Who are the subjects of fiscalization in Mexico?

In Mexico, fiscalization through the CFDI system is mandatory for all taxpayers engaged in economic activities, from large corporations to small local businesses, ensuring every taxable transaction is digitally certified and traceable. Limited exemptions exist, such as for individuals without business activities, certain low-income or rural sellers, and some service providers, but VAT and other taxes are generally enforced through CFDIs across all sectors.

The subjects of fiscalization, i.e. obligation to use the CFDI system in Mexico, include all companies and individuals engaged in economic activities that require the issuance of tax documents. This obligation covers every sale of goods or services provided to customers and is enforced through the issuance of CFDIs (Comprobantes Fiscales Digitales por Internet), which serve as the official electronic invoices or receipts.

In principle, fiscalization is mandatory for all taxpayers, regardless of the size or type of business. Both large multinational retailers and small local stores must comply with the obligation to issue CFDIs for taxable transactions. The system guarantees that every transaction is traceable, digitally certified, and archived, thereby providing a high level of transparency.

However, Mexican law also establishes a few exemptions from fiscalization. These include, e.g., individuals without business activities, low-income individuals in the informal sector (such as simplified regimes), occasional sellers in rural communities (including agricultural and artisan vendors), public transportation providers (like buses), etc.

The fiscalization framework applies across all types of taxation relevant to transactions, with a strong focus on VAT (Value Added Tax), which is included in each CFDI where applicable. Taxpayers must calculate and report VAT for each item or service sold, ensuring proper alignment with federal VAT law. In addition, other tax obligations, such as consumption taxes, are also managed through the same system.

Obligation to use the CFDI system in Mexico is not limited by business sector or taxpayer classification. Whether a company operates under a corporate tax regime, as a sole proprietor, or as a medium-sized business, the obligation to issue CFDIs applies equally. This universal requirement ensures consistent fiscal oversight across industries, while still allowing flexibility for smaller taxpayers who may use SAT’s online portal instead of a fully integrated POS system.