ISR TAX REFUND SECURED FOR A CLIENT COMPANY — TP Legal Obtains a Favorable Ruling After More Than 3 Years of Tax Litigation —

A TP Legal client company requested from the SAT (Mexico's Tax Administration Service) the refund of a 2016 fiscal year Income Tax (ISR) credit balance of over $7.3 million pesos. The authority improperly resolved the request, deeming the company to have withdrawn (desistida) its application — a resolution that, on its face, would have allowed the company to simply refile the request curing the cited defects, but that in reality exposed it to losing its right to the refund through the statute of limitations, since the five-year deadline to claim it was nearly up. Given this, we chose a conservative defense strategy: litigate the improper withdrawal through every available forum, rather than risk our client's substantive right.

The path through more than three years of litigation:

• The risk of the “shortcut”: Curing the withdrawal and refiling the request seemed like the simplest path, but it would have meant restarting the process just as the right to the refund was about to lapse — a risk we decided not to take.

  
  

• First victory, annulment “for effects”: The Federal Court of Administrative Justice (TFJA) declared the challenged resolution void, ordering the SAT to weigh all of the evidence submitted and rule on the merits of the refund, without invoking the statute of limitations.

  
  

• Not satisfied despite winning, amparo lawsuit: Considering that ruling still insufficient, we filed a direct constitutional appeal (amparo directo); the competent Circuit Court found it well-founded, ordering the TFJA to set aside its ruling and issue a new one, with full jurisdiction, to rule directly on the company's substantive right.

  
  

• Final ruling: In compliance with that ruling, the TFJA recognized the company's subjective right to the refund of its ISR credit balance, and ordered the tax authority to return it, together with the corresponding adjustments and interest, and thanks to the latter, the final refund amount exceeded 19 million MXN.

This case confirms that, when facing an irregular ruling from the tax authority, the fastest path is not always the safest one.

If your company faces a similar situation —a refund request denied, deemed withdrawn, or improperly resolved— the TP Legal team can provide comprehensive, professional advice and support you through the corresponding defense process.