Collected Tax Nexus in Mexico: What to Do If You Collected VAT Without Being Registered

If your business collected VAT from customers in Mexico before you were properly registered, you are not alone, and there are clear steps to resolve it. This article explains your options and how to move forward.

Understanding the Situation

Collected tax nexus occurs when a business charges customers VAT without being registered to collect it in Mexico. In most cases, if you were collecting VAT on sales into Mexico, you were likely already required to be registered. The good news is that Mexico's tax code provides a structured path for resolving this.

Your Options

There are two ways to address collected tax nexus in Mexico:

Option A: Register Retroactively and Pay

This is the most straightforward path for businesses that have been collecting VAT and simply need to formalize their standing with SAT.

Steps to take:

1. Apply for an RFC through SAT. Foreign businesses without a permanent establishment in Mexico can apply under the "extranjero sin EP" category.

2. File all back returns, going back up to five years if needed.

3. Flag your initial back filings as "pago espontáneo" (spontaneous payment). Under Article 73 of Mexico's Código Fiscal de la Federación (CFF), this designation eliminates the fine for failing to register on time.

4. Pay any applicable surcharges. As of 2025, the surcharge rate is approximately 1.47% per month.

What this achieves: Your registration is formalized, your back obligations are cleared, and you avoid the RFC non-registration penalty by filing voluntarily before SAT contacts you.

Option B: Refund Customers and Register Going Forward

If you prefer not to remit the incorrectly collected VAT to SAT, you can instead return it to your customers and cancel the original invoices.

Steps to take:

1. Issue CFDI credit notes to each affected customer. The corrected invoice should reflect zero tax.

2. Return the VAT amount to the customer.

3. If your business activities now meet any nexus triggers, such as storing inventory in Mexico, importing goods, or selling digital services, you must still register going forward.

Important note: Even if your sales were exempt (and therefore you had no obligation to collect VAT), the act of collecting it anyway can create collected tax nexus. Option B addresses that scenario as well.

After Resolution

Once you have addressed the back-tax situation, ensure your business is properly registered and filing monthly going forward. If you are not yet registered or are unsure which registration type applies to your business, see our related article on VAT registration in Mexico.

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