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Mexico tax audits and disputes: five year statute, audit deadlines, surcharges and fines, settlement agreements, administrative appeal and tax court

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Last verified: 2026-10-26 · Status: Changing

The SAT can assess taxes for five years from the annual return (ten years if the taxpayer is unregistered, keeps no books or files no return), audits at the taxpayer's premises or by desk review must end within twelve months (eighteen for financial and group taxpayers, two years for transfer pricing or foreign information requests), and assessments must issue within six months after the audit closes. Late tax bears inflation adjustment and surcharges of 2.07 percent a month in 2026; fines for underpayment found in an audit are 55 to 75 percent of the tax, falling to 20 or 30 percent if paid during the audit. Taxpayers can seek a settlement agreement (acuerdo conclusivo) through the taxpayer ombudsman during the audit, then appeal an assessment within 30 business days by administrative appeal (recurso de revocación) or before the Federal Administrative Court, guaranteeing the tax to stop collection.

USD conversions use MXN 18.5026 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 16 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Mexican tax law uses the Banxico FIX for foreign currency amounts, which differs slightly. Conversions are for orientation only.

Key facts

Statute of limitations for tax assessments (general)	5 yearsCFF art. 67, as of 2026-10-26 · in force
Statute of limitations when unregistered, without books or without annual return	10 yearsCFF art. 67, as of 2026-10-26 · in force
Maximum duration of a field audit or desk review (general)	12 monthsCFF art. 46-A, as of 2026-10-26 · in force
Time to issue the assessment after the audit closes	6 monthsCFF art. 50, as of 2026-10-26 · in force
Monthly surcharge on late tax payments (2026)	2.07 %LIF 2026 art. 11, section I, increased 50 percent under CFF art. 21, as of 2026-10-26 · in force
Fine for omitted tax found in an audit	55 to 75 % of taxCFF art. 76, as of 2026-10-26 · in force
Fine if omitted tax is paid during the audit before the final report or observations letter	20 % of taxLFDC art. 17, as of 2026-10-26 · in force
Deadline to file the administrative appeal (business days)	30 daysCFF arts. 12 and 121, as of 2026-10-26 · in force
Deadline to file a claim before the Federal Administrative Court	30 daysLFPCA art. 13, as of 2026-10-26 · in force
Amount ceiling for the summary procedure at the Federal Administrative Court (30 annual UMA, 2026)	1283839.20 MXNLFPCA art. 58-2; UMA 2026, as of 2026-10-26 · in force
Term for the SAT to pay a complete refund claim	40 daysCFF art. 22, as of 2026-10-26 · in force

The rule

1. Statute of limitations: five years, sometimes ten. The SAT's power to assess omitted taxes and impose fines expires five years from the day after the annual return was filed (for monthly taxes reported in the annual return, from when that information was due), from the filing date of other returns, or from when the infraction was committed; amended returns restart the term for the items changed. The term is ten years when the taxpayer did not register in the RFC, did not keep or retain accounting records, or did not file the annual return when obliged, among other cases. Audits and certain other acts suspend the term.
Cost to do it: Keep records and supporting documents for at least five years (CFF art. 30).
Example: A company files its 2026 annual return on 31 March 2027. Unless suspended, the SAT can audit 2026 until the end of March 2032. / A USD 1 million deduction claimed in 2026 can be challenged until March 2032, with tax of USD 300,000 plus surcharges and fines at stake.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Art. 67, 1981-12-31 official text · verified 2026-10-26

2. How long audits may last. A field audit (visita domiciliaria) or desk review (revisión de gabinete) must end within twelve months from notice of its start; eighteen months for financial system taxpayers and companies in the optional group regime; two years when the SAT requests information from foreign tax or customs authorities, reviews transfer pricing obligations or verifies origin. The term is suspended in cases such as strikes, the taxpayer leaving its tax address without notice, or failure to answer information requests (up to six months per request and one year in total). After the final audit report or the deadline for the taxpayer's response to the observations letter, the SAT has six months to issue the assessment.
Cost to do it: Professional fees to manage the audit; the time limits are defenses if the SAT exceeds them.
Example: The SAT notifies a desk review of 2024 on 1 March 2026; it must conclude by 1 March 2027 unless suspended, and the assessment must be issued within six months after the review closes. / Audit timelines matter when tax at stake runs to hundreds of thousands of US dollars.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Arts. 46-A and 50, 1981-12-31 official text · verified 2026-10-26

3. Inflation adjustment and surcharges. Tax not paid on time is restated for inflation from the month it was due and bears surcharges as compensation. The monthly surcharge rate for late payment is the rate set annually by Congress increased by 50 percent; for 2026 the Federal Revenue Law sets 1.38 percent a month for extensions, so late payment surcharges are 2.07 percent a month. Installment plans authorized under the tax code bear 1.42 percent a month for up to 12 months, 1.63 percent for 12 to 24 months and 1.97 percent beyond 24 months or for deferred payment (these include inflation adjustment). Surcharges accrue for up to five years, or for as long as the assessment power lasts in the ten year cases.
Cost to do it: 2.07 percent a month of the restated tax, plus inflation, on late payments in 2026.
Example: A company pays MXN 1,000,000 of VAT six months late in 2026. Surcharges are about MXN 124,200 (6 x 2.07 percent) on the inflation restated amount, plus the restatement itself. / Late tax of about USD 54,046; surcharges of about USD 6,713 for six months at 18.5026.Ley de Ingresos de la Federación para el Ejercicio Fiscal de 2026 (LIF 2026), DOF 7 November 2025, in force 1 January 2026, Art. 11; CFF art. 21, 2025-11-07 official text · verified 2026-10-26 · changed: The Federal Revenue Law for 2026 (DOF 7 November 2025) set the extension surcharge rate at 1.38 percent a month and installment rates of 1.42, 1.63 and 1.97 percent for 2026; these rates are set each year.

4. Fines and voluntary correction. When the SAT discovers unpaid taxes (including withheld taxes, but not foreign trade taxes) in an audit, the fine is 55 to 75 percent of the omitted tax. A taxpayer that pays the tax and accessories after the audit starts but before the final audit report or observations letter pays a fine of 20 percent; if it pays after that but before the assessment is notified, 30 percent.
Cost to do it: 55 to 75 percent of the omitted tax if assessed; 20 or 30 percent if corrected during the audit.
Example: An audit finds MXN 2,000,000 of omitted income tax. If assessed, the fine is MXN 1,100,000 to MXN 1,500,000; if the company corrects before the observations letter, the fine is MXN 400,000. / Tax of about USD 108,093; fine of about USD 59,451 to USD 81,070, or about USD 21,619 if corrected early, at 18.5026.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Art. 76; LFDC art. 17, 1981-12-31 official text · verified 2026-10-26

5. Settlement agreements (acuerdos conclusivos). A taxpayer under a field audit, desk review or electronic review that disagrees with facts or omissions recorded in the last partial report, final report, observations letter or provisional resolution may request a settlement agreement, processed by the taxpayer ombudsman (PRODECON), on one or more of the facts. The request can be filed from the start of the audit until 20 days after the final report, observations letter or provisional resolution, once the SAT has qualified the facts. It is not available for audits verifying refund claims, among other exclusions. An agreement is final for the facts it covers.
Cost to do it: No government fee; adviser time to negotiate through PRODECON.
Example: During a desk review the SAT questions MXN 30,000,000 of intercompany service fees. The company requests a settlement agreement through PRODECON and agrees to accept part of the adjustment, closing the matter for those facts. / Disputed deductions of about USD 1,621,394, with tax at stake of about USD 486,418 at 18.5026.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Arts. 69-C to 69-H, 1981-12-31 official text · verified 2026-10-26

6. Administrative appeal and suspension of collection. An assessment can be challenged by administrative appeal (recurso de revocación) filed through the taxpayer's tax mailbox within 30 days after notice takes effect; time limits in days count business days only. Collection cannot be enforced while the 30 day term runs, and if the taxpayer proves within that term that it challenged the assessment and guarantees the tax interest, enforcement is suspended.
Cost to do it: Guarantee of the tax interest (bond, pledge, mortgage or deposit) and legal fees.
Example: A company receives an assessment of MXN 50,000,000 on 2 March 2026. It files the administrative appeal within 30 business days and guarantees the debt so that collection is suspended while the appeal is decided. / Assessment of about USD 2,702,323 at 18.5026.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Arts. 117, 121 and 144, 1981-12-31 official text · verified 2026-10-26

7. Federal Administrative Court. Instead of, or after, the administrative appeal, a taxpayer may file a nullity claim (juicio contencioso administrativo) before the Federal Court of Administrative Justice within 30 days of notice of the resolution, counting only business days of the court (art. 74). Cases involving final resolutions whose amount does not exceed 30 times the annual UMA (MXN 1,283,839.20 in 2026, based on a daily UMA of MXN 117.31) follow the faster summary procedure, also filed within 30 days.
Cost to do it: Legal fees; guarantee to stop collection. The summary procedure ceiling is about USD 69,387.
Example: A company fined MXN 900,000 can use the summary procedure because the amount is below MXN 1,283,839.20; a MXN 50,000,000 assessment goes through the ordinary procedure. / Fine of about USD 48,642; summary ceiling of about USD 69,387 at 18.5026.Ley Federal de Procedimiento Contencioso Administrativo (LFPCA), DOF 1 December 2005 (Chamber of Deputies consolidated text, last reform DOF 9 June 2026), Arts. 13, 58-2 and 74, 2005-12-01 official text · verified 2026-10-26

8. Invoices for non existent transactions and the 2026 reform. When the SAT detects that a taxpayer issued invoices without the assets, staff, infrastructure or capacity to deliver, or is not locatable, it presumes the transactions do not exist, notifies the issuer and publishes it; customers must prove the transactions were real or correct their returns. Issuing, selling, buying or acquiring invoices for non existent, false or simulated transactions is a crime punishable by two to nine years in prison; since the reform published on 7 November 2025 this also covers giving tax effect to false invoices, and the crime is prosecuted independently of the administrative procedure. The same reform added rules letting auditors act directly when an invoice does not reflect the real transaction (art. 29-A Bis) and requiring digital service providers to give the SAT permanent online real time access to information needed to verify compliance (art. 30-B).
Cost to do it: Loss of deductions and VAT credits on the invoices, plus fines and criminal exposure.
Example: A company deducted MXN 5,000,000 of invoices from a supplier later listed under art. 69-B. Unless it proves the services were real, it loses the deduction and the MXN 800,000 VAT credit and owes tax, surcharges and fines. / Invoices of about USD 270,232; VAT credit at risk of about USD 43,237 at 18.5026.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), Arts. 69-B, 29-A Bis, 30-B and 113 Bis, 1981-12-31 official text · verified 2026-10-26 · changed: Decree published in the DOF on 7 November 2025 (in force 1 January 2026) added CFF arts. 29-A Bis and 30-B and expanded art. 113 Bis to cover giving tax effect to false invoices, with independent criminal prosecution.

Stage	Time limit	Rule
SAT power to assess	5 years (10 in listed cases)	CFF art. 67
Field audit or desk review	12 months; 18 for financial and group taxpayers; 2 years for transfer pricing or foreign information requests	CFF art. 46-A
Assessment after audit closes	6 months	CFF art. 50
Request a settlement agreement	From audit start to 20 days after final report or observations letter	CFF art. 69-C
Administrative appeal	30 business days from notice	CFF art. 121
Federal Administrative Court claim	30 days from notice	LFPCA art. 13
Refund payment	40 days from a complete claim	CFF art. 22

Key time limits in Mexican federal tax audits and disputes, verified 26 October 2026

Worked example

In March 2026 the SAT opens a desk review of a Mexican subsidiary's 2024 return and questions MXN 20,000,000 (about USD 1.08 million) of management fees paid to the parent.
If the company accepts part of the adjustment and pays before the observations letter, the fine on that part is 20 percent of the tax rather than 55 to 75 percent; it can also request a settlement agreement through PRODECON for the rest.
If an assessment issues, it has 30 business days to file an administrative appeal or a court claim and must guarantee the tax interest to suspend collection. Tax of MXN 6,000,000 paid late accrues surcharges of 2.07 percent a month in 2026 plus inflation adjustment.

Step by step

1. Keep accounting records, CFDI and supporting documents for at least five years and monitor the tax mailbox, where most SAT notices arrive.
2. When an audit starts, calendar the twelve month limit and every response deadline; missing information requests suspends the clock against you.
3. Quantify exposure early and decide whether to correct voluntarily, which reduces fines to 20 or 30 percent.
4. Consider a settlement agreement through PRODECON before the 20 day window after the observations letter closes.
5. If assessed, choose between administrative appeal and direct court claim within the 30 day term and arrange a guarantee.
6. Screen suppliers against the SAT art. 69-B list before paying and keep proof that services were actually provided.

Common traps

Ignoring the tax mailbox. Notices served there start the 30 day appeal term (CFF art. 121).
Counting calendar days. Day based terms exclude weekends and listed holidays in the tax code (CFF art. 12) and count only days the court is open in tax court cases (LFPCA art. 74).
Not guaranteeing the debt. Without a guarantee, the SAT can enforce collection after 30 days even if an appeal is pending (CFF art. 144).
Buying invoices from listed suppliers. Deductions and VAT credits are denied unless you prove the transactions were real, and false invoices carry two to nine years in prison (CFF arts. 69-B and 113 Bis).
Assuming twelve months. Transfer pricing and cross border information requests extend audits to two years (CFF art. 46-A).

Sources

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