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Alberto OrtuzarSep 20, 2021 1:36:00 PM3 min read

How is digital transformation impacting your trade compliance strategy?

Multinational companies investing in Mexico have a great concern about minimizing their risks levels regarding taxes and customs duties, particularly in a changing and complex regulatory environment. Trade compliance requires strict observance of provisions comprised in various laws such as customs, value-added tax, general import and export taxes, the federal fiscal code, among others, even with the income tax law.

In addition to the changing environment, audits and verifications from the Tax Administration Service and some states of the Mexican federation have become more constant due to the improvement in their ability to identify deviations or alleged irregularities using more precise risk models based on technological systems.

The tax authority annually examines close to 5,000 taxpayers through in-depth audits on customs matters. That is, the capacity for auditing is about 5% per year. The selection criteria are taken from priority programs (valuation, origin, temporary importations), the complexity of technical interpretations of the law, as well as the number of people dedicated to inspection tasks.

Consequently, the foreign trade community composed of around 112,000 taxpayers —companies and individuals— faces not only the risk of monetary sanctions in case of relevant findings because of an audit but also the revocation of very valuable intangibles, such as the importer’s registry, the IMMEX program authorization and VAT Certification that would increase their operational costs substantially.

It is important to become aware that all information collected by the authority is very complete since it considers almost every aspect of the operation of a company. The significant data and information collected by the government are:

  1. Electronic accounting
  2. Monthly, informative, and annual tax returns
  3. Digital Tax Invoices via Internet (CFDI) related to Incomes, Outcomes, Transfer of goods, Payroll, Payments, and Withholding taxes
  4. Tax opinions made by Certified Public Accountants
  5. Customs information with their respective supporting documentation provided by electronic means
  6. Various notices, such as sub-maquila operations, mergers, increase/decrease of tax obligations
  7. Reports presented to governmental bodies such as INEGI or Ministry of Economy, including IMMEX & PROSEC annual reports
  8. Data and information from customers, suppliers, carriers, customs agents
  9. Tax & customs reports provided by foreign governments


Thus, a trend towards regulatory compliance and process automation is growing on the part of the authority, so the main challenge for companies is to standardize processes and procedures with emphasis on tax and customs, especially where there is a lack of communication and coordination between different people or departments across the organization such as finance/accounting, tax, supply chain, trade, operations or legal. It is highly recommended that upper management provide guidance and support to have strong reliability on high-tech solutions to maintain strict adherence to applicable regulations and reduce human errors. In some cases, investing in new or better technologies may represent a higher cost –outside the budget– but in the medium and long term, it should be the right decision for the best interest of the corporations.


Contact us for detailed information about our International Trade Compliance Solutions. We are ready to assist you with your trade compliance strategy.


About the Author

Jose Alberto Ortuzar

International Trade Compliance Director

Our Director of International Trade Compliance makes sure every process complies with the right set of regulations. Alberto provides strategic advice for the best use of tariff advantages, rules of origin interpretation, customs valuation, export promotion programs, and audits conducted by tax authorities.

For 30 years, he proactively promoted the highest tax and customs standards within various public and private organizations, leading multiple teams and projects on auditing International Trade negoriations, anti-corruption measures, and controversy.

With an integral vision of a global context, he is a frequent lecturer on International fora and an article writer for business publications. He is a member of the National Board for the Competitiveness of Foreign Trade and the Mexican Institute of Foreign Trade Executives.