Taxes in Mexico: In what cases is a CFDI not needed to deduct an expense?

For an operation to have a tax-deductible effect for Income Tax purposes or to be eligible for crediting for Value Added Tax (VAT) purposes, it is necessary to prove that the operation took place.
To this end, tax regulations require that the tax receipt (CFDI) meets all the requirements set forth by the Federal Tax Code (CFF). Article 29 of the CFF imposes the obligation on taxpayers to issue CFDIs for the acts or activities they carry out or for the income they receive.
However, there are specific rules that allow some taxpayers to deduct certain expenses that are permitted without having the corresponding tax receipt, namely:
– Exchange loss: There is a right to reduce it, but no receipt is required (Article 8, Income Tax Law -LISR-).
– Annual inflation adjustment (Articles 25, Section VIII, and 43, Section II, second paragraph, LISR).
– Loss due to fortuitous event or force majeure (Article 25, Section V, LISR).

Can expenses be deducted without receipts?
There are also other concepts that can be deducted without necessarily having the corresponding receipt. These arise from the economic activities of taxpayers, such as the processing, transformation, and industrialization of their products or commercial practices, where the legislator or the tax authority itself recognizes that obtaining a receipt is complicated. As a result, they provide certain facilities to allow taxpayers to deduct certain expenses without requiring the respective receipts.
Below are several of these facilities:
– Primary sector: Taxpayers can deduct the sum of expenses related to the labor of temporary agricultural workers, livestock feed, and minor expenses, up to 10% of their total income, not exceeding $800,000.00, provided they meet certain requirements, but without the need for a CFDI (Administrative Facilitation Rules).
– Leasing by individuals: Taxpayers can opt for the so-called «blind deduction,» which allows them to deduct up to 35% of their income instead of following the deduction rules established by the Income Tax Law (LISR) with the respective CFDIs.
Although the aforementioned concepts do not require a CFDI, taxpayers must have documentation supporting the activities carried out and the respective accounting records. Each of these concepts must be essential for the taxpayer’s activities, and this last point should be interpreted in line with the specific purposes of each business.