Input VAT Paid through Compensation Not Deductible in Mexico

The Mexican Federal Civil Code provides that the compensation is a valid mean to terminate civil obligations. Accordingly, output VAT is chargeable if the price of a given good or service is paid through compensation; it was a commonly accepted standard that input VAT was deductible as well, if the corresponding price was offset. Nevertheless, the Mexican Supreme Court of Justice ruled that the input VAT, in order to be deducted, has to be paid in cash.

Authors

Publication Details

Journal
International VAT Monitor
Published
2025-05-16
DOI
https://doi.org/10.59403/360391m
Primary Topic
Taxation and Compliance Studies
Type
article
Field-Weighted Citation Impact
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article

Input VAT Paid through Compensation Not Deductible in Mexico

P. Ramírez Morales
International VAT Monitor
Taxation and Compliance Studies
article

Input VAT Paid through Compensation Not Deductible in Mexico

P. Ramírez Morales
article en

Abstract

The Mexican Federal Civil Code provides that the compensation is a valid mean to terminate civil obligations. Accordingly, output VAT is chargeable if the price of a given good or service is paid through compensation; it was a commonly accepted standard that input VAT was deductible as well, if the corresponding price was offset. Nevertheless, the Mexican Supreme Court of Justice ruled that the input VAT, in order to be deducted, has to be paid in cash.

International VAT MonitorVol. 36(3)
Openalex Percentile: Top 85%
Taxation and Compliance Studies
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Input VAT Paid through Compensation Not Deductible in Mexico — P. Ramírez Morales · International VAT Monitor (2025) | TGRS Research Map | TGRS