SAT Tightens Refunds and Raises the Evidence Bar for Deductions

Mexico’s tax authority is speeding up data cross-checks and slowing the pace of refunds, raising the level of documentation required to validate individual taxpayers’ deductions.

The Tax Administration Service (SAT) is tightening its validation of deductions and, as a result, the pace of refunds for taxpayers with balances in their favor is clearly slowing. Data reported by the Ministry of Finance and Public Credit (SHCP) show that in 2025 refunds totaled 972.999 billion pesos, a nominal year-over-year increase of 4.0%—well below the gains seen in 2022, when refunded amounts exceeded one trillion pesos and annual growth peaked near 28%.

This shift does not necessarily mean a broad-based refusal to issue refunds, but rather a stricter review of what taxpayers report as deductible. In practice, SAT has refined its cross-checks using Digital Tax Receipts via the Internet (CFDI), bank statements, payment methods, and third-party data to confirm that transactions actually occurred and meet tax requirements. The result is a slower process for some taxpayers, particularly for automatic refunds tied to the annual tax return.

SAT officials themselves have acknowledged that in recent cycles, clarifications and information requests have increased—ranging from incorrectly entered CLABE bank account numbers to discrepancies between the person requesting the refund and the person who made the payment. One recurring issue involves medical expenses: if they are paid in cash, or if the electronic charge does not match the taxpayer seeking to claim the deduction, the deduction may be disallowed and the balance in the taxpayer’s favor may be reduced or put on hold pending clarification.

This tightening is happening amid public finances under pressure from higher spending needs, the financial cost of debt, and a tax enforcement agenda aimed at sustaining revenue without introducing broad new taxes. For the Finance Ministry, closing loopholes for sham activity—including invoices lacking economic substance—has become a central component of protecting tax revenues. For compliant taxpayers, the message is different: documentary evidence and consistent data matter more than ever.

Substance and “extra proof”: the new normal for claiming deductions

The focus is no longer solely on “having the invoice,” but on proving the substance of the transaction—that the service was actually provided or the good was actually delivered. Practically speaking, tax specialists warn that SAT is increasingly willing to request supporting materials when it detects inconsistencies, unusual patterns, or higher-risk vendors. In some cases, beyond the CFDI, relevant documentation may include medical files (diagnoses, test results), proof of services rendered (logs, emails, confirmations), and any backup that links the expense to the taxpayer and to an approved payment method. This shift raises compliance costs—time, recordkeeping, accounting support—but it also aims to reduce improper refunds and simulated transactions that erode the tax base.

Looking ahead to the annual individual income tax return for tax year 2025, expectations in the accounting sector are that granular reviews will continue and that customer service channels for clarifications will become more important. In particular, SAT has strengthened in-person support options to resolve issues ranging from data-entry errors to deductions rejected for failing to meet formal requirements—steps that can help unlock refunds when the taxpayer has complete documentation.

In the short term, a likely effect is that refund flows will be more uneven: taxpayers with consistent information and fully traceable electronic payments may keep relatively smooth processing, while profiles with sensitive deductions (health expenses, professional fees, tuition, donations) or inconsistent CFDIs will face more “pauses” for clarification. At the same time, SAT’s growing sophistication in data analytics—supported by electronic invoicing, pre-filled returns, and third-party cross-checks—will continue pushing enforcement toward more targeted audits.

In perspective, the tightening of refunds reflects a rebalancing between facilitating balances in taxpayers’ favor and safeguarding revenue against the risk of simulated activity. The signal to taxpayers is clear: beyond complying, they must be able to demonstrate—with traceability and sufficient evidence—that each deduction is allowable.