Under Mexican law, as per the Federal Civil Code, the concept of 'compensation' allows the extinction of obligations by offsetting debts between parties that owe each other reciprocally, up to the value of the smaller debt. However, for fiscal debts, compensation is not automatically allowed unless explicitly authorized by law, as fiscal obligations are considered liquid but not always exigible. The law requires debts to be liquid and exigible for compensation to occur, which means their amount must be determined, and payment cannot be legally refused. The suspension of compensation for fiscal purposes in 2019 indicated that compensation of tax balances against different tax obligations was not permitted, aligning with the condition that statutory authorization is a necessary liberal concession by the legislature for such compensation.

The Código Civil Federal explicitly states that compensation cannot take place if the debts are fiscal, unless authorized by law. This limitation is crucial for fiscal policy because it prevents arbitrary or unauthorized offsetting of tax obligations, ensuring that tax revenue streams remain predictable and controlled by legislative approval. This statutory restriction on compensation underscores the government's intent to manage fiscal responsibility and maintain equitable tax compliance, as compensation could otherwise disrupt fiscal receipts if widely applied without oversight. It highlights the balance sought between facilitating taxpayer fairness and assuring governmental financial stability.

The suspension of the "compensación universal" highlights broader issues in the Mexican tax enforcement landscape, such as the tension between taxpayer relief mechanisms and the state's need for revenue stability. This suspension underscores systemic challenges like bureaucratic hurdles within tax refund processes, delaying compensations, and contributing to financial strain for taxpayers. Additionally, it reflects legislative efforts to counteract potential abuses in compensation claims, reinforcing the state's control over fiscal balances while ensuring consistent revenue flows. The suspension exemplifies the dynamic balance between accommodating taxpayer rights and ensuring operational effectiveness within fiscal governance, spotlighting areas in need of reform to enhance efficiency and fairness.

From a legal standpoint, taxpayers seeking to apply their tax credits as compensations face challenges primarily stemming from the lack of inherent 'exigibility' of these credits, which are typically not immediately enforceable claims against the fiscal authority until validated. Furthermore, even when the quantification of credits ensures liquidity, taxpayers must navigate procedural requirements for obtaining authorization from tax authorities, who have broad discretion to accept or deny compensatory applications. The inherent procedural complexity and potential delays act as significant hurdles, given that these credits cannot be automatically offset against other tax debts without explicit legislative or administrative endorsement.

The continuous suspension of the "compensación universal" beyond 2019 could impose considerable financial strain on taxpayers holding tax balances in their favor. It would limit their ability to offset these balances against other tax debts, potentially leading to liquidity issues for businesses that rely on this mechanism to manage cash flow. The measure might also increase the administrative burden on tax authorities, as more taxpayers would likely request refunds directly from the SAT, potentially leading to processing delays and further financial pressure on taxpayers. Various organizations have raised concerns, requesting exceptions for certain sectors to mitigate these impacts.

Under Mexican common law, specifically the Federal Civil Code, debts must be both 'liquid' and 'exigible' to qualify for compensation. A debt is 'liquid' if its amount is determined, while it is 'exigible' if its payment cannot be refused legally. In the context of fiscal debts, these criteria are complicated because tax-related balances are considered liquid as taxpayers determine the amount themselves. However, the exigibility condition is not always satisfied, especially for balances in favor of taxpayers seeking refund, as their repayment can depend on the tax authority's approval, making them not automatically enforceable. Thus, the compensation of fiscal debts generally requires explicit legislative authorization to be valid.

Article 22 of the Código Fiscal de la Federación stipulates that when taxpayers request a refund for tax balances in their favor, the fiscal authority must process the refund within forty days following the receipt of the request. However, this article also allows the authority to verify the compliance and correctness of the tax application before authorizing the refund, during which the balance's exigibility can be questioned. This framework implies that although tax balances may be liquid, their compensational potential is limited by the authority's verification process, often resulting in the absence of immediate 'exigibility', crucial for compensation alongside other tax debts.

The argument that compensating fiscal debts in Mexico is a 'liberal concession' by the legislature is grounded in the fact that automatic offsetting of tax balances against tax debts is not a constitutional right. Instead, it is an instrument uniquely permitted through legislative authorization. This perspective acknowledges that fiscal obligations lack inherent exigibility, making their statutory provision a discretionary relief rather than a fundamental taxpayer right. The legislature's decision to allow or restrict this mechanism reflects policy preferences aimed at ensuring fair tax practices and maintaining fiscal responsibility, aligning with broader legal principles that limit compensation when fiscal debts are involved unless expressly allowed by law.

The "compensación universal" is a mechanism in the Mexican fiscal system that allows taxpayers to recover their debts from tax balances in their favor automatically, by applying them against other taxes that they cause or retain. This mechanism was suspended in 2019, as communicated in a nota ejecutiva, which indicated that taxpayers could only recover tax balances by accrediting them against the same type of tax, compensating them against taxes caused by the own taxpayer, or by requesting their refund from the SAT. The suspension was enacted to ensure that tax debts could not be covered using withheld taxes, following a measure approved by the Mexican Congress and established in Article 25, Section VI of the 2019 Income Law. The suspension aimed to prevent financial disruptions in state revenues by limiting the self-applied cross-compensation of taxes across different tax obligations.

The suspension of the "compensación universal" is believed to potentially cause financial damage to taxpayers primarily due to the prevention of automatic offsetting of tax balances against different tax obligations. This prohibition could lead to liquidity shortages, especially for businesses with significant tax recoverables. As a countermeasure, taxpayer organizations have proposed maintaining compensatory measures for balances existing as of December 31, 2018, and creating specific exemptions for primary sector taxpayers, exporters, and those subject to reduced VAT rates. These suggestions aim to mitigate financial disruptions while addressing sector-specific challenges within the tax framework.