MEXICO: An Introduction to Corporate/Commercial: Monterrey

How Artificial Intelligence and Data-Driven Audits Are Transforming Corporate Tax Compliance

Between January and July 2025, Mexico collected MXN3.278 trillion in tax revenue – a 7.2% increase compared to the same period in 2024. This growth is driven by the Tax Administration Service’s (SAT) ambitious 2025 Master Plan, which targets MXN5.3 trillion in annual revenue without creating new taxes or increasing existing ones.

The plan focuses on using advanced technology to monitor tax compliance, including data analytics and machine learning to detect inconsistencies.

In this evolving environment, the SAT’s authority in Mexico has been reshaped by technology and the use of artificial intelligence (AI).

This article explores how these changes affect taxpayers, and offers key strategies to manage risks, prepare for audits and respond effectively. It also examines the impact of AI on tax enforcement, and offers practical guidance for medium and large companies working to strengthen compliance and reduce tax exposure in a rapidly shifting regulatory landscape.

SAT’s Statutory Powers

From the perspective of administrative tax law, the SAT exercises both management powers and tax examination and enforcement powers.

• Management powers are administrative and preventative, focusing on encouraging voluntary compliance rather than determining tax liabilities. They involve actions such as assistance, monitoring and oversight. One example is the use of “compliance letters”, which the SAT sends to notify taxpayers of unusual activity or inconsistencies between their tax returns and Digital Tax Receipts (CFDI).
• In contrast, tax examination and enforcement powers focus on verifying whether taxpayers have met their obligations. This includes conducting audits and, when necessary, calculating and charging any unpaid taxes and related penalties.

This dual role – examining compliance and enforcing the law – reflects both the preventative and corrective responsibilities of the SAT, ensuring proper tax compliance and the effective collection of public revenue.

Principal Audit Mechanisms

The SAT uses three main types of audits to ensure compliance and support effective tax collection: on-site audits, desk audits and electronic audits.

• On-site audits involve SAT officials visiting a taxpayer’s location – such as offices, branches or warehouses – to review accounting records, inventory and supporting documents in person.
• Desk audits require taxpayers to submit accounting records and documentation directly to the SAT’s offices for review.
• Electronic audits represent a fully digital approach. These audits rely on data the SAT already possesses – including CFDI, filed returns, third-party reports and banking transactions – to detect inconsistencies or irregularities.

While not part of the formal audit process, compliance letters serve as a preventative tool. The SAT uses them to alert taxpayers about discrepancies and to encourage voluntary corrections before any formal enforcement action is taken.

Increasing Revenues: the 2025 Master Plan

The SAT’s 2025 Master Plan is built on three core pillars:

• taxpayer assistance;
• support for compliant taxpayers; and
• tax enforcement to combat evasion and smuggling.

As part of its tax enforcement strategy, the SAT has adopted advanced technologies. These include:

• graph analytics to identify financial and corporate connections;
• machine learning to detect unusual patterns in tax returns and CFDI; and
• risk analysis tools to classify taxpayers by risk level.

The SAT also uses AI to uncover complex corporate structures intended to reduce tax liability, and employs search engines that analyse millions of electronic invoices in real-time to spot errors or inconsistencies.

These tools enable the SAT to identify discrepancies much faster, shortening the time between taxpayer mistakes and enforcement actions. The rise in tax revenues reflects a new audit and enforcement model driven by automation, data analysis and AI.

By turning taxpayer data into a real-time audit trigger, the SAT has redefined tax compliance standards. Today, real-time digital tax compliance has become a key benchmark for foreign investors and companies engaged in nearshoring operations in Mexico.

Preventative Recommendations for Taxpayers

The most effective audit strategy is preparation. An organised and well-prepared taxpayer can face the audit process more efficiently and with lower risk exposure.

From a documentation perspective, taxpayers should keep their accounting records current and well organised. All supporting documents – such as CFDI, contracts, bank statements, vouchers and corporate minutes – must be complete and easy to access.

Regular reconciliation of accounting data with filed tax returns and both issued and received CFDI is essential. The SAT places particular emphasis on consistency between electronic invoices and reported financial information during audits. All documentation should be retained for at least five years, ideally in secure digital formats. It is also important to routinely verify that CFDI are issued and received correctly, including payment details and all required tax information.

From a procedural and strategic perspective, companies should:

• maintain ongoing specialised advisory support;
• train staff responsible for tax and accounting compliance;
• conduct internal audits or preventative reviews;
• respond promptly to compliance letters; and
• keep tax domicile and contact information in the SAT’s electronic mailbox up to date.

Best Practices During a Tax Audit

How a taxpayer handles an audit can significantly impact the final outcome. To manage the process effectively, it is recommended to appoint a single point of contact to handle all communication with the SAT. This person should:

• ensure that the audit order meets all legal requirements;
• submit only the information specifically requested;
• keep copies of all documents submitted; and
• carefully track and meet all statutory deadlines.

All communication with the SAT should remain formal – ideally in writing and through official channels.

Taxpayers may also seek support from PRODECON (the taxpayer ombudsman) to negotiate a conclusive agreement with the SAT. This alternative mechanism can help resolve issues without resorting to lengthy litigation.

If any clear errors are identified, taxpayers should act quickly to assess the situation and take corrective measures to reduce potential penalties and interest.

Specific Recommendations in an AI-Driven Audit Environment

AI-powered audits demand full consistency across accounting, financial and tax records – especially for CFDI and banking transactions. To stay ahead, taxpayers should:

• conduct internal audits using technology that mirrors the SAT’s detection tools; and
• work with advisers who understand both the legal framework and how algorithm-based audits work.

Monitoring the SAT’s electronic mailbox regularly is advised, as it is the official channel for notifications. In this data-driven environment, deviations from expected patterns can quickly trigger desk audits or on-site inspections.

Keeping clean, accurate records and engaging early – through advance pricing agreements, voluntary corrections or penalty relief programmes – is now one of the most effective ways to avoid complications.

Rather than viewing these tools as a threat, companies should see them as an opportunity to strengthen compliance and improve the management of tax-related data.

Why Companies in Monterrey Should Pay Attention

Monterrey, as Mexico’s main industrial and nearshoring hub, is home to some of the country’s most advanced manufacturing and logistics operations.

Companies in sectors such as automotive and aerospace face increased scrutiny from the SAT, due to several factors:

• high volumes of cross-border trade;
• complex reporting obligations under the Carta Porte supplement; and
• reliance on CFDI version 4.0 for invoicing.

For these businesses, the challenge goes beyond avoiding audits. They must also meet strict compliance standards to remain eligible for key benefits, such as VAT refunds and nearshoring-related incentives.