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●Risks and Countermeasures Faced by Japanese Companies For Japanese companies with a presence in Mexico, it is important to understand the CFDI system at the headquarters level rather than leaving it entirely to local management. This is especially true since the CFDI includes items that require judgment from the sales and accounting departments, making it risky to completely delegate to local accountants. Key Points for Risk Mitigation - Conduct regular reviews - Visualize the issuance process - Document supplementary information in internal manuals By implementing these measures, you can minimize the risk of penalties due to deficiencies or omissions in supplementary information. It should be noted that the CFDI system is still ongoing. (Introduced in 2022 → Mandatory in 2023 → Valid in 2025) CFDI 4.0 was introduced in 2022, and its issuance became mandatory in 2023. As of 2025, the SAT (Mexican Tax Authority) continues to maintain and strengthen this system, updating it as necessary. If you are considering expanding into Mexico or have concerns regarding labor, accounting, or taxation after entering the Mexican market, please feel free to contact us.

The Mexican Tax Administration (SAT) may impose the following penalties regarding CFDI: [1] Invoices without complementary information (Factura sin complementos) If a CFDI is issued without complementary information (complementos), a fine of 400 to 600 Mexican pesos may be imposed per instance. [2] CFDI with errors (CFDI con errores) Repeated occurrences of errors or inconsistent entries may also be subject to a penalty of 400 to 600 pesos per instance. [3] Late cancellation (Cancelación fuera del plazo) If the cancellation of a CFDI is made after the deadline, a fine equivalent to 5 to 10% of the invoice amount will be incurred (accumulated per instance). Note: CFDI can only be canceled within the "fiscal year in which it was issued." Additionally, it is mandatory to provide a reason for the cancellation and submit supporting documents.

What is Mexico's electronic invoicing system "CFDI"? In Mexico, all corporations and sole proprietors are required to issue electronic invoices (CFDI: official name Comprobante Fiscal Digital por Internet). CFDI is necessary not only for the sale of goods and services but also for almost all transactions, including payroll and expense reimbursements. CFDI 4.0 (the fourth version), which was introduced on January 1, 2022, became fully mandatory in 2023 and continues to be applied as of 2025. At first glance, it may seem like just a rule for issuing invoices, but even minor mistakes such as omissions of supplementary information, incorrect entries, or exceeding cancellation deadlines can lead to fines of several hundred pesos per incident. In particular, Japanese companies that leave the system entirely to local subsidiaries without fully understanding it at headquarters often face increased risks. It is important to correctly grasp the system's mechanisms and establish an operational framework.