Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
The exporter's arithmetic is relentless: you sell at the 0% rate (art. 29 LIVA), so you charge no IVA — but you pay 16% on almost all your domestic inputs. Each month, that 16% piles up as a credit balance. An exporter invoicing MXN 10 million a month with 60% taxable inputs generates close to a million pesos a month of IVA credit. If you do not recover it systematically, you are financing the treasury with your working capital — at 0% interest.
Why the 0% rate is different from being exempt
The 0% rate is the jewel of the system: you pass no IVA on to your foreign client, but you keep the full right to credit the IVA you paid. An exempt taxpayer credits nothing; a 0%-rate taxpayer credits everything and, because it has no IVA payable to apply it against, its natural destiny is the monthly refund.
The file of the exporter who gets paid on time
The authority reviews two fronts. That the export happened: export customs declarations (pedimentos) reconciled against invoices and against the accounting records — the invoice–pedimento–foreign-payment trilogy has to tie out to the peso. For the export of services (use abroad, art. 29 section IV), the standard rises: contracts, evidence of use outside Mexico, and payments from foreign accounts. That the creditable IVA is legitimate: this is where most refunds die — suppliers with a weak profile, an inconsistent DIOT (the VAT informative return), and large purchases with no materiality file. Your refund is only as strong as your worst relevant supplier.
Do you recover your IVA every month — or every time it 'piles up'?
We set up the recurring refund process: a monthly calendar, a standardized file, supplier verification against the lists of the SAT (Mexico's tax administration), and management of the authority's requests for information. The goal is not one refund: it is for the cash to come back on its own, every month.
The three expensive mistakes of the trade
Filing sporadically: bundling 8 months of balance and asking for it all at once turns a routine request into one whose amount alone invites review. The disciplined monthly refund goes through more smoothly and funds the operation. Neglecting the proportion: if you also have taxable or exempt domestic sales, getting the proportional crediting (arts. 5 and 5-C LIVA) wrong contaminates the entire request. Ignoring your suppliers' status: a single relevant supplier published on the SAT blacklists (article 69-B) freezes your whole filing while you clear it up — verify before you buy, not after you file.
Frequently asked questions
I export digital services — do I also apply the 0% rate?
Services used abroad qualify for the 0% rate under art. 29 section IV LIVA and its regulations, including certain technology services — the analysis of 'use abroad' (aprovechamiento) is the crux, and the contractual evidence is decisive. Worth a case-by-case review.
Do sales to an IMMEX company with the required certificate also give me the 0% rate?
Sales to companies with export programs have specific treatments (IVA withholding in certain cases under art. 1-A). The financial effect is similar — a credit balance — but the mechanics and the supporting documentation change; do not mix them with direct exports in your working papers.
How often should I file?
Monthly. It is the standard among institutional exporters: smaller amounts, a repeatable file, and the cash comes back before the next purchasing cycle needs it.
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