Civil compensation is not a form of VAT payment. A few months ago, in March 2023, when resolving the contradiction of criteria 413/2022, the Second Chamber of the Supreme Court of Justice of the Nation (List of Communications ((scjn.gob.mx)) ruled that based on the interpretation of articles 1, 1-B, 5, 17, and 18 of the Value Added Tax Law (LIVA), compensation, applicable in civil matters, is not a form of VAT payment, nor does it give rise to a request for a refund of the favorable balance or tax credit. Compensation only determines when the VAT obligation arises, but it does not generate its credit, as the VAT must have been effectively paid to the tax authority for that purpose.
Source: ecovis.com
