Mexican Tax Invoice

In Mexico, the legal tax document for all commercial transactions is the CFDI (Comprobante Fiscal Digital por Internet) — an XML-based electronic invoice generated and digitally stamped by an authorized PAC (Proveedor Autorizado de Certificacion). Per Mexican tax law (Codigo Fiscal de la Federacion), all sales of goods and services must be documented with a CFDI for the transaction to be: (1) tax-deductible for the buyer and (2) reported to SAT (Servicio de Administracion Tributaria, Mexico's tax authority). CFDI 4.0 (current version) requirements: RFC (Registro Federal de Contribuyentes) of both issuer and receiver, fiscal regime, product description with SAT catalog code (clave de producto/servicio), unit of measure (SAT unit code), IVA at 16% (standard rate, calculated on subtotal), payment method (transferencia, cheque, efectivo), CFDI use (uso del CFDI — code indicating the buyer's tax treatment), and digital stamp (sello digital). For industrial B2B transactions: the CFDI must correctly identify the product using SAT product codes (e.g., 40161505 for V-belts, 40151512 for rubber sheet), and the IVA amount must be separately stated. An incorrectly issued CFDI cannot be used for tax deduction — this is a critical concern for Mexican industrial buyers. Per SAT regulations.

What you need to know

Per Mexican tax law (Codigo Fiscal de la Federacion), all sales of goods and services must be documented with a CFDI for the transaction to be: (1) tax-deductible for the buyer and (2) reported to SAT (Servicio de Administracion Tributaria, Mexico's tax authority).

CFDI 4.0 (current version) requirements: RFC (Registro Federal de Contribuyentes) of both issuer and receiver, fiscal regime, product description with SAT catalog code (clave de producto/servicio), unit of measure (SAT unit code), IVA at 16% (standard rate, calculated on subtotal), payment method (transferencia, cheque, efectivo), CFDI use (uso del CFDI — code indicating the buyer's tax treatment), and digital stamp (sello digital).

For industrial B2B transactions: the CFDI must correctly identify the product using SAT product codes (e.g., 40161505 for V-belts, 40151512 for rubber sheet), and the IVA amount must be separately stated.

An incorrectly issued CFDI cannot be used for tax deduction — this is a critical concern for Mexican industrial buyers.

Full definition

In Mexico, the CFDI (Comprobante Fiscal Digital por Internet) serves as the legal tax document for all commercial transactions, mandated by the Código Fiscal de la Federación. This electronic invoice, reliant on XML format, must be generated and digitally stamped by an authorized PAC (Proveedor Autorizado de Certificación). It is crucial for all sales of goods and services to be documented with a CFDI for the transaction to qualify as tax-deductible for the buyer and to be reported to the SAT (Servicio de Administración Tributaria), Mexico's tax authority. The current version, CFDI 4.0, incorporates specific requirements that ensure compliance with tax regulations.

Key components of a CFDI include the RFC (Registro Federal de Contribuyentes) of both the issuer and receiver, the fiscal regime applicable to the transaction, detailed product descriptions with corresponding SAT catalog codes (clave de producto/servicio), and unit of measure codes defined by SAT. Additionally, the standard IVA (Impuesto al Valor Agregado) rate of 16% must be calculated on the subtotal and stated separately. Payment methods such as transferencia (bank transfer), cheque, or efectivo (cash) are also required to be indicated. The CFDI use code (uso del CFDI) specifies how the buyer intends to treat the invoice for tax purposes.

For B2B transactions, particularly in the industrial sector, ensuring the correct identification of products using SAT product codes is vital. For example, V-belts are identified with the code 40161505 and rubber sheets with 40151512. Any discrepancies in this process can lead to the CFDI being deemed invalid for tax deduction purposes, which poses a significant risk for Mexican industrial buyers. Adhering to SAT regulations is not merely a bureaucratic necessity; it is essential for maintaining financial integrity and ensuring that businesses can leverage tax deductions effectively. An incorrectly issued CFDI, lacking in necessary details or containing erroneous information, cannot be used for tax deduction, making accuracy paramount in the invoicing process.

What you need to know

What you need to know:

The CFDI is an XML-based electronic invoice required for tax deductions in Mexico.

CFDI 4.0 includes essential data such as RFCs, fiscal regime, product descriptions, and IVA.

Incorrect issuance of a CFDI can jeopardize tax deduction eligibility for buyers.

SAT product codes must be correctly specified for industrial goods to avoid compliance issues.

The IVA is calculated at 16% on the subtotal and must be stated separately on the CFDI.

Mexican Tax Invoice

What you need to know

Full definition

What you need to know

Industrial applications

Common mistakes

Pro tip

Technical standards

Suppliers of industrial products in Mexico