Partial Payments and Deferred Tax Certificates 

Purpose

In Mexico, you only issue customer invoices when the customer has paid the amount in full.

If a customer makes a partial payment or a down payment, you must provide him with a “deferred tax certificate,” which states how much the amount paid and the tax paid. He uses this certificate when filing a tax return, to substantiate claims for offsetting his input tax against his output tax.

You only print deferred tax certificates for partial payments and down payments that have been cleared against an invoice. You do not prepare them for invoices that have been paid in full, since these are substantiated by invoices.

Process Flow

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       1.      You make a sale, and the accounts clerk enters the customer invoice, using a deferred tax code.

However, he does not send the invoice to the customer. The customer already knows how much he has to pay (for example, from the quotation you gave him).

       2.      The customer makes a partial payment, and the accounts clerk:

                            a.      Records the partial payment in the system, following the standard procedure

                            b.      Transfers the tax from the deferred tax account to the normal tax account

                            c.      Prints a deferred tax certificate for the customer, and sends it to him

       3.      The customer pays the outstanding invoice amount, and the accounts clerk enters the payment in the system, following the standard procedure.

       4.      The accounts clerk:

                            a.      Transfers the tax from the deferred tax account to the normal tax account

                            b.      Prints out the invoice and sends it to the customer