Due to important changes in the incoming government’s tax policy, tax authorities have heavily
enforced programs to increase tax revenue in recent months. In particular, the Tax Administration
Service (“SAT”) has put particular efforts in implementing tax compliance assurance programs,
which has brought serious complications in taxpayers’ day to day operations, as explained below.
Since the digital invoicing era, it is far easier for tax authorities to unveil asymmetries between
income/deductions declared in tax returns and income/deductions actually supported by digital
invoices; if a difference exists, authorities consider that it is likely that the flagged taxpayer has failed
to properly pay the corresponding taxes. This program relies on SAT’s engagement with taxpayers
to create awareness about voluntary corrections, and is achieved by issuing “invitation letters” in
which authorities simply inform taxpayers that they have identified certain tax inconsistencies
(usually with no further details), luring them into an appointment to discuss the alleged differences
within 15 to 30 days after the letter is duly served (although we have seen cases in which the
appointment is scheduled for a day after the letter is served).
Attending to these meetings is not something that should be passed over lightly, considering that if
the taxpayer doesn’t show up or does so without clarifying the observed differences, authorities will
usually proceed to cancel their digital tax certificates, which are required to issue invoices,
preventing taxpayers from operating normally. Although a case by case analysis should be made in
order to determine the approach that companies should take to counter these measures, our
recommendation is normally to attend the meeting and understand what it is that tax authorities are
after. Unless there are technical merits under which the taxpayer could build a case against the tax
authorities observations, companies should try to correct themselves to avoid the cancelation of
their digital tax certificates, since once they are cancelled, it may take up to a month to have them
We expect these practices to increase over the next months and, therefore, companies should be
aware and prepared to act efficiently to avoid hindering their business operations.