor’s value lies there: not in making the analysis more complicated or agreeing with the client on everything, but in taking a clear-eyed view of what is happening or what has happened and preventing the client from later facing a surprise that could have been avoided from the outset.

5. What technological advancements are reshaping Tax law and how can clients benefit from them?

Data analytics and artificial intelligence are the advances that are reshaping tax practice in Mexico the most today because they are changing how audits are selected and prepared. The SAT already uses analytics and machine-learning tools to identify risk patterns and inconsistencies, and its 2026 Master Plan continues to rely on intelligent models to target audits. In practical terms, this means the SAT can approach a taxpayer with a fairly specific issue already under the microscope instead of starting an audit from scratch. That distinction matters because, in our view, if the SAT is reading the information that way, the taxpayer should be doing the same before the information request comes in.

Accordingly, the benefit to pursue lies precisely in using the technology available today to identify first what the SAT may later challenge. Consider a transaction that repeats hundreds of times a year. If the CFDI reflects one treatment, the accounting records show another, or certain payments fall outside the usual pattern, an analytics tool can flag those cases and take the tax team straight to the file or record that deserves a closer look. Artificial intelligence can certainly go further and connect agreements, CFDIs, accounting entries and other documents to identify where the story does not fully tie together. That makes it possible to correct an error while it is still manageable or, if the position is correct, to build a stronger support file to defend it.

Nevertheless, technology can multiply an error just as easily as manual processes can. If a tax provision is coded incorrectly by a human into an artificial intelligence or accounting system, or a transaction is mischaracterized from the outset by a company’s accounting department, something that can also be reflected in the corresponding CFDIs, automation can replicate the error across thousands of transactions before the SAT identifies it. That is why we do not see artificial intelligence replacing the tax judgment of a tax advisor in the short term. Digital tools can identify where to focus, but the advisor must still determine whether there is a tax issue, what the law requires and what position can be sustained during an audit. Ultimately, clients are looking to (i) identify issues early, (ii) correct them while there is still time, and (iii) enter a potential SAT audit with everything in order, a solid position and, ideally, a well-built defense file.

6. Describe a particularly interesting or complex matter you have advised on recently, and explain the challenges involved, your approach, and the outcome achieved for the client?

One of the most interesting matters we have handled recently arose from the new withholding regime for airlines, which today more than ever market transportation services through Digital Platforms that intermediate between third parties. Since the beginning of this year, the FRL 2026 has imposed on legal entities a 2.5% IT withholding on income earned through these platforms, increasing to 20% when the RFC is not provided. For VAT purposes, Digital Platforms must withhold 50% of the tax collected or 100% in certain cases. The underlying issue arose with nonresident airlines because certain DTTs entered into by Mexico may prevent that income from being taxed in the country for IT purposes, but the FRL 2026 did not say how that result should be reconciled with the withholding obligation imposed on Digital Platforms. In practice, this could result in Digital Platforms withholding IT from nonresident airlines even where Mexico had no taxing right over that income; if the Digital Platforms decided not to withhold, they could face a potential challenge from the SAT for failure to comply with their tax obligations.

The key point in this case was that a legal opinion for our client addressing the provisions of the FRL 2026 or the application of the relevant DTT would not, by itself, solve the underlying issue; it would only help keep the corresponding tax implications in view. In the specific case, because the withholding obligation fell on our client, a Digital Platform, the uncertainty over whether to withhold would recur transaction by transaction whenever it was involved. For that reason, in order to provide our client with a high-quality solution, our tax team developed a technical position that was later discussed with the tax authorities in several working sessions to explain, with solid arguments, where the issue lay and how the situation was affecting both our client and the airline and e-commerce industries. We needed to find a way forward that solved the underlying issue for the airlines while also giving Digital Platforms a clear basis to stop withholding. Ultimately, the technical discussions with the tax authorities resulted in Rule 9.1.24 being added to the Miscellaneous Tax Resolution for 2026, which applies retroactively from January 1, 2026, and allows Digital Platforms not to withhold IT and VAT from qualifying airlines resident in Mexico or nonresident airlines, with or without a permanent establishment, that earn income from domestic and international air transportation services through those platforms, provided certain conditions and requirements are met.

In addition to client satisfaction, this matter left us with experience that we can now bring to other clients. Some issues arising from tax reforms are not necessarily solved through a legal opinion or by regularizing the taxpayer’s tax position. If a tax provision is materially affecting a company or an entire industry sector, at Von Wobeser y Sierra we can assess the feasibility and advisability of developing a technical position and presenting it to the tax authorities, seeking a solution to a strategic tax policy issue through the publication of a general administrative rule. In this case, that route allowed a specific issue faced by a client that sought our tax advice to result in a solution applicable to the airline and e-commerce industries.