Buying a Business in Mexico: Tax Findings That Can Affect the Purchase Price

When a foreign buyer acquires a Mexican company, the target’s tax history comes with it. The Mexican Tax Administration Service (SAT) can review prior years after closing, and any assessment lands on the company the buyer now owns. A tax due diligence review is useful only if its findings reach the deal terms: the price, the protections in the purchase agreement and the actions planned for the first months after closing.

This guide is for foreign buyers, investment committees and corporate counsel. It explains what a buyer inherits under Mexican tax law, how to turn findings into quantified exposures and how to use them in the negotiation. It covers Mexican rules only; the buyer’s home-country treatment and the deal structure should be reviewed with advisers qualified there.

What the buyer inherits: share deal or asset deal

Share purchase. The buyer acquires the shares and the company continues as the same taxpayer. Every open year remains open: the authority’s power to determine omitted taxes generally expires after five years, counted from the day after the annual return was filed, and the period is ten years when the company did not register with the Federal Taxpayer Registry (RFC), did not keep accounting records or did not file a required annual return. Audits suspend the period, so years under review stay open longer.

The new shareholder is not automatically liable for the company’s past taxes. Mexican law makes shareholders jointly liable only in specific cases, such as when the company fails to register, does not keep its accounting records, does not pay over taxes it withheld, or received invoices above a set amount from suppliers on SAT’s definitive list of issuers of invoices for non-existent transactions without correcting its position. Even then, the liability covers only what the company’s own assets cannot cover, up to the shareholder’s share of the capital during the relevant period. The practical risk is economic: an assessment against the company reduces the value of what the buyer paid for.

Asset purchase. Buying assets does not leave the tax history behind if the assets amount to a business. Buyers of a going concern (negociación) are jointly liable for the taxes generated by the activities of that business while it belonged to someone else, without exceeding its value. Since 2022, the law presumes an acquisition of a business in situations such as the transfer of assets or liabilities, or when the two companies share directors or controlling shareholders, legal representatives, suppliers, premises, employees registered with social security, trademarks or fixed assets, unless proven otherwise.

Historical tax exposure: where to look

The scope should follow the target’s business, not a generic list. These areas tend to produce the findings that change the price:

Evidence and quantified findings

A finding is useful to an investment committee only if it can be read as a number with a reason behind it. Each one should state:

1. The fact: what was found, in which year and with which counterparty.
2. The legal basis: the rule that would support an assessment.
3. The open years: whether the authority can still review it.
4. The amount: omitted tax by year, plus an estimate of inflation adjustment, surcharges and penalties, which Mexican law adds to omitted taxes and which depend on dates.
5. The likelihood: a reasoned classification (for example, probable, possible or remote), agreed with counsel.
6. The evidence: the documents reviewed, and those that were requested but not delivered.

A finding that cannot be quantified because information is missing is itself a finding. It belongs in the report with the reason and a proposed treatment, usually a specific indemnity or a condition to close.

Price, protections and post-closing actions

Quantified findings should be mapped to the deal terms before signing, when the buyer still has leverage:

Two points need coordination between the tax and legal teams. First, a contractual indemnity binds the seller, not SAT: the authority will still assess the company, so the indemnity needs collateral and a procedure for handling audits. Second, the survival period of tax warranties should match the years the authority can still review.

After closing, the first actions are administrative: file the RFC notice reporting the change of shareholders, update the company’s records on its ultimate beneficial owners, review the tax mailbox and the status of the digital seal certificate, and complete the evidence file for the open findings.

What may change in 2027

Mexico’s 2027 income tax reform was approved by the Senate on October 27, 2026, with changes, and returned to the Chamber of Deputies; it is not yet law. As proposed, companies with income above MXN 50 million could apply prior-year tax losses against no more than 50% of their taxable profit each year, and the net interest deduction limit would fall from 30% to 20%. A buyer that values the target’s tax losses should model both scenarios until the final text is published in the DOF, Mexico’s Official Gazette.

Hypothetical case

Illustrative example; it does not describe a client or a real transaction.

A US fund plans to buy 100% of the shares of a distributor based in Guadalajara with a branch in Mexico City. The review finds:

• In 2023, the target deducted MXN 6,000,000 in services from a supplier later published on SAT’s definitive list of issuers of invoices for non-existent transactions, and it has no evidence that the services were provided.
• The target reports MXN 20,000,000 in tax losses, and the sale will change who controls it.

The first finding is treated as a specific indemnity backed by an escrow until 2023 is no longer open. For the losses, the review tests the change-of-control rule: if it applies and the target’s income for its last three years is lower than the adjusted amount of the losses, they could only be used against profits from the same line of business. The buyer removes their value from the base price and agrees to pay for it only if a post-closing review confirms they can be used.

Tax due diligence document request list

• ☐Annual and monthly tax returns for the open years, with payment receipts
• ☐Financial statements, trial balances and tax reconciliation for the same years
• ☐Electronic invoices issued and received (CFDI), with a list of the largest suppliers
• ☐Contracts and evidence for related-party transactions and transfer pricing documentation
• ☐Payroll records, withholdings and contracts for specialized services
• ☐VAT refund requests and their resolutions
• ☐Tax loss carryforward schedules and supporting returns
• ☐Audits, assessments, appeals and correspondence with SAT, including the tax mailbox
• ☐SAT compliance opinion and status of the digital seal certificate
• ☐Shareholder register, RFC records and ultimate beneficial owner records

Frequently asked questions

How far back can SAT review a Mexican company?

Generally five years from the filing of the annual return, and up to ten years in specific cases, such as unfiled returns or missing accounting records; audits suspend the period.

Does buying assets instead of shares avoid the target’s tax history?

Not always. If the assets amount to a business, the buyer can be jointly liable for taxes related to that business, up to its value.

Is a tax indemnity in the purchase agreement enough?

It allocates the cost between buyer and seller, but it does not stop SAT from assessing the company. It is only as strong as the seller’s ability to pay, which is why escrows and holdbacks are common.

Scoping a tax due diligence review

The scope of a review should match the target’s size, industry and open years. At Tax Art we can help define that scope with the buyer’s legal team, review the target’s tax position and present findings quantified by year and tax, with recommendations for the price, the purchase agreement and the steps after closing.

Discuss the scope of a tax due diligence review before signing through our Tax Counseling team.

Discuss your due diligence scope

This article is for information only and reflects the rules reviewed as of October 29, 2026. It does not replace an analysis of each transaction or advice on the tax rules of the buyer’s country.