The COVID-19 pandemic is causing a steep drop in revenues for Mexican companies during fiscal year 2020, which will also result in decreased net income and, in many cases, negative cash balances. Mexican companies will need to keep a close eye on their cash flow and analyze strategies and options to improve their cash balances. One strategy that should be considered involves a reduction of estimated income tax payments, paid on a monthly basis to cover the total annual income tax incurred. The estimated income tax payments for 2020 are being calculated based on an amount of net income that is potentially too high, compared to the likely net income that will actually be received this fiscal year. Article 14 of the Mexican Income Tax Law provides that in order to exercise this option, companies must notify Mexico’s tax authority during the second half of the fiscal year (July to December). The estimated payment for July must be paid by August 17th. The deadline to give notice of the request for a reduction in payment is one month prior to the due date of the estimated tax payment. For example, notice must be filed by July 15, 2020 for it to apply with respect to the payment corresponding to the month of July 2020.Pursuant to Annex 1 of the 2020 Miscellaneous Tax Resolutions the tax authority must respond to the request within three months. Approvals to decrease estimated income tax payments are authorized through a resolution issued by the tax authority.With the current health emergency till in place, it has become easier to explain the reasons for requesting a decrease in estimated payments, considering that companies are experiencing lower income this year as compared to prior years. Companies pursuing this strategy should prepare support documents based on annual budgets, adjusted with the actual balances for the first half of 2020, along with the information estimated for the second half of 2020, to justify a decrease in the estimated income tax payments for the second half of the year.