Compliant taxpayers, Value-Added tax and  Income Tax refund in 5 days.
Compliant taxpayers, Value-Added tax and Income Tax refund in 5 days.

On January 11 the Tax Administration Service [in Spanish: SAT], reported through a press release that those taxpayers who fulfill their obligations in a timely manner will receive an income tax refund in an estimated five day period.

Because of technological innovations that have set in motion the tax authority; within these: electronic invoicing, the tax mailbox, electronic accounting, and all information regarding the movements of the Value-Added Tax [in Spanish: IVA], that is paid, withheld, and remitted through the use of a parametric model for rapid refunds, this benefit could be implemented in March 2016, to the extent that it confirms that if there are sufficient parameters, the number of direct payees will gradually increase.

The Tax Administration Service will utilize a system that compares the determined credit balance in the return with a statistical model for predicting. It compares and assesses the congruity between different information sources that it has and verifies that the taxpayer is not connected to any blacklist in the Tax Administration Service.

First and foremost, small and medium-sized enterprises [in Spanish: pequeñas y medianas empresas] (PYMES) and salaried workers will receive an automatic refund for the Value-Added Tax [in Spanish: Impuesto al Valor Agregado] (IVA) and for Income Tax [in Spanish: Impuesto Sobre la Renta] (ISR), without having to submit an application when they have a credit balance. In addition, the Treasury Secretary clarified that refunds for small and medium-sized enterprises will  continue when they are less than one million pesos. In the case of salaried workers, he emphasized that the requested credit balance will be that which reflects the pre-filled income tax return.     

This certainly represents a huge advance in administrative simplification, especially for small and medium-sized companies. Initially it was thought that the Tax Administration Service would soon publish more information about this new refund scheme.