Tax Administration Service (SAT)
The Tax Administration Service (SAT) is an institution that is part of the Mexican government. Their responsibility is to apply the legislation to ensure that individuals and companies contribute to financing state spending.
In simple terms, the SAT is mainly in charge of collecting taxes in Mexico. Thus, it must facilitate and encourage citizens to voluntarily comply with the payment of taxes.
It should be noted that the SAT, which came into operation in 1997, is a decentralized office of the Ministry of Finance and Public Credit.This entity, in turn, is one of the ministries of the Mexican government.
Functions of the Tax Administration Service
Among the functions of the SAT are:
- Generate and provide the necessary information to the State for the design and evaluation of the tax policy.
- Supervise taxpayers so that they comply with tax and customs provisions.
- Manage the collection of taxes at the entry and exit of products from the country, as well as inspect these goods.
- Request and provide necessary information to other national or foreign entities. This, with the aim of avoiding cases of tax avoidance and / or evasion.
- Provide advice to taxpayers so that they can comply with their tax obligations.
- Process via Internet applications for CFDI or Digital Tax Receipt, which is the electronic invoice model used in Mexico. This document allows you to register on the web the amount of each sale made and the tax payable that it has generated.
- SAT's vision is to increase collection efficiency. At the same time, it seeks that the citizen has a good perception of the tax authority.
- Participates in the negotiation of international agreements carried out by the federal government. This, in matters that are within its competence, which are tax and customs issues.
- Expand and update the taxpayer registry.
SAT and RFC registrations
Another function of the SAT is to manage registrations in the Federal Taxpayers Registry (RFC). Thus, each applicant (individual or company that generates income) receives a number that will identify him to the collecting authority.
This procedure can be initiated by any Mexican over 18 years of age. In addition, the person must register in the RFC during the first month of starting their economic activities.
The code that the taxpayer receives from the SAT is unique and will allow monitoring of their tax payment. For this reason, all subjects obliged to pay taxes must request their registration.