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Introduction
Each year, the Tax Administration Service (SAT) publishes the criteria on improper tax practices, formerly known as “Non-Binding Criteria,” as part of Annex 3 of the Miscellaneous Tax Resolution (RMF) for fiscal year 2026, published in the Official Gazette of the Federation on December 28, 2025, in accordance with Article 33, section I, subsection h) of the Federal Tax Code (CFF), in relation to rule 1.4., section III of the RMF.
Although these criteria do not constitute mandatory provisions for taxpayers, their analysis is relevant because they reflect the tax authority’s interpretative position regarding certain transactions and compliance schemes. Consequently, they represent a useful tool for identifying potential areas of risk and strengthening tax control mechanisms within organizations.
Main Criteria on Improper Tax Practices (PI) Observed by the SAT
The Criteria on Improper Tax Practices are pronouncements issued by the SAT through which the authority identifies conduct, interpretations, or schemes that, in its view, deviate from the purpose or proper application of tax provisions. Their purpose is to provide guidance to both taxpayers and tax advisors regarding practices that may be challenged during the exercise of the authority’s audit and verification powers.
Although they are not legally binding, these criteria constitute a relevant reference for understanding the authority’s tax enforcement approach and anticipating potential contingencies arising from tax positions considered aggressive or inconsistent with the regulatory framework.
Main Criteria on Improper Tax Practices (PI) Observed by the SAT
The following summarizes certain criteria that are relevant for companies. This selection is not intended to replace a full review of Annex 3, but rather to identify key areas of attention that should be incorporated into the annual tax compliance program.
Federal Tax Code (CFF)
1/CFF/PI. Delivery or availability of the Internet Digital Tax Receipt (CFDI). The authority considers it improper to comply with the obligation to deliver the CFDI when the issuer merely provides a link or electronic address for consultation, without effectively making it available to the recipient.
2/CFF/PI. Disclosure of generalized reportable schemes. It is considered an improper practice to report as customized reportable schemes those that, due to their characteristics, should be disclosed as generalized reportable schemes.
3/CFF/PI. Avoidance of the effects of the temporary restriction or cancellation of the Digital Seal Certificate (CSD). This criterion seeks to prevent mechanisms or structures intended to allow a taxpayer to continue operating for tax purposes despite the temporary restriction or cancellation of the certificate.
Income Tax (ISR)
1/ISR/PI. Permanent establishment. This criterion emphasizes the obligation to properly assess the existence of a permanent establishment in Mexico when foreign-resident entities carry out activities within Mexican territory.
3/ISR/PI. Reserves for pension or retirement funds. It clarifies that returns generated from the investment or reinvestment of these reserves do not meet the requirements to be considered deductible.
4/ISR/PI. Royalties for intangible assets originated in Mexico. The authority challenges structures through which royalty payments are made to foreign-resident related parties for intangible assets whose value was generated in Mexican territory.
6/ISR/PI. Expenses on behalf of third parties. This criterion establishes that expenses incurred for the benefit of third parties are not deductible when such parties do not maintain an employment relationship with the taxpayer nor provide professional services to the taxpayer.
17/ISR/PI. Subcontracting and salary withholding. This criterion focuses on practices related to noncompliance with obligations to withhold and remit ISR, as well as the use of documentation intended to improperly evidence such compliance.
20/ISR/PI. Losses from the disposal of shares. It recalls the obligation of controlling companies to recognize as taxable income and pay the deferred ISR arising from losses that reduced the consolidated tax result.
26/ISR/PI. Payment of salaries and salary-equivalent income through unions or service providers. The authority maintains a restrictive position regarding schemes that use intermediaries for the payment of compensation and compliance with labor and tax obligations.
27/ISR/PI. Financial leasing. This criterion emphasizes the proper application of provisions related to the deduction of investments made through financial lease agreements.
33/ISR/PI. Recognition of unique and valuable contributions. This criterion highlights the need to properly identify and value unique and valuable contributions within transfer pricing analyses, particularly in transactions entered into with related parties.
34/ISR/PI. Modifications to the value of related-party transactions within the interquartile range. The authority clarifies its position regarding transfer pricing adjustments made within the interquartile range and the requirements for properly supporting such adjustments.
42/ISR/PI. Amounts granted to employees charged to pension plans. The authority considers it improper to use pension plans to provide compensation to active employees that, in substance, constitutes taxable salary. In these cases, the payments are not exempt for the employee, nor are the contributions made to the plan deductible for the employer.
43/ISR/PI. Amounts delivered to employees, partners, or shareholders as labor incentives, bonuses, commissions, or compensation paid through third parties. The authority clarifies that payments made through associations, companies, or other intermediaries do not alter the tax nature of the income. Consequently, such items remain subject to the corresponding ISR, the disbursements made to the third party are not deductible, and the VAT charged on such transactions is not creditable.
Value Added Tax (IVA)
9/VAT/PI. Improper VAT Credit. This guideline reinforces the need to maintain sufficient documentation to substantiate the substance of transactions, compliance with formal requirements, and the link between the tax credit and taxable activities.
11/IVA/PI. Acquisition of goods located in national territory and owned by foreign residents. This criterion emphasizes the proper determination of VAT withholding obligations and the need to adequately document the economic and tax substance of the transactions.
Main Risks for Companies
Failure to address these criteria may increase companies’ exposure to reviews, audits, invitation letters, information requests, or assessments of tax differences, and may have direct consequences, including:
- Imposition of fines and penalties.
- Inadmissibility of VAT credits or challenges to credit balances.
- Imposition of Fines and Penalties.
- Assessment of tax liabilities.
- Reputational risks, especially in sensitive or recurring transactions.
- Determination of Tax Credits.
Practical Recommendations
To mitigate these risks, we recommend that companies incorporate the review of Annex 3 into their annual tax compliance and internal control calendar:
- Prepare an annual exposure matrix by applicable criterion, identifying transactions, internal owners, supporting documentation, materiality, and corrective actions.
- Conduct periodic internal reviews of CFDIs, deductions, credits, payments abroad, subcontracting, compensation schemes, union payments, tax incentives, and related-party transactions.
- Document the business reason, contracts, deliverables, evidence of substance, internal approvals, tax analyses, and accounting support for each relevant transaction.
- Continuously train the accounting, tax, and finance teams on regulatory changes.
- Involve management, the audit committee, or the board of directors in a timely manner when high-risk transactions or significant amounts are involved.
Conclusion
The SAT 2026 Criteria on Improper Tax Practices constitute a relevant reference for assessing organizations’ tax exposure. Although they are not mandatory for taxpayers, they reflect the authority’s interpretative position and, therefore, their analysis makes it possible to strengthen compliance, anticipate contingencies, and adopt internal control measures that contribute to a more robust and transparent tax management approach.
Author: C.P. Beatriz Adriana Cardona Briseño
