Mexico: Program inviting companies to correct tax status with respect to services received from suppliers not registered with Repse
Companies may correct their tax status with respect to services received from suppliers not registered with the Registry of Providers of Specialized Services or Specialized Works (Repse).
The Tax Administration Service (SAT) has launched a program inviting companies to correct their tax status with respect to services received from suppliers not registered with the Registry of Providers of Specialized Services or Specialized Works (Repse), in order that the companies may be entitled to deduct the expenses for such services for income tax (ISR) purposes or credit the value added tax (VAT) for the services provided.
Although taxpayers are not required to respond to these invitations, as they do not correspond to the formal initiation of an audit, implementing the following preventive measures may prevent initiation of an audit or tax assessment, or the temporary restriction of the digital seal certificate and consequently the inability to issue digital tax receipts online (CFDI):
- Identify the service providers and conduct a tax-labor analysis to determine if the services may be considered specialized and thus actually do not require a Repse
- Validate whether the providers’ Repse was in effect while providing their services
- If possible, provide information and documentation proving that the suppliers were duly active and registered with the Repse
- Verify compliance with tax requirements for income tax deductibility and VAT crediting purposes
Background
The labor reform implemented in April 2021 prohibited the subcontracting of personnel, except in the case of specialized services or the execution of specialized works that are not part of the corporate purpose or the predominant economic activity of the beneficiary company. To this end, one of the obligations of companies providing such services is to maintain a Repse. If providers do not have a valid and active Repse, the taxpayer receiving the services is not entitled to deduct these expenses for ISR purposes, nor to credit the VAT on the services provided.
Read a September 2025 report (Spanish) prepared by the KPMG member firm in Mexico