Mexico Supreme Court upholds five-year interest cap on tax refunds

Mexico’s Supreme Court of Justice of the Nation (SCJN) has unanimously ruled that the federal tax authority (SAT) is only required to pay a maximum of five years of interest when issuing tax refunds to taxpayers.

The ruling upholds a paragraph in Article 22-A of the Federal Tax Code (CFF), which stipulates that interest owed by the federal government shall not exceed the amount accrued over the last five years. This decision follows a legal challenge by the company Contactus Intermediación S. de R. L., which sought interest covering 11 years following a dispute over an excess VAT payment from 2013.

In a project approved by Minister Lenia Batres, the Court rejected arguments that the five-year cap constitutes an indirect expropriation of taxpayer funds. The Court clarified that the limit applies specifically to interest as an accessory consequence of delayed refunds, rather than the principal tax balance itself. The ruling states that interest beyond the five-year mark is not considered an enforceable right under the current tax code.