Mexico’s Tax Administration Service detects new tax evasion scheme

More than 13 thousand partners and shareholders from 600 thousand marketing companies, service providers, media outlets, and soccer clubs , among others, have benefited from tax evasion through a new aggressive simulation scheme , according to the Mexican Tax Administration Service (SAT) .

Though the institution did not reveal the names of companies or individuals involved, they pointed out that the simulation scheme is a new way of tax evasion enabled by the professional fees system (“Régimen de asimilados a salarios”) , through which companies often use risky enterprises to pay for wages and salaries, even for people who have already died or have been registered up to 27 times.

In a press conference, the central administrator of SAT’s Planning and Programming of Federal Tax Audit Department, Samuel Arturo Magaña , pointed out that evaded taxes now rise to between 1 and 120 million pesos per company (USD$49,564.6-USD$5,947,740) .

“Companies that have avoided the payment of withholding taxes for between 100 and 120 million pesos are likely to be handling resources worth at least 300 million for legal persons. Hypothetically, they are using this scheme to avoid the payment of 100 million worth of taxes,” he explained.

The SAT administrator warned that the evasion of personal income taxes (ISR) through the professional fees system is a felony punishable by imprisonment from 5 to 15 years , depending on the court ruling.

Magaña pointed out that among the 13,000 partners that are known to evade ISR payments through this scheme, there are all sorts of people, including politicians .

The Tax Administration Service managed to recover a total of 400 million pesos (USD$19,825,800) through a series of corrections, out of which 161 million pesos corresponded to a single case of criminal nature.

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