Scope of a Domiciliary Verification by the Tax Administration Service

The tax address is really important, because this entity generates the main relationship held between the taxpayer and the treasury, since it is the place where the authority not only will notify several acts and administrative resolutions that may affect the assets of a company or an individual who carries out business activities but also at random can perform a domiciliary inspection to check the proper compliance with tax obligations of taxpayers.

That is why; based on Article 42, section V of the Federal Tax Code, the tax authority has the power to carry out the inspection of the taxpayer’s tax domicile, in order to corroborate several data, namely:

1. That the tax domicile is located at the address with which it registered before the Federal Taxpayers Registry or, where appropriate, the last address that appears in the tax inspector’s system.

2. Confirm if indeed in the tax domicile, is where the main business establishment is located.

3. The issuance of tax receipts.

4. That said tax domicile has the infrastructure or material capacity to carry out its economic activity.

5. That it has the assets and personnel to be able to provide the services, produce, market or deliver the goods that cover the issued tax receipts.

However, if the tax authority, when carrying out the domiciliary inspection, notices that the taxpayer is not located or, where appropriate, does not have the necessary elements to carry out the activities, it is fully authorized to cancel digital stamps, a situation that produces a detriment to the company or individual’s assets by virtue of the fact that it could not issue tax receipts, in the worst case the Tax Administration Service can presume the simulation or non-existence of operations, which would start the procedure envisaged in Article 69-b of the Federation’s Fiscal Code.

That is why the importance and relevance of properly addressing a tax domiciliary inspection, by virtue of the fact that ignorance of information or, as the case may be, incorrectly answering questions made by the tax authority would lead to the conclusion of factual situations that are not real, so it is recommended to have adequate advice to avoid contingencies that affect the taxpayers’ assets.