ARTICLE 23: HOW AMOUNTS ARE COMPENSATED IN FAVOR

Taxpayers obliged to pay by declaration can only choose to compensate the amounts they have in their favor against those that are obliged to pay by own debt, provided that both derive from the same tax, including their accessories. For this purpose, it will be sufficient to make the compensation of said updated amounts, in accordance with the provisions of article 17-A (CFF: Art. 17A) of this Code, from the month in which the improper payment was made or the declaration containing the balance in favor was presented, until the one in which the compensation is made. Taxpayers who submit the compensation notice must accompany the documents established by the Service Tax Administration (Servicio de Administración Tributaria) through general rules. These rules will also set the period for submitting the aforementioned notice. The provisions of this paragraph shall not apply in the case of taxes that are caused by the importation nor those that have a specific purpose.

Taxpayers who have exercised the option referred to in the first paragraph of this article, who had remnants after compensation, may request a refund.

If the compensation had been made and did not proceed, surcharges will be caused under the terms of article 21 of this Code (CFF: Art. 21) on amounts unduly compensated, updated for the period from the month in which the undue compensation was made until the one in which the amount of the compensation unduly made is paid.

It shall not be compensated the amounts whose return has been requested or when the obligation to return them, or the amounts that have been transferred in accordance with the tax laws, expressly and separately or included in the price, who intends to make the compensation may not have the right to get their refund in terms of article 22 of this Code. (CFF: Art. 22)

The tax authorities may compensate sua sponte the amounts that taxpayers have the right to receive from the tax authorities for any reason, in accordance with the provisions of article 22 of this Code (CFF: Art. 22), even if the refund had been requested or not, against the amounts that the taxpayers are obliged to pay for their own debts or for withholding to third parties when they have been firm for any reason. The compensation may also be applied against tax credits whose payment has been authorized in installments; in the latter case, the compensation must be made on the unpaid balance at the time said compensation is made. The tax authorities will personally notify the taxpayer of the resolution that determines the compensation.