Materiality, economic substance, and the SAT's powers to review your invoices

By SWB · Accounting, tax, and business advisory · November 2026

Since January 1, 2026, the way invoices are reviewed in Mexico has changed. This is not a new formal requirement, like one more field on the receipt. It is a matter of substance: every electronic invoice (CFDI) must be backed by a transaction that really happened and that can be proven. This article focuses solely on that reform, with the detail the subject demands: what materiality is, what economic substance is, what oversight powers the tax authority now has, and what, in practice, you should do to face them.

What changed in 2026

The reform was published in the Official Gazette of the Federation (DOF) on November 7, 2025, and most of its provisions entered into force on January 1, 2026. Its core, as far as receipts are concerned, lies in the Federal Tax Code (CFF).

Article 29-A, section IX, of the CFF provides that CFDIs must support existing, true transactions or real legal acts. If a receipt does not meet that test, the authority may treat it as a false tax receipt and, consequently, as having no tax effects. In other words: it is no longer enough for the invoice to be correctly filled out, with the right data and a valid seal. The invoice has to correspond to something that actually happened.

That does not mean veracity did not matter before. In practice, materiality was already required. What changes in 2026 is that the requirement is now express in the law and, above all, that an abbreviated procedure is created to verify it, with immediate consequences for both the issuer and the recipient of the receipt. That procedure is article 49 Bis of the CFF, explained below.

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Materiality and economic substance: two different concepts

In tax discussions they are used as if they were the same thing, but they are not. It is worth separating them, because the authority reviews both, and the documentation that proves each one does not always coincide.

Materiality is the existence and veracity of the transaction. The question it answers is simple: did this happen? Proving it requires the transaction's trail: what was sold or what service was provided, when, where, who did it, how it was delivered, and how it was paid. A signed contract, on its own, does not prove materiality if nothing behind it shows that the contract was performed.

Economic substance is the real capacity to have carried out that transaction and the economic logic that supports it. The question it answers is: could the issuer have done it, and why did it do it? This covers material capacity, direct or indirect, to provide the service or to produce, market, or deliver the good; the personnel, assets, and processes available; the business reason for the transaction and the economic benefit sought from it. It also covers traceability: that the transaction can be followed, step by step, from the agreement through delivery, payment, and accounting entry.

Concept	Question it answers	What proves it
Materiality	Did the transaction exist and is it true?	Performed contract, deliverables, delivery evidence, emails and records, bank payment
Economic substance	Could the issuer have done it, and why?	Personnel, assets, and processes; direct or indirect material capacity; business reason; economic benefit; complete traceability

An example clarifies the difference. A company invoicing advisory services may have a correct contract and invoice, but if it has no personnel, no documented subcontractors, no deliverables, no work emails, and no evidence that the service was provided, the transaction may fail on economic substance even though the paperwork looks in order. Conversely, a company with real capacity may fail on materiality if it does not keep evidence of a specific transaction: what was delivered, when, and to whom.

Another point worth understanding: coherence among the three pieces. What the CFDI says, what the accounting records say, and what actually happened must coincide. When there are inconsistencies among tax returns, CFDIs, and bank statements, the authority also has grounds to restrict digital seal certificates (CSDs), the certificates used to sign invoices.

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The oversight powers: the article 49 Bis visit

The article 49 Bis procedure is the operational core of the reform. It is an abbreviated CFDI verification procedure, and its logic is as follows: when the authority presumes that issued CFDIs are false, it may carry out a visit to the taxpayer's tax domicile to verify that the receipts support existing, true transactions or real legal acts. Ideally, the invoiced transactions should be carried out at that domicile, or at least it should be possible to demonstrate from there that those transactions occurred.

The procedure, in order, works as follows:

Step	What happens	Deadline
Visit notification	Falsity of the CFDIs is presumed and issuance is suspended, that is, the digital seal certificates are left without effect from the notification	From the notification
Rebutting the presumption	The taxpayer presents evidence that the transaction existed and is true	5 business days
Total length of the procedure	The complete procedure has a maximum duration	24 business days
If the transaction is proven	Permission to invoice is restored	Within 24 hours
If the presumption is not rebutted	The CFDIs are published on the SAT portal and in the DOF, and lose their tax effects	When the procedure concludes

The first row deserves emphasis, because it changes the pace of everything: suspension of the seals occurs from the notification of the visit, not when the procedure ends. In practice, that means 5 business days are not enough to build a transaction's documentation from scratch. The file has to exist before the visit, not after.

What happens if the transaction is not proven: the chain of consequences

The consequence does not stop with the issuer of the invoice. It spreads in a chain, and that is why this subject matters whether you issue or receive receipts.

For the issuer. If the presumption of falsity is not rebutted, its digital seal certificates are left without effect and the transactions covered by those CFDIs produce no tax effect whatsoever. Without valid seals, it cannot invoice.

For the recipient. If a CFDI you received and to which you gave deduction or credit effects is published as false, you have 30 calendar days counted from publication in the DOF to reverse the effects you gave it, normally through an amended return, eliminating the deduction and the credit and paying any resulting tax. If you do not do so within that period, your own digital seal certificate may be temporarily restricted, under article 17-H Bis, section XIV, of the CFF. In other words, a supplier's problem can become your problem if it is not addressed in time.

For new companies. The Code also provides for denial of registration in the Federal Taxpayer Registry (RFC) when the legal representative, a partner or shareholder, or any other person forming part of the organic structure of the new legal entity had its seals left without effect for failing to rebut the presumption of falsity of issued CFDIs, or forms part of another legal entity that did not correct its tax situation regarding false CFDI received. When forming a company, it is worth reviewing the tax history of those who will be part of it.

On the criminal side. Article 113 Bis of the CFF provides a penalty of 2 to 9 years' prison for anyone who issues, sells, buys, acquires, or gives tax effects to false tax receipts, including digital platforms that allow advertisements promoting those activities and anyone who, knowingly, allows or publishes such advertisements by any means. The offense is investigated and prosecuted independently of the status of any administrative procedure that may have been opened. This is the serious extreme of the subject and not the scenario of a company whose transactions are in order but whose paperwork is incomplete; even so, it marks how seriously the authority treats false receipts.

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How to face these developments: one file per transaction

The practical recommendation can be summed up in one sentence: one file per invoice, or per client, put together before anyone asks for it. This is not about keeping papers for the sake of it, but about every transaction having a complete, verifiable story. In chronological order, this is what it should contain:

Before invoicing. Verify that the transaction exists and that you have the capacity to carry it out. Keep the agreement: contract, accepted quote, purchase order, or the equivalent document, with a clear scope of what is sold or what service is provided, who provides it, and on what terms. If the service is provided by a third party, document that subcontracting with the same care.

During the transaction. Keep evidence of performance: deliverables, reports, minutes, emails and work records, photographs where applicable, delivery or acceptance confirmations from the client. This is where materiality is proven: the agreement alone is not enough; you must show that the agreement was performed.

When charging and recording. Keep the payment trail: transfer or bank receipt matching the invoice in amount, date, and counterparty, plus the corresponding accounting entry. Check that what the CFDI says, what your accounting records say, and what happened are the same. Inconsistencies among those three pieces are, on their own, a focus of review.

At your tax domicile. Make sure the transactions you invoice are carried out at your tax domicile, or that you can demonstrate from there how they are carried out. A domicile that corresponds to no real activity is a risk in a verification visit, even if the rest of the documentation is in order.

With your suppliers. Periodically review the CFDIs you receive and treat as deductible. If a supplier is published for false CFDIs, the 30-calendar-day period to reverse effects runs from publication, not from when you learn about it by other means. Keeping track of suppliers and receipts received is not an extra formality: it is how you avoid inheriting someone else's problem.

If you are notified of a visit. Act within the 5-business-day period. Do not wait for the procedure to end before gathering evidence. Present the documentation organized by transaction, with the complete story of each CFDI under review, and keep proof of everything submitted. And if the transaction is proven, verify that your seals are reinstated within the 24-hour period provided.

What not to do. Do not issue invoices for transactions that did not occur, do not buy or accept receipts to simulate expenses or credits, and do not ignore a SAT or DOF publication about a supplier. Each of those paths leads, at best, to losing the tax effects and the seals, and at worst, to the criminal sphere.

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Need help reviewing your transactions?

SWB has spent 20+ years helping entrepreneurs, freelancers, startups, and SMEs stay compliant — without overpaying. If you want to check whether your invoices, contracts, and evidence are ready for a review like the one article 49 Bis provides for, we can help you put that file together before anyone asks for it. Focus on your business; we'll handle the rest.

Message us on WhatsApp: https://wa.me/525621505187 or use the contact form at https://www.swb.com.mx

This article is for informational purposes and does not replace personalized tax advice. Legislation cited reflects current law as of October 27, 2026: decree published in the DOF on November 7, 2025, in force since January 1, 2026, and articles 29-A, 49 Bis, 17-H Bis, and 113 Bis of the Federal Tax Code.