Interview with Mauricio Martínez D´Meza, Partner, Deloitte Mexico

1. What is the most significant change to your region/jurisdiction’s tax legislation or regulations in the past 12 months?

The Judicial Election in Mexico is still the most important legislation passed in the last 12 months. Fifty percent of the available judicial posts (judges, magistrates) and all of the Justices’ positions were subject to a Federal election in June of 2025; the impact on litigation has started to be felt throughout the country.

Although it has not spread into the Latin America region, it is not impossible to envision some other countries implementing something similar in the future.

2. What has been the most significant impact of that change?

A lot of the decisions by the elected judges and magistrates, as well as the Supreme Court’s decisions with its new Justices, have indicated that the criteria have shifted heavily in favor of the Government, as many practitioners foresaw.

3. How do you anticipate that change impacting your work and the market moving forwards?

Tax litigation could become a last resort to resolve conflicts with the Tax Authority in Mexico, and it is likely that negotiations and alternative means of resolution will increase, with the application of mutual agreement procedures  and similar procedures offered by international treaties.

4. How has this changed the way you offer tax advice?

Tax advice can no longer rely on past judicial decisions, as it is not clear that the new judges and magistrates will follow the same criteria, so measuring the risk of a proposed tax structure/advice has become more delicate. Sophisticated tax advice needs to allow for possible differences of interpretation, requiring negotiation to resolve the matter, should the tax authority question it.

5. What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?

As some Latin American countries move to the right side of the political spectrum, tax reforms of the main taxes are expected to be implemented to cover the Federal Budget. In the case of Mexico, the Government does not envisage a comprehensive tax reform anytime soon; however, measures are being taken to increase and strengthen formal controls and the Tax Authorities’ capacities to audit taxpayers. 

6. What are the potential outcomes that might occur if those changes are implemented?

Latin American countries are expected to rely more on tax collection as opposed to incurring further debt. In the case of Mexico, the Government will still have to incur debt to finance the Federal budget, as social support plans are not being phased out, but are being extended. Mexico’s public debt sits at an all-time high, exceeding 50% of the Gross Domestic Product.

7. Do you think that change will have a positive effect on both your practice and the wider regional/jurisdictional market?

Coming back to the Judicial Reform in Mexico, it has already made the tax controversy practice move into more services related to negotiating settlements before going to Court and being more involved in tax audits at their inception, rather than getting involved when the audit is getting closer to being finished.

8. Are there any regulatory/legislative changes you believe should be implemented in your region/jurisdiction?

Yes. The Mexican President has recently introduced a bill to postpone the rest of the Judicial Reform (only 50% of the posts were up for election in 2025, and the rest were supposed to be elected in 2026), since the reaction to the newly elected judicial officials has been mostly negative.

9. How do you believe those changes would help improve the tax landscape in your market?

Judicial decisions would become more predictable, thereby giving taxpayers greater legal certainty.

10. What sort of issues surrounding the implementation of AI have you seen, and how will AI implementation likely affect your work?

Tax controversy services are primarily influenced by AI from an efficiency perspective. Research and drafting of documents should become more agile and effective. Also, AI analysis of applicable precedents should become faster and more comprehensive, freeing up space for lawyers to analyze strategy better and faster.

11. How would you describe the tax authorities’ approach in your region/jurisdiction?

We are observing a trend of heightened scrutiny from the tax authorities, who have enhanced enforcement measures and increased focus on substantiation and documentation, with a very detailed stance on information verification. This approach has had as a consequence that, in recent weeks, a group of MNCs (mainly based in the US) sent a letter to the Mexican President stating their concern that the tax authorities may be crossing a line in terms of what and how much they are assessing tax-wise and how the Mexican Courts are solving tax controversies, vis-à-vis the Judicial reform.

 

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