The tax discrepancy before the Tax Administration Service (SAT) refers to the situation in which the tax authorities verify that the expenditures of a person (what you spend) in a calendar year are higher than declared income.
Although this may seem like something positive, since it means that the purchasing power of the person has grown, for Tax authorities it is an alarm signal means that the person is paying an Income Tax (ISR) less than what they should.
To determine the expenditures of a natural person, the tax authorities – in this case the Service tax administration (SAT) – take into account the following elements:
- Costs
- Property acquisitions
- Deposits in bank accounts
- Financial investments
- Credit card deposits
Other income is also taken into account such as donations, prizes and personal loans that exceed 600 thousand pesos.
With all this, the tax authority can make a calculation between income and expenses of the person to determine whether or not they incurred in a tax discrepancy.
Example of a person who falls into SAT tax discrepancy:
A person who declares earning 50,000 pesos before the SAT, who spends 20,000 pesos a month, buys goods for 30,000 pesos, makes an investment of 30,000 pesos and makes deposits on his credit cards for another 20,000 pesos.
As you can see in the previous case, this person would be declaring income of 50,000 pesos a month before the SAT, but he spent 100,000. In this case, The tax authority can ask you to clarify where those extra 50,000 pesos come from.
What happens when the SAT detects a tax discrepancy?
In the event that the Treasury detects that a person’s income does not match what they are paying in ISRthe tax authority may use all the information from files, statements and information from third parties to make a review.
Read more: SAT: Tax mailbox helps to maintain communication with the taxpayer
Once the file is done, The authority will inform the person of the amount of the disbursementsthe information they have to validate that, where they got it from and how much ISR must actually be paid.
After that notification, the person will have only twenty days to write a report in which he argues in detail where these “surpluses” come fromas well as offer evidence that shows that the taxes owed were actually paid.
Read more: Can you have cash at home without declaring before the SAT?
In the event that the person does not verify their income, they would be incurring tax fraud, a crime that has a penalty of 3 months to 5 years in prison.
In case of presenting a verification, but there is a discrepancy, the person must pay the excess ISR and a fineas stipulated by the Article 109 of the Federal Tax Code.
Read more: SAT: You will pay less ISR in 2023 due to high inflation; more will come to your payroll
In conclusion, tax discrepancy is a situation that should be avoided at all costs, as it can have serious legal consequences.
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