In brief
On 26 January 2026, the Mexican Tax Administration Service (SAT) published its "2026 Master Plan," outlining its objectives to provide improved taxpayer services, implement a more transparent audit framework, and combat the commercialization of false invoices.
The 2026 Master Plan anticipates audits in areas identified as high tax‑risk, including simulated transactions, recurring tax losses, improper deductions, undeclared income, noncompliance in foreign trade, unremitted withholding taxes, structures involving tax havens, or a low effective tax rate.
Key takeaways
The 2026 Master Plan also establishes uniform audit criteria across all SAT offices in the country to reduce discretion and enhance legal certainty. Information requested during audits will be strictly limited to what is essential.
The Office of the Taxpayer Advocate ("PRODECON") has issued recommendations regarding the documentation that taxpayers should have readily available in the event of an audit. It is critical to maintain sufficient documentation to support the materiality of transactions and demonstrate proper tax compliance.
Finally, as we have noted on several occasions, it is of utmost importance to be prepared for potential audits, particularly with respect to cross‑border related‑party transactions. We recommend maintaining both physical and digital documentation to substantiate the materiality of such transactions and to prepare a robust defense file to support them.
In more detail
Improved taxpayer services
- New taxpayer service modules and a mobile office will be available across all 32 states of the Mexican Republic.
- New formats for filing procedures will be implemented.
- The use of technology will be strengthened to enable more procedures to be completed online.
- The appointment system will be expanded, and guidance will be provided for refund procedures.
Items subject to audit
- The SAT Master Plan 2026 anticipates audits focused on areas of heightened tax risk.
- Audits will primarily target taxpayers engaged in simulated transactions or transactions lacking economic substance, recurrent tax losses, improper deductions or refunds, undeclared income, customs and foreign trade non‑compliance, unpaid employment tax withholdings, structures involving tax havens, or an effective tax rate below the industry average.
- Taxpayer selection will be supported by data analytics and information cross‑checks, with the aim of focusing audit efforts on material inconsistencies rather than formal or minor errors.
Consistency of audit criteria
- The SAT Master Plan 2026 expressly establishes the SAT's commitment to ensuring the uniform application of audit criteria across all tax offices nationwide, with the aim of reducing discretion and providing greater legal certainty to taxpayers.
- In particular, the SAT indicates that consistent criteria will apply to audit procedures involving items such as:
- Discounts and commercial adjustments
- Unidentified deposits
- Economic substance (materiality) analysis of transactions
- Marketing and promotional expenses
- Imports and foreign trade matters
- Compliance with non tariff regulations, permits, certifications, and authorizations
- Additionally, the SAT states that any information requested during audits will be strictly necessary, and that audit actions will be directed at taxpayers with identified irregularities, avoiding unnecessary audits of those who comply properly and timely with their tax obligations.
Increase in tax audits
In practice, we have seen a notable increase in tax audits, as well as stricter positions from the tax authority—particularly regarding the level and quality of supporting documentation required to substantiate the materiality of deductions.
- The Mexican Tax Administration Service is empowered to review taxpayers' compliance with their tax obligations.
- Tax collection by the SAT has increased in recent years. In 2025, total tax revenue reached MXN 6 trillion 45.795 billion, representing a 4.8% increase compared to 2024.
- For 2026, the SAT has initially planned to carry out more than 16,200 tax audits, and it is expected that its verification criteria will become more stringent.
PRODECON recommendations
- In alignment with the 2026 Master Plan, it is important to consider the legal precedents and the criteria issued regarding what should be understood as the materiality of deductions, as well as the supporting documentation that taxpayers are expected to maintain.
- For example, on 16 January 2026, PRODECON released a communication titled "PRODECON informs you: About the documentation you must have available in case the tax authority exercises its audit powers." In this notice, PRODECON reminds taxpayers of the importance of maintaining sufficient documentation to support the real existence (materiality) of their transactions and to demonstrate proper tax compliance.
Substance of transactions
- Based on our experience, in recent years the SAT has increasingly questioned the substance (existence) of transactions carried out by taxpayers during audit procedures, particularly those entered into with foreign residents and related parties. Failure to provide adequate evidence to demonstrate such substance may result, among other consequences, in the denial of deductions.
- In light of these common practices by the tax authority and considering the SAT and PRODECON criteria, PRODECON, in its 16 January 2026communication, urged taxpayers to preserve and organize both physical and digital documentation that can substantiate the materiality of their transactions in the event of potential audits, home visits, or desk reviews
- In our experience, when services are involved, the authority frequently challenges the effective rendering of the services and the benefit obtained by the company, requiring proof of deliverables, reports or communications evidencing their performance and usefulness. Likewise, the SAT often demands compliance with formal legal requirements, such as having documentation with "date certain" (i.e., a date that is legally enforceable and verifiable against third parties) to prove when such documents became legally effective.
Given the ever-present possibility of a tax audit, it is advisable for taxpayers to maintain sufficient documentation to support the substance of their transactions, including, among others: accounting records and working papers, tax returns, electronic tax invoices (CFDIs), operating manuals or flowcharts, deliverables, agreements, contracts and appendices with date certain, purchase orders, quotations, proof of payment, delivery reports, bank statements, and emails with customers and suppliers supporting the transactions carried out.
Recommendations
Defense files
- Although there are judicial precedents establishing that the tax authority may not require disproportionate evidence or evidence that does not correspond to the nature of the transaction in order to prove its substance, in practice the authority continues to conduct strict reviews in this area. While such precedents serve as an important limit against excessive requests, they do not eliminate the risk that the authority may challenge the sufficiency of the documentation provided by taxpayers.
- Additionally, judicial precedents supporting the tax authority's position must also be considered, including those related to the "date certain" of legal documents, the burden of proof, and the taxpayer's obligation to evidence the rendering of services, among others.
- We recommend that, in anticipation of a potential tax audit, companies prepare a robust defense file clearly and systematically supporting the transactions carried out, particularly those involving recurring expenses, significant amounts, or services provided by foreign related parties. Likewise, we recommend not waiting for the tax authority to initiate an audit. Instead, taxpayers should begin compiling and maintaining this documentation file proactively.
- Having such a file prepared in advance allows taxpayers to respond promptly to any information requests, mitigate risks, and demonstrate the economic reality of their transactions without relying solely on the tax authority's discretion during the audit process.
Baker McKenzie Mexico has a multidisciplinary team of lawyers, accountants, and economists with extensive experience in tax audits who can assist you in preparing defense files or supporting you from the outset of a tax review. We invite you to schedule a meeting with our team to discuss strategies tailored to your company's needs.