Basic glossary to understand accounting procedures
In many occasions we run into abbreviations that appear on tickets or receipts when paying something, or when creating electronic invoices but you do not know the meaning they have, these are just some of the situations but although there are many acronyms that must be learned to have a better knowledge.
Some of the most basic to be understood are the following:
-
CFDI, Digital Tax Receipt via Internet.
It is an electronic bill model in Mexico in XML format that is characterized by:
- Integrity, the information can not be manipulated or medicated without being detected.
- Authenticity, the transmitter has a digital seal certificate.
- Unique, it has a unique identifier granted by a PAC (Proveedor Autorizado de Certificación) unique for the recipient and the tax administration.
- Verifiable, once a CFDI is issued it cannot be denied that it was created.
2. CFF, Federation fiscal Code.
It is the legal system that contains the fundamental tax concepts, also sets:
- The procedures to obtain tax revenue.
- The manner of execution of tax rulings.
- The administrative resources.
- The system to resolve disputes before the Federal Court of Fiscal and Administrative Justice.
3. DOF, Official Journal of the Federation.
It is the organ of the Constitutional Government of the United Mexican States, which has the function of publishing in the national territory:
- Laws.
- Rules.
- Agreements.
- Mailshots.
- Orders.
- Acts issued by the powers of the Federation.
4. IEPS, Special tax on production and services.
In the case of the sale of gasoline are the manufacturers, producers and importers of this who must pay the tax to the SAT for being those who sell gasoline directly to the stores (gas stations), however the final consumers pay an amount equivalent to the tax on which is part of the final price of the product. In the case of food, it is not applicable to those who only offer food service.
5. IT, the income tax.
This tax is applied directly to sources of wealth, both for natural persons and for legal persons and not only for those who reside in Mexico, since Article 1 of the Income Tax Law stipulates that:
- Mexican residents must pay ISR regardless of “the location of the source of wealth from where they come from”.
- Residents abroad must pay the ISR if they receive income from a permanent establishment in Mexico.
- Residents abroad who receive income from sources of wealth in Mexico must pay the ISR even if they do not have permanent establishments.
6. VAT, the value added tax.
VAT is an indirect tax that is applicable if you sell goods, provide independent services, grant the use or temporary enjoyment of goods or carry out imports of goods or services, the general rate that must be paid is 16%.
7. RFC, Federal taxpayer registration.
It is an alphanumeric key that consists of 13 characters, assigned by the SAT and serves to control the payment of taxes, this key must have both natural persons and moral persons who perform any economic activity. Tax regimes are:
- Wages and salaries.
- Provision of services.
- Tax Incorporation Regime.
8. RIF, Tax Incorporation Regime.
Individuals with little economic and administrative capacity, that is, people who only carry out business activities, sell goods or provide services for which professional title is not required, and their combined income does not exceed 2 million pesos.
9. RMF, Miscellaneous Tax Resolution.
It is a document that is published on an annual basis with the objective that taxpayers can easily understand the rules and articles of the law, so that they can fulfill them efficiently.
10. SAT, Service tax administration.
It is a decentralized body of the Ministry of Finance and Public Credit, which is responsible for applying tax and customs legislation, so that:
- Individuals and corporations contribute proportionally and equitably to public spending.
- Supervise taxpayers to comply with tax and customs regulations.
- Facilitate and encourage voluntary compliance.
- Generate and provide the necessary information for the design and evaluation of tax policy.
Legal and Accounting Consulting in Playa del Carmen
Source of information
