Major amendments in proposed “tax reforms” by the Executive, and its final approval by Congress.
VALUE ADDED TAX
(VAT)
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Executive Proposal
|
Chamber of Deputies verdict
|
Senate verdict
|
|
Apply the general rate of VAT (16%) to the
following acts or activities:
- Foreign public land
transport people
- Chewing gum
- Sale of pets and pet food
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Approved
|
The Senate
approved the package in the same terms as the House
|
|
Standardize the VAT rate across the
country, so it eliminates the rate of 11% in the border area
|
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Taxing 16% temporary imports, including
those made by maquiladoras and IMMEX
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Apply the general rate of VAT (16%) to the
following acts or activities:
- Sale and lease of
homestead
- Interest on mortgage loans for house room
- Payments of tuition
- Public shows
- Sale of gold jewelry, gold, artistic or
ornamental pieces and ingots, minimum content of the material is 80%
of this metal
|
Rejected
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INCOME TAX (ISR)
|
Executive Proposal
|
Chamber of Deputies verdict
|
Senate verdict
|
|
Apply the rate of 32% for individuals with
annual incomes of more than 500,000 pesos
|
Approve the following rates apply:
- 31% for incomes between $
500,000 and $ 750,000
- 32% between $ 750,000 and
$ 1'000, 000
- 34% for income between one and up to three
million
- 35% from three million
pesos
|
Approve the following rates apply:
- 30% for annual incomes up to $ 750,000
- Other items are kept in the terms approved
by the Chamber of Deputies
|
|
Eliminated the simplified scheme for the
agricultural sector
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They rejected the removal of this regime for
the primary sector, without specifying the treatment of investments in fixed
assets, deferred charges and expenses
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Approved as an expense deduction, the
expenditures made for the acquisition of fixed assets, deferred charges and
expenses. It also forces taxpayers of this sector to register the RFC
|
|
It limits the deduction of benefits (which
are exempt income for the worker) to 41% of the total paid
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Deductible percentage was increased to 47%
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Although generally keeping the deductible
percentage of 47%, in those cases where employers do not diminish the
benefits granted during the year in question, with respect to those granted
in the previous year may deduct up to 53%
|
|
Includes Incorporation Scheme for taxpayers
with incomes up to 1 million pesos and a retention period of six years
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Is amended income cap to 2 million pesos
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The period during which they may remain in
the scheme will be 10 and 6 years as originally proposed
|
|
Eliminate the deduction of purchases at
restaurants
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The deduction will be up to 8.5% of the
amount of consumption
|
Senators approved these changes in the same
terms as the House
|
|
Paying income tax on the sale of house room
when the sale price exceeds 250,000 UDI
|
It increases the amount of the exemption to
UDI 700,000
|
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It limits the amount of personal allowances
to 2 SMG annually or 10% of the taxpayer's income, whichever is less
|
It increases the exemption amount to 4 SMG
annually or 10% of the taxpayer's income, whichever is less
|
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Condition the deductibility of food stamps
that these are delivered through electronic card
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Approved
|
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Taxing profits obtained in the Mexican
Stock Exchange with 10%
|
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Eliminate Tax Consolidation Regime
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Delete the immediate deduction of
investment
|
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Limit to $ 200.00 per day the amount
deductible for car rental
|
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Limit to $ 130,000.00 the amount deductible
on auto investment
|
|
It eliminates the deduction of social
security contributions paid by the employee when they are absorbed by the
employer
|
|
Deduction is conditioned food coupons as
these are delivered through electronic purses
|
|
Eliminates Small Taxpayers Regime
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Special Tax on Production and Services (IESPS)
|
Executive Proposal
|
Chamber of Deputies verdict
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Senate verdict
|
|
N / A
|
Approved a tax of 5% on
junk food
|
Increases the rate of 8% applicable to junk
food IESPS
|
|
Apply a fee of one peso
per liter to the sale and import of sugary drinks
|
Approved
|
The Senate approved these reforms in the
same terms as the House
|
|
Impose a tax on fossil
fuel sales (average $ 70.00 per ton of CO2)
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It modifies the applicable
rate (average $ 39.80 per ton of carbon)
|
|
IESPS levy sales of
pesticides
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Decreased the rate
proposed by the Executive
|
OTHER CHARGES
|
Executive Proposal
|
Chamber of Deputies verdict
|
Senate verdict
|
|
Flat Tax Repeal
|
Approved
|
The Senate approved the package in the same
terms as the House
|
|
Repeal the IDE
|
|
Create a special law on
mining, to be taxed at a rate of 7.5% the positive
difference between the income resulting from the sale of the extracted and
allowable deductions
|
Approved
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It retains the right in
the same terms, but states that the proceeds thereof are distributed as
follows: 50% to cities where they settle mines, 30% state and 20% to the
federation
|
Price Waterhouse Coopers
Mexico 2014
Tax amendments
Executive Summary
In October 31, 2013, the Mexican Congress approved a
number of tax amendments for the 2014 period, which are yet to be published in
the Official Gazette. Most of those amendments will go into effect on January
1, 2014.
As a result of the different measures approved, the
federal government expects to receive revenue of $4.4 trillion pesos, which is
12.82% above the 2013 revenue budget.
The 2014 Federal Revenue Law estimates an average
peso/dollar exchange rate of $12.90, inflation of 3%, and average price of $85
per barrel of crude oil, 3.9% growth in the Gross National Product (GNP),
internal and external indebtedness of up to $570,000 million of pesos and
$10,000 million dollars, respectively, accounting for the equivalent of 16% of
total budgeted revenue. Estimated revenue arising from taxes, Social Security
dues and government fees rose 6.25, 4.76 and 2.5% respectively over 2013. The
principal increases are seen in a hike of 153% in excise tax and 23% in income
tax.
The tax amendments are aimed at boosting tax revenue,
focused mainly on strengthening the income tax base, which had been eroded over
the last few years by a number of incentives for investment, savings and
support for specific sectors.
The result of the tax amendments coincides with the
commitments signed by the Federal Executive in December 2013 in the Pact for
Mexico as concerns strengthening the State’s financial capacity and conducting
a comprehensive revision of the policy for subsidies and special regimes with a
view to establishing an efficient, transparent and progressive system.
Following
is a summary of the main amendments:
Income Tax Law
Business entities
A new Income Tax Law has been approved, which
eliminates the judicial and administrative resolutions pertaining to the law in
effect up to 2013. The Regulations to the Income Tax Law will remain in effect
to the extent that they do not conflict with the new law.
Tax regimes and deductions that have been eliminated
The new Income Tax Law eliminates, among others, the
following tax regimes and deductions:
1. The tax consolidation regime, although a new regime
has been created for corporate groups wishing to defer income tax over a
maximum of three years.
2. The simplified regime, although the following two
regimes have been created:
• Coordinated (truckers)
• Agricultural, cattle breeding, forestry and fishing
operations
3. Small Taxpayers and Intermediate individuals,
although a mechanism has been created for gradual incorporation into the
general regime.
4. The special regime for Real Estate Investment
Companies
5. The immediate deduction of fixed asset investments,
the deduction of Social Security dues payable by the worker and absorbed by the
employer, the 100% deduction of expenses incurred in the preoperating period in
the mining sector and global preventive reserves for credit institutions.
The additional tax on dividends
Residents abroad and Mexican individuals will be
subject to an additional 10% tax on dividends paid from profits generated as
from 2014, payable via withholding by the paying entity; considered a
definitive payment.
This additional tax will also be paid by Mexican
individuals receiving dividend payments from companies resident abroad.
Changes to special regimes and authorized deductions
The new Income Tax Law changes the treatment for the
following tax regimes and deductions:
1. The maquiladora regime
2. The maximum amount deductible for restaurant
expenses is 8.5%, $200 daily for leases, $130,000 for investments in
automobiles, and 53% and 47% for contributions to pension
and retirement funds and exempt salaries paid to
workers.
3. Employment of senior citizens is entitled to an
additional deduction of 25% of salaries paid.
4. Capital gains on sales through the Stock Exchange
are subject to 10% tax.
The taxable base for Employees’ Statutory
Profit-Sharing (ESPS)
The only differences between the tax base for income
tax and ESPS are:
1. ESPS paid in the period
2. Amortized tax losses
3. 47% or 53% of nondeductible exempt salaries
4. Historic depreciation for fixed assets deducted
immediately in prior periods.
Individuals
1. The tax rate applicable to individuals is increased
by adding three brackets. i.e., 32%, 34% and 35% for annual income starting at
$750,000, $1 million and $3 million pesos, respectively.
2. Total personal deductions are limited to the lesser
of an amount equivalent to four annual general minimum wages for the geographic
area of the taxpayer ($94,462.80) and 10% of the overall income of the
taxpayer, including exempt income. Donations are not included in that limit.
Tuition fees will continue to be deductible through the existant Presidential
decree, thus will not be subject to this limit either.
3. Exempt income from the sale of a home is reduced to
700,000 UDIS (previously 1,500,000 UDIS), which amounts to approximately 3.5
million pesos
Value Added Tax Law
Operations conducted in the border zones are subject
to the general 16% rate, which is also applicable to the sale of pets and pet
foods, chewing gum, intercity bus transportation and temporary imports.
Excise Tax Law
1. Nonstaple foods (snacks, candy, chocolate and cocoa
derivatives, flans and puddings, sweets made from fruit and vegetables, peanut
and hazelnut butters, sweets made from milk, foods prepared with cereals and
ice cream, sherbet and popsicles) whose caloric density is 275 kcalor more per
100 g, are subject to the 8% rate.
2. Rather than decreasing, as contemplated in the 2010
law, the rates on the sale or importation of alcoholic beverages and beer are
as follows:
a) Up to 14° GL - 26.5% rather than 25%
b) Up to 20° GL - 53% rather than 50%
3. The sale and importation of flavored beverages,
insecticides, fossil fuels and high-calorie foods are subject to the tax.
4. Taxpayers are required to design a security code
for cigarette packages.
Federal Tax Code
Tax mail box
The tax authorities may notify taxpayers of any action
or resolution by means of an electronic mail box.
Digital Tax Invoices
All operations must be supported by means of a Digital
Tax Invoice by Internet (DTII), which eliminates all other means of invoicing,
including payroll payments.
Flat Tax Law and Cash Deposit Law
Both the flat tax and the cash deposit tax have been
repealed. However, entities belonging to the financial system must report
annually on cash deposits received by taxpayers in accounts opened in their
name when the total amount exceeds $15,000 per month.
Following are the most significant amendments approved
by
the legislative power:
Income Tax Law
Entities
As concerns deductions:
Contributions to pension funds and exempt salaries
Contributions made to pension and retirement funds as
well as disbursements for remunerations qualifying as exempt income for the
employee (welfare dues, savings funds, severance pay, annual bonuses, overtime,
vacation and Sunday premium, among others) are deductible at the rate of 53%.
The deduction is 47% when the taxpayer reduces exempt employee benefits from
one year to the next.
The payment of deductions
Deductions exceeding $2,000 paid via electronic fund
transfer must be made from accounts in the name of the taxpayer.
Salary payments exceeding $2,000 must be made through
the financial system
Payroll and fee receipts
Payroll and fee payments are only deductible if
supported by a DTII.
100% immediate and straight-line deduction
Machinery and equipment for generating electric power
from renewable sources or from efficient electricity cogeneration systems, as
well as facilities for special-needs persons, continue to be entitled to the
100% straight-line deduction. Otherwise, the immediate deduction of fixed
assets and the straight-line deduction of investments in special machinery and
equipment has been eliminated.
The deduction of automobiles
The deduction for investments in automobiles has been
brought down to $130,000, and the deduction for leased automobiles has been
reduced to $200 daily per unit.
Investments made prior to December 31, 2013 and not
yet entirely deducted that date may continue to be depreciated considering the
original amount of the investment to be up to $175,000, in the terms of the
prior Income Tax Law.
Social Security dues
Social Security dues payable by employees but paid by
the employer are no longer deductible.
Items that must be donated before they can be
destroyed
Prior to destruction, all items that are basic for
human subsistence in the areas of food, clothing, housing and health must be
donated, provided their sale, supply or use is not prohibited or some other use
has not been determined for them.
Donations
The deductibility limit for donations remains at 7% of
the tax profit or taxable earnings for the period, for both entities and
individuals; any donations made to the federal government, federal entities,
municipalities and their decentralized organisms may not exceed 4% of said
profit or earnings.
Food coupons
Food coupons provided to the personnel are deductible
when delivered in the form of smart cards authorized by the Revenue
Administration Service (SAT).
Restaurant expenses
The deduction of restaurant expenses has been reduced
to 8.5% of the amount disbursed, provided the payment is made via electronic
means.
Cost of sales
Direct cost and the valuation method of first-in-first
out (FIFO) have been eliminated for determining cost of sales, and no
transition regime has been announced.
Real estate developers
Taxpayers engaged in the construction and sale of real
estate developments, which exercise the option to deduct the cost of acquiring
land and fail to sell that land within a period of three
years following acquisition must include the value of
deducted land (restated) in their taxable income in the fourth period, plus 3%
for each year elapsed.
Mining exploration expenses
Exploration expenses incurred in locating and
quantifying new deposits in preoperating periods may be deducted at the rate of
10% per year, which eliminates the possibility of deducting them in the year in
which they are incurred.
Deduction of salaries paid to senior citizens
Employers may get an additional deduction of 25% of
salaries paid to personnel 65 years old and up.
Special regimes:
The regime for cooperatives producing/rendering
goods/services
There is no change in the tax regime applicable to
Cooperatives Producing/Rendering Goods/Services comprising only partners and
individuals. Income tax on their operations must be determined as per the
procedure established for individuals engaged in business and professional
operations. However, tax payment can be different up to a maximum of two
periods.
A transitory provision establishes that tax deferred
in periods preceding 2014 must be paid in the tax period in which the tax
profit is distributed to the partners.
Real estate companies (SIBRAS)
The tax regime applicable to SIBRAS has been
eliminated and their stockholders’ must include the profit on the sale of items
contributed in their taxable income on the date on which the shares of the
SIBRA are sold or on which it sells said items, either proportionately or on
the overall shares or items.
The remainder not recognized in the terms of the
preceding paragraph must be included in taxable income at December 31, 2016.
The simplified regime
The simplified regime has been eliminated. However,
two special regimes will be in place for the primary sector and for truck
freight service, which, generally speaking, continue to provide the same
benefits, with certain modifications, principally:
1. Coordinated entities managing and operating fixed
assets and land directly or indirectly related to freight or passenger
transportation may continue to comply with their tax obligations through the
entity, on the basis of the rules for individuals engaged in business
operations. The tax authorities may grant facilities of an administrative and
evidence of compliance facilities of up to 4% of their income, and as concerns
the evidence of compliance facility, it may be established that tax not
exceeding 17% must be withheld from amounts disbursed.
2. Agricultural, cattle breeding, forestry and fishing
activities, applicable to taxpayers engaged exclusively in that sector, with
tax determined as follows:
a) Entities will have an exemption on an amount
equivalent to 20 times the general
minimum wage for the geographic area corresponding to
the taxpayer, calculated per year
for each member, not to exceed 200 times the general
minimum wage for the Federal
District.
b) Individuals will have an exemption of an amount
equivalent to 40 times the general
minimum wage for the geographic area corresponding to
the taxpayer, calculated for the
year.
c) Entities and individuals with income of up to an
amount equivalent to 423 times the
general minimum wage for the geographic area of the
taxpayer, calculated for the year,
will have the aforementioned exemptions, as well as a
reduction of tax on the excess, i.e., 40% for individuals and 30% for entities,
that is to say, they will apply the effective tax rate of 21%.
d) Individuals and entities with income exceeding an
amount equivalent to 423 times the
general minimum wage for the geographic area of the
taxpayer, calculated for the year,
apply the above-mentioned exemption and the tax deduction
and must determine and pay tax at the rate of 30% or at the rate applicable for
calculating tax payable by individuals.
As concerns deductions:
Installment sales
Beginning in 2014, the proceeds of installment sales
may no longer be included in taxable income as they are collected.
For installment sales made at December 31, 2013,
taxpayers may continue to include income in taxable income as it is collected,
in which case, tax must be paid in two equal parts: 50% in the period in which
income is included in taxable income and the remaining 50% in the following period.
Calculating the profit on the sale of shares
The procedure for determining the profit on the sale
of shares becomes general. That is,
stockholders holding shares up to 12 months have the option
to calculate the tax cost considering the proven acquisition cost, minus reimbursements
and dividends paid.
General matters:
The taxable base for ESPS purposes
The taxable base for calculating ESPS is the tax
profit for income tax purposes, with the
following adjustments:
1. ESPS paid and tax loses amortized are not
subtracted.
2. Nondeductible exempt salaries (47% or 53%) and the
historical tax depreciation that would have arisen had the immediate deduction
not been applied to fixed assets in periods preceding 2014 are eliminated.
Beginning balance of the capital contributions account
The beginning balance of the capital contributions
account is the amount determined at
December 31, 2013.
Beginning balance of the after-tax earnings account
(CUFIN)
A transitory provision establishes that for periods
from 2001 to 2013, after-tax earnings must be determined as per the Income Tax
Law in effect at such tax period.
The provision does not specify the mechanism for
determining CUFIN for periods from 1975 to 2000, which could mean the loss of
all right.
Charitable entities
The list of activities that can be engaged in by
charitable entities authorized to receive
donations is extended.
Civil entities or associations engaged in teaching
activities and those organized for sporting purposes
In order to be considered not subject to income tax,
civil entities and associations engaged in teaching activities must secure and
maintain an authorization to receive deductible donations and sporting
associations recognized by the National Sports Commission must be members of the
National Sports System in the terms of the General Physical Culture and Sports
Law.
Recoverable asset tax (AT)
Taxpayers having paid asset tax from 2004 to 2007 that
they have not yet recovered may request a refund to the extent that they
actually pay income tax, in the terms of the third transitory article of the
Flat Tax Law published on October 1, 2007.
I.2 Tax consolidation
The new Income Tax Law eliminates the tax
consolidation regime under the following
scenarios:
1. The regime remains in place for groups that opted
to consolidate as from 2010 and have therefore been consolidating for less than
five years.
2. Groups that have been consolidating for more than
five years must deconsolidate and have three options for determining and paying
deferred tax.
3. Opt for a new regime
Following are the features of each of the
aforementioned scenarios:
Continuation of the tax consolidation regime
The new Income Tax Law establishes that groups
authorized at December 31, 2013 to
determine a consolidated tax result in the terms of
the Income Tax Law in effect up to
December 31, 2013 and are within the term of five
years mentioned it article 64 of that law, may continue to determine tax as per
the provisions contained in Chapter VI of Title II of the repealed law during
the years remaining of that five-year period.
Year in which consolidation began 2010 2011 2012 2013
Last year of consolidation 2014 2015 2016 2017
Until they complete the aforementioned term, those
groups will continue to be entitled to the following benefits
1. Immediate application (in the year in which they
arise) of the tax losses of the controlling
and the controlled companies of the group against the
tax profits of other companies of the group, thus streamlining cash flows as a
result of deferring the payment of income tax at the group level.
2. Deferral, over a period of five years, of income
tax on dividends not arising from the CUFIN, paid among the companies of the
consolidating group.
3. Calculating the tax cost of shares of the
controlling company considering consolidated tax results, which generally means
an increase in the cost of shares.
Once the five-year period established in article 64 of
the Income Tax Law has elapsed, the controlling company must determine deferred
tax as per either of the two provisions contained in section XV of the ninth
transitory article of the new Income Tax Law, and pay income tax by the
following deadlines as from conclusion of the five-year period:
1. 25% in May of the first tax period
2. 25% in April of the second tax period
3. 20% in April of the third tax period
4. 15% in April of the fourth tax period
5. 15% in April of the fifth tax period
The tax to be paid (with the exception of the first
25% of deferred tax) must be restated.
Procedures for determining the tax arising from
deconsolidation
The transitory provisions contemplate the following
optional procedures for calculating tax on group deconsolidation:
1. Applying the deconsolidation rules contained in
article 71 of the 2013 Income Tax Law.
2. Applying the optional procedure established in
section XV of the ninth transitory article of the new Income Tax Law.
3. Calculating, for the periods from 2008 to 2013, tax
deferred in the terms of article 71-A of the Income Tax Law in effect up to
2013 and paying that tax by the deadlines established in that law.
Alternatives 1 and 2 for determining tax resulting
from deconsolidation consist of recognizing the effects in the 2013 period by
filing an amended return, considering the following items:
1. Special consolidating items
2. The unamortized tax losses of the controlled
company and the unamortized individual tax losses of the controlling company.
3. Losses on the sale of shares
4. Dividends distributed among companies of the group,
not arising from the CUFIN
5. The difference between the consolidated CUFIN and
the individual CUFINs of the controlled and controlling companies.
6. Recoverable asset tax
The procedures for calculating deferred tax as per
alternatives 1 and 2 above differ in that under alternative 1, all the above
items are included in the 2013 tax result, while under alternative 2, only the
first three items are included and the tax on dividends and CUFIN differences
are calculated separately.
Special consolidating items
A controlling company with special consolidating items
prior to 2002 arising from the sale of shares, land and fixed assets among the
companies of the group may pay the respective deferred tax when the items
giving rise to those items are sold to parties outside the group.
Dividends not paid from the CUFIN
The controlling company need pay no tax on dividends
paid among companies of the group prior to January 1, 1999, even when not
arising from the CUFIN.
Furthermore, the group may opt for tax on CUFIN
dividends not paid from 2002 to 2013 to be paid by the controlling company that
distributed the dividends or profits, no later than the fifth month following
the month in which deconsolidation occurs (May 2013).
In the latter case, a controlled company may credit
dividend tax against income tax payable for the period and the two following
periods, in the terms of section I of article 10 of the Income
Tax Law in effect as from January 1, 2014 and must
recognize the effect in the balance of the CUFIN at January 1, 2014. On the other
hand, the company receiving the dividend may increase its CUFIN balance by the
restated amount of the dividends or profits on which tax has been paid.
In order to take that option, the controlling company
must notify the SAT by the last day of February 2014 in a free-form statement
containing the name of each of the companies that will be making the tax
payment, the amount of the dividend or profit and the respective tax on each,
as well as the name of the company or companies that have received the dividend
or profit in question and will be increasing the balance of their CUFIN as a
result of taking that option.
CUFIN differences
For the purpose of the CUFIN differences, only the
individual balances of the controlling and controlled companies are considered,
as well as the consolidated CUFIN, arising from January 1, 2008 to December 31,
2013.
The aforementioned items need not be included in the
deconsolidation calculation when the controlling company has already paid
deferred tax on those items or when that tax is still pending because it is
subject to the payment schedule established in article 4 of the transitory provisions
of the 2010 Income Tax Law or article 70-A of the Income Tax Law.
Lastly, the controlling company must add (to income
tax determined on the deconsolidation) deferred tax arising from comparing the
CUFIN and reinvested CUFIN balances for the periods from 2004 to 2007 on which
it has opted to defer determination and payment of the respective tax.
Deadlines for paying the tax
The tax resulting from deconsolidation must be paid to
the tax authorities as follows:
1. 25% no later than the last day of May 2014
2. 25% no later than the last day of April 2015
3. 20% no later than the last day of April 2016
4. 15% no later than the last day of April 2017
5. 15% no later than the last day of April 2018
That tax (with the exception of the first 25%) must be
restated for inflation.
Additionally, taxpayers which at December 31, 2013 are
subject to the payment schedules contained in the fourth transitory provision
for 2010 or article 70-A of the Income Tax Law in effect up to December 31,
2013 must continue paying tax deferred under consolidation in 2007 and
preceding years, as per the aforementioned provisions, until completing payment
according to the specified schedule.
Asset tax
The following is applicable to both the controlling
and controlled companies as concerns asset tax payable by the controlling
company as a result of deconsolidation and recoverable tax:
1. The controlling company must determine asset tax
payable by subtracting asset tax paid by its controlled companies (recoverable)
from consolidated asset tax paid in prior periods (recoverable). The tax
payable is the amount by which the controlled companies’ recoverable tax exceeds
consolidated recoverable tax.
2. The tax may be paid in installments as specified in
article 70-A in effect in 2013, rather than the month following
deconsolidation.
3. The controlling company must provide the controlled
companies with a certificate that will allow them to recover the respective
asset tax.
A new optional regime for groups of companies
The tax consolidation regime will be replaced by a new
optional regime under which tax
payment is partially deferred over a three-year
period.
Each company will determine its tax on the basis of an
consolidated tax result factor. That factor is determined by dividing the
consolidated tax result by the sum of the consolidating portion of the positive
tax results of the companies of the group.
The consolidated tax result for the period is
determined by adding the tax results of the
companies of the group and subtracting the tax losses
of the remaining companies of the group (all in the consolidating portion).
The consolidating portion is determined as follows:
1. The consolidating portion of the controlled
companies is the average daily direct or indirect shareholding of the
controlling company in the controlled companies during the period.
2. For the controlling company, the consolidating
portion is 100%
The controlling and controlled companies must pay
restated deferred income tax on the same date on which they are required to
file the return for the period following that in which the three-year period
concludes.
Requirements for controlling companies
A controlling company opting for this regime must:
1. Be an entity resident in Mexico
2. Directly or indirectly hold more than 80% of the
voting shares of one or more controlled companies.
3. In no case may more than 80% of their voting shares
be directly or indirectly owned by one or more companies, unless those
companies are resident in the country with which Mexico has signed an exchange
of information agreement.
A transitory provision of the law establishes that the
controlling company has until December 31, 2014 to ensure that it directly or
indirectly holds 80% of the voting shares of one or more controlled companies
in order to remain within the optional regime.
If that percentage is not complied with by December
2014, the controlling company must see that the company in question is
withdrawn from the regime (considering the withdrawal date to be January 1,
2014), and the controlling company is required to pay deferred income tax in provisional
payments for the period, plus restatement and surcharges calculated as from the
date those payments should have been made to the date on which they are
actually made.
As concerns groups consolidating at December 31, 2013,
the controlling company must file a notification by February 15, 2014 advising
the authorities that it will opt for the new regime.
Any companies holding tax losses unamortized at
December 31 may join the new regime but may not apply said losses.
Groups not consolidating at December 31, 2013 must
file a request by August 15, 2014 to join the new regime, in which case, they
may opt to apply the regime as from 2015.
International operations
Tax treaties
In order to apply the benefits contained in the tax
treaties as concerns operations carried out between or among related parties,
the authorities may request the party resident abroad to demonstrate the
existence of juridical double taxation in the form of a sworn statement.
Limitation on deductions
In line with the recommendations issued by the
Organization for Economic Cooperation and Development as concerns Base Erosion
and Profit Shifting (BEPS), the following assumptions have been included under
which a number of disbursements are not deductible.
1. Interest, royalty or technical assistance payments
made to a party resident abroad that controls or is controlled by the taxpayer,
when:
a) The company receiving the payment is considered to be
transparent, except when the operation is carried out at market value and its
stockholders or associates are subject to income tax on income received through
the company located abroad.
b) The payment is considered to be nonexistent for tax
purposes in the country in which the foreign party is located.
c) The foreign company receiving the payment does not
consider it to qualify as taxable
income.
2. Payments that are also deductible for a related
party resident in Mexico or abroad, unless the related party includes income
generated by the taxpayer in its own taxable income, in that period or in the
following period.
Crediting income tax paid abroad
The mechanism for determining creditable tax in Mexico
on income arising from a source of wealth located abroad is restated in order
to resolve a number of matters that were uncertain or not regulated.
Creditable tax is calculated by:
1. Separating transactions by country of origin of the
income.
2. Identifying the periods in which distributed
profits arose, in the case of dividends. If those periods are not identified,
the first profits generated will be the first distributed.
Tax that cannot be credited because authorized limits
have been exceeded is not deductible.
For that purpose, income tax is the tax established by
the SAT in general rules or included in tax treaties.
Tax withholding on payments made to parties resident
abroad
General withholding rates
In a number of cases, the tax withholding rate
applicable to payments made to parties resident abroad is referred to the
maximum rate applicable to individuals. tax should therefore be withheld at the
35% rate rather than the previously applicable 30% rate.
Interest paid to banks
The 4.9% income tax withholding on interest paid to
foreign banks resident in countries with which Mexico has signed a tax treaty
continues in effect for the 2014 period.
The Department of Finance will no longer hold a
register of banks, financing entities, pension and retirement funds or
investment funds located abroad, which means that that requirement
is no longer applicable in order to be entitled to the
reduced rate.
Royalties
Proceeds from the sale of certain goods or rights
(brands, patents, formulas, among others) only qualify as royalties when the
price is determined on the basis of productivity, use or subsequent disposal.
The foregoing provides greater certainty to taxpayers, as that situation was
already contemplated in the Miscellaneous Tax Resolution.
Leasing of containers and trailers
The 5% withholding is applicable provided the
containers, trailers and semitrailers have been temporarily imported for a
month in the terms of the Customs Law. Otherwise, the
withholding rate will be 25%.
Pension and retirement funds located abroad
The minimum period for the use or lease of land and
constructions built thereon has been increased from one to four years, so that
pension and retirement funds located abroad will be exempt from capital gains
tax on the sale of goods.
It should be remembered that when pension and
retirement funds take part as stockholders of business entities and at least
90% of their income arises from the sale or lease of real estate in Mexico, the
business entities are exempt from income tax to the extent of the fund’s shareholding.
When determining the aforementioned 90% of income, the
annual inflation adjustment and the exchange gain arising from debts incurred
in order to acquire or secure income from leasing real estate in Mexico are not
included.
Passive income arising in tax havens (REFIPRES)
And the case of REFIPRES, the definition of passive
income is extended in order to include income arising from the sale of real
estate and from the leasing of goods and goods received at no charge.
The tax regime for dividends
Individuals and parties resident abroad are subject to
an additional 10% tax on dividends or earnings distributed by Mexican companies
or permanent establishments located in Mexico.
The tax must be withheld by the companies distributing
the dividends, and is considered to be a definitive tax payment.
Furthermore, individuals receiving dividends from
companies located abroad are required to pay an additional 10% tax no later
than the 17th of the month following that in which the dividends are received.
In order to ensure that the aforementioned tax is
applicable only to profits arising as from 2014, the entity or permanent
establishment is required to maintain the CUFIN balance with earnings generated
up to 2013, and open up an additional CUFIN account to record earnings generated
as from 2014. When those two accounts are not handled separately or when the aforementioned
earnings are not identified, the earnings distributed are understood to be generated
as from 2014.
The wording of the rules is unclear, as they make
mention of “earnings generated”, which could be used to identify both tax and
book earnings, thus giving rise to a number of different interpretations. It
will therefore be necessary for the tax authorities to clear up this matter in the
form of miscellaneous rules.
Individuals
The maximum marginal rate for individuals with annual
income exceeding $750,000 is
increased to 32%. The 34% rate will apply to income
exceeding $1 million, and the 35% rate to income exceeding $3 million,
General provisions
The exemption on the sale of a home is reduced to
700,000 UDIS ($3,492,000), even when the taxpayer has lived in that home for
more than five years and that exemption has not been applied in the most recent
five-year period.
Tax discrepancy
A tax discrepancy procedure has been established for
cases where it can be demonstrated that disbursements made by an individual
during any given calendar year exceed the income declared or the income that
should have been declared. For that purpose, disbursements are considered to be
expenses incurred, the acquisition of goods and deposits made into bank accounts
and financial investments and credit cards, when made by individuals not
registered at the tax office, or by individuals registered at the tax office
that fail to file the required tax returns or that file tax returns declaring
income of less than the aforementioned disbursements.
Income from business and professional activities, the
incorporation regime
The so-called incorporation regime replaces the
intermediate regime and the small taxpayer regime (REPECOS).
This regime applies only to individuals engaged in
business activities who sell goods or render services not requiring a
professional degree or whose annual income does not exceed $2 million.
The regime is temporarily applicable over a period of
up to 10 years, after which taxpayers will be subject to the general regime for
individuals engaged in business operations. Taxpayers subject to this regime
are required to make provisional tax payments every two months.
Taxpayers will be entitled to a 100% income tax
reduction during the first year, which will be gradually reduced by 10% in each
subsequent year until it reaches 10% in the 10th year.
Leasing income
Taxpayers receiving only leasing income not exceeding
10 general minimum wages calculated for the month (approximately $19,428) may
make quarterly provisional tax payments.
The annual tax return
The deduction of medical, dental and hospital fees as
well as of obligatory school
transportation services must be made by check or
electronic fund transfer from the taxpayer‘s accounts or credit, debit or
service card, although this requirement is not applicable when payments are
made in towns or rural areas lacking financial services.
When determining the amount of deductible real
interest, total loans received per home is limited to 750 thousand UDIS
(approximately $3,741,000 pesos).
Total personal deductions to be taken by taxpayers,
including incentives for personal savings accounts, may not exceed the lesser
of an amount equivalent to four general minimum wages, calculated for the year,
for the geographic area of the taxpayer (approximately $94,550) and 10% of the
taxpayer’s overall income, including that on which no tax is paid.
Informative returns
Informative returns for the 2013 period must be filed
by February 15, 2014. The following informative returns and certificates of tax
withholding must continue to be filed in the terms of the repealed Income Tax
Law up to December 31, 2016.
Certificates of tax withholding:
1. Payments made to parties resident abroad and to
establishments located abroad of Mexican credit institutions.
2. Wage and salary payments Informative returns
reporting on:
1. Tax withheld from individuals rendering
professional services, leasing real estate or
receiving prizes.
2. Loans made to parties resident abroad
3. Clients/customers and suppliers
4. Tax withheld on payments made to parties resident
abroad, from the parties to which said payments are made.
5. Donations made
6. Wages and salaries
The Financial Sector
Following are the principal amendments affecting the
financial sector, both as concerns
income tax and value added tax (VAT).
The Income Tax Law
Profits on the sale of shares through a stock exchange
Individuals resident in Mexico and abroad are subject
to tax on the profit from the sale of the shares of Mexican and foreign
business entities, certificates of deposit for those shares and capital
derivative financial operations (DFOs) referred to shares and share indexes
carried out through stock exchanges or Mexican derivatives markets, equivalent
of 10% of the profit.
Individuals resident in Mexico must determine tax
payable for the period in a tax return to be filed together with the annual
return. The annual tax on profits, including profits generated at foreign stock
exchanges or markets related to shares of Mexican companies, is definitive.
Losses arising from the sale of shares and DFOs on a
stock exchange or derivatives market may be subtracted from profits arising in
the period or in the following 10 periods.
In the case of parties resident abroad, the
intermediary must withhold tax on the profit arising from each transaction,
without deducting losses.
Tax need not be withheld, provided the party resident
abroad provides the intermediary with a sworn statement specifying that he/it
is a resident of a country with which Mexico has signed a current tax treaty.
In order to determine the profit or loss on the sale
of shares, the acquisition cost may be
considered, plus commissions paid, restated for
inflation. In the case of shares acquired prior to 2014, rather than the
acquisition cost plus the commission paid on the purchase, the average of the
most recent 22 closing prices of the shares may be considered, unless they are
unusual due to the value, number or volume of operations as compared to the
preceding six months, in which case, the average for the preceding six months
may be used.
This regime applies only to profits which were income
tax exempt up to 2013, that is to say, to the sale of shares or DFOs pertaining
to instruments placed among the general investing public acquired or sold
through stock exchanges or recognized markets when the securities sold in one or
several simultaneous operations in no case represent more than 1% of the
outstanding shares of the issuing company.
Intermediaries involved in the sale or operation must
calculate the profits or losses and advise their clients so that they can pay
the respective tax.
Deduction of doubtful accounts
Banks may no longer deduct the creation of or
increases in the global preventive reserve. They may only deduct doubtful
accounts when the portfolio is written off, as per the provisions established
by the National Banking and Securities Commission (NBSC).
However, doubtful accounts arising from the creation
of or increase in global preventive
reserves that have been deducted by the bank in the
terms of the 2013 law are not deductible.
In that regard, banks must control the balance of the
global preventive reserve at December 31, 2013 so that cancellations of the
reserve not corresponding to write-offs ordered or authorized by the NBSC are
included in taxable income.
Excess global preventive reserves still undeducted at
December 31, 2013 may:
1. Be subtracted from the taxable income specified in
the preceding paragraph.
2. Be deducted in each period up to the amount of the
difference between 2.5% of average loans
for the period and the losses arising from
uncollectible loans deducted in the period,
although this in no case implies duplication of the
deduction.
Once excess global preventive reserves have been
deducted, the bank may deduct quit claims, pardons, rebates and discounts on
current loans, as well as losses on the sale of the portfolio and payments in
kind, except those conducted between related parties, provided this does not give
rise to a double deduction.
Withholding interest
Entities of the financial system will continue to
withhold income tax on interest, multiplying the capital giving rise to that
interest by the factor approved by Congress (0.60 for 2014).
Consequently, the tax withholding procedure on yields
arising from investments administered by financial entities approved by
Congress in 2010 will never go into effect.
The Value Added Tax Law
Financial entities considered for the VAT exemption
Interest collected and paid by Cooperative Savings
& Loans, Popular Financial Entities,
Community Financial Entities, Federal Government
Economic Promotion Trusts and the
decentralized organisms of the Federal Public
Administration in financing operations will also be exempt from VAT, except
those arising from loans made to certain individuals.
Calculating VAT for Sofomes
Multiple Purpose Financial Entities (SOFOMs) which
according to the Income Tax Law form part of the financial system must
determine the VAT credit factor not identified with exempt and taxed operations
in the same way as all other financial sector entities.
Information on cash deposits
Financial entities will continue to inform the SAT
annually, by February 15 of each year, of parties making cash deposits
exceeding $15,000 per month into the different accounts administered by those
entities, as established in the repealed Cash Deposit Tax Law.
The tax regime for in-bond manufacturers
(maquiladoras)
The maquila principal resident in a country with which
Mexico has signed a double taxation treaty will not be considered to have a
permanent establishment in Mexico as concerns maquila operations when
maquiladoras determine their profits as per the”Safe Harbor” rules (6.9% of
assets or 6.5% of costs and expenses).
The taxpayer may arrange an advance pricing agreement
(APA) with the tax authorities.
However, it is not entirely clear whether or not this
prevents the party resident abroad from being considered to have a permanent
establishment in Mexico.
The new Income Tax Law defines the “maquila operation”
concept and establishes the
condition that income associated with production
operations must arise entirely from maquila operations in the terms of the
Decree for the Promotion of the Manufacturing, Maquiladora and Exportation of
Services Industry (the IMMEX Decree). It is understood that all goods processed,
repaired and sold in Mexico must be exported (including virtual exports).
Furthermore, the principal resident abroad must own at
least 30% of the machinery and
equipment used in the maquila operation. However,
maquiladoras operating uner an IMMEX authorization prior to 2010 are not
granted release from this requirement, as they currently are by a
grandfathering rule contained in the IMMEX Decree.
The elimination of the current Income Tax and Flat Tax
laws effectively cancels the tax
reduction benefits granted by presidential decrees.
Which The SAT will publish rules for certifying companies concerning proper
control of temporary imports. Beginning in the year following publication of
these rules, temporary imports made under the IMMEX decree and other similar
programs will be subject to 16% VAT, although certified companies need not
disburse that tax.
Likewise, the 16% VAT rate must be paid on the sale of
goods by a party resident abroad to a maquiladora. The tax must be withheld by
the maquiladora and, in principle, may be credited in the month following that
in which the tax is paid.
Maquiladoras will no longer withhold VAT from domestic
suppliers. This could negatively affect their cash flow.
Parties resident abroad with shelter maquila
operations in Mexico will continue to be entitled to protection from being
considered to have a permanent establishment, for a maximum period of four
years.
The optional regime for groups of companies is not
available to maquiladoras.
The tax situation of maquila companies must be
reviewed in detail to determine whether or not they comply with the new
requirements.
Value Added Tax Law
Elimination of the preferential rate in the border
zones
Operations conducted in border zones will be subject
to the general 16% rate, which will give rise to a number of implications, from
adjustment of accounting and invoicing systems to the financial effect of
channeling greater cash flows for the payment of the tax.
Taxed operations
The following operations will now be subject to VAT
payment:
1. The sale of:
• Dogs, cats and pets
• Chewing gum
• Pet food
Items subject to the strategic bonded warehouse
customs regime
2. The rendering of the following services:
• Public passenger transportation, except services
provided in urban, suburban and metropolitan areas.
• Hotel service rendered to foreigners coming into
Mexico to take part in congresses, conventions, exhibitions and fairs.
Tax refunds
VAT refunds, discounts or rebates must be supported by
a document containing information on the invoice covering the original
operation.
Excise Tax Law
Wines, spirits and beer
The rate applicable to the sale or importation of
alcoholic beverages or beer containing alcohol remain at 53% and 25.5%,
respectively
Taxed operations
Beginning in 2014, the following operations will be
subject to VAT payment:
The sale or importation of:
1. Nonstaple foods (snacks, candy, chocolate and cocoa
derivatives, flans and puddings, sweets made from fruit and vegetables, peanut
and hazelnut butters, sweets made from milk, foods prepared with cereals and
ice cream, sherbet and popsicles) whose caloric density is 275 kcal or more per
100 g, are subject to the 8% rate.
The SAT will publish a list of staple food products.
2. Flavored and energizing beverages, as well as
concentrates, powders, syrups, essences or flavor extracts used in preparing
beverages, when they contain added sugar, at the rate of $1 per liter, with the
exception of:
a) Milk, in any presentation.
b) Oral saline solutions and serum, as well as
flavored beverages registered as medications.
c) Beverages sold in restaurants, bars and other
similar establishments.
3. Pesticides - Depending on the level of toxicity as
per NOM-232-SSA1-2009, can be taxed at the 9%, 7% or 6% rate.
4. Fossil fuels (propane, butane, gasoline and jet
fuel, turbosine and other types of kerosene, diesel, fuel oil, coke made from
oil or carbon, carbon and others) except natural gas and crude oil – via rates
applied by unit of measure (per liter and per ton).
Government mining fees
The following new fees apply to the mining industry:
1. A tax of 7.5% on the positive difference between
income arising from sales related to mining and the deductions permitted by the
Income Tax Law, not including deductions on investments (except those involved
in mining prospecting and exploration), interest payable and the annual
inflation adjustment.
2. A 50% tax additional to the maximum rate charged on
the basis of hectares included in the mining concession, for concession holders
not conducting demonstrable exploration and exploitation work over a continuous
two-year period. Beginning in the 12th year, the additional tax will be
increased by 100%.
3. A tax of 0.5% of income arising from the sale of
gold, silver and platinum, based on the argument of the environmental erosion
resulting from mining activities.
Federal Tax Code
Tax domicile
When individuals fail to specify their place of
business or home as their tax domicile or cannot be located by the authorities
at the domiciles provided by them, the domiciles provided by the individual to
financial entities or savings and loans will be used as the tax domicile.
Certificates of advanced electronic signature and
digital seal
Certificates of advanced electronic signature and
digital seal issued by the SAT will be
canceled when the tax of warrantees:
1. Determine that taxpayers have failed to file three
or more periodic consecutive tax returns or six nonconsecutive tax returns in
any given tax period.
2. Cannot locate the taxpayer or the taxpayer
disappears during an administrative law
enforcement action.
3. Become aware that invoices issued were used to
cover nonexistent, simulated or illicit operations.
Tax mail box
Individuals and entities registered at the tax office
will be assigned a tax mail box on the SAT webpage which the tax authorities
can use to notify the taxpayer of any action or resolution, including those
with recourse, and on which taxpayers are required to file requests or notifications
and to comply with official requests for information.
That provision will go into effect for business
entities on June 30, 2014 and for individuals on January 1, 2015.
Means of payment
Checks on the same bank at which the payment is made,
as well as electronic transfers and credit or debit cards are considered valid
for the payment of taxes and government fees;
certified checks have been eliminated.
Joint liability
Partners and shareholders are considered to be jointly
liable for tax incurred by the entity when the tax debt cannot be secured with
the assets of the entity, and exclusively when the entity:
1. Fails to register at the Federal Taxpayers’
Registry (RFC).
2. Changes its domicile without filing the respective
notification:
3. Fails to keep accounting records, conceals or
destroys them, or vacates its tax domicile.
The liability may not exceed the partner or
stockholder’s interest in the subscribed capital stock of the entity at the
time the tax is incurred, multiplied by the omitted tax; applicable to partners
or stockholders that have or have had effective control of the entity.
Executors or representatives of the succession are also
jointly liable for tax incurred and not paid during the period they hold
office.
TAX REGISTRATION NUMBER
A notification of change in tax domicile must be filed
within 10 days following the date on which the change is made.
Accounting
For tax purposes, the accounting records consist of
accounting systems and records, working papers, the official books, statements
of account, special accounts, inventory control and valuation method,
electronic tax equipment or systems, and all documentation pertaining to compliance
with tax obligations and attesting to income and deductions.
Taxpayers must provide the tax authorities with
documentation attesting to loans made or received. Taxpayers must also enter
their accounting records into the SAT webpage on monthly basis.
Digital Tax Invoices:
Only electronic invoices (CFDI) are accepted; all
other types of invoices have been eliminated.
The informative return reporting on the tax situation
Taxpayers subject to the provisions of Title II of the
Income Tax Law which have declared taxable income of $644,599,005 or more in
the immediately preceding tax period; taxpayers whose shares have been placed
among the general investing public and on stock exchanges; business entities
operating under the optional tax regime for groups of companies; and parastate
entities of the Federal Public Administration, among others, must file an
informative return reporting on their tax situation by June 30 of the year
immediately following the close of
the period in question.
The option to have the financial statements audited
In 2015, individuals engaged in business operations
and business entities which in the
immediately preceding period have received taxable
income exceeding $100 million, taxpayers the value of whose assets exceeds $79
million or which have employed at least 300 employees in each of the months of
the immediately preceding period may opt to have their financial statements
audited by an authorized public accountant. Said option is not available to
parastate entities of the Federal Public Administration.
In order to exercise this option, the income tax
return filed in the terms established in the law must specify that the option
is to be taken.
The audit report issued by the registered public
accountant must be filed no later than June 15 of the year immediately
following the end of the year in question.
In those cases, the requirement to file an informative
return reporting on the tax situation is considered to be complied with.
Obligations of financial entities and savings and
loans
Financial entities and savings and loans must
demonstrate to the SAT that their account
holders are registered at the tax office, and must
provide their nationality, country of
residence, place and date of birth, as well as the tax
ID number in the case of parties resident abroad, and when applicable, the CURP
(universal unique identifier).
The faculties of the tax authorities
The tax authorities may generate a tax registration
number on the basis of the information contained in the CURP (universal unique
identifier) in order to facilitate registration.
Enforcement measures
When the startup or implementation of an official
review is in any way prevented or impeded, the tax authorities may resort to
enforcement measures, applied strictly in the following order:
Requesting the assistance of law enforcement agents,
imposing fines, seizing goods or the business, requesting the competent
authorities to proceed with an official order due to disobedience or resistance.
Attachment prior to judgment
The authorities may attach the goods or the business
of the taxpayers or jointly liable parties up to the provisional amount of tax
debts presumed, and must issue an itemized report specifying the reasons for
said attachment, which must be delivered to the taxpayer.
The authorities may also sieze amounts contained in
the individual retirement savings account consisting of voluntary and
complementary contributions exceeding 20 minimum wages, calculated for the
year.
Tax audits
The tax authorities will be empowered to conduct
electronic reviews based on an analysis of the information and documentation
available to it.
Sequential review of tax reports
The tax authorities will not be required to follow the
review order of tax reports when, among other cases, the tax report has no tax
effects or is filed late, the review involves foreign trade taxes or fees or
the effects of disincorporation, when the controlling company no longer determines
a consolidated tax result, or when the tax report deals with items modified in
an amended return subsequent to issuance of the tax report.
An official electronic review also gives rise to an
exception to the sequential order for
reviewing tax reports.
The term for revieweing tax reports with the auditing
public accountant is reduced from a year to six months as from the date of
notification of the request for information.
Extension for tax payments
In the case of any taxpayers which correct their tax
situation at any stage of the review prior to the tax authorities issuing a
resolution assessing tax, the authorities may authorize installment payments of
omitted tax, either deferred or in partial payments, when 40% of the debt to be
corrected accounts for more than 100% of the tax
profit for the most recent year in which the taxpayer showed a tax profit.
Confidentiality of information
The confidentiality of information will not be
applicable to the name and tax registration
number of taxpayers holding definitive tax debts that
have not been paid or guaranteed or of taxpayers which have had a debt pardoned
at any time, among other assumptions.
Conclusive agreements
During the course of an official review, taxpayers not
in agreement with the observations made by the authorities concerning failure
to comply with the tax provisions may request a conclusive
agreement.
The conclusive agreement will be processed in writing
at the Taxpayer Defense Office,
specifying the facts or omissions detected and the
taxpayer’s opinion on the matter. The
reviewing authority must state whether or not it
accepts the terms set down in the conclusive agreement; the Taxpayer Defense
Office must evaluate and reach a conclusion on the procedure and then notify
the parties involved.
If the procedure ends in a signing of the agreement,
it must be signed by the taxpayer, the reviewing authority and the Taxpayer
Defense Office.
In that case, the taxpayer is entitled, once only, to
a full pardon of all fines.
Parties considered to have committed tax crimes
The following parties are considered to have committed
tax crimes:
1. Parties acting as guarantors (in the terms of a
legal provision) of a contract or bylaws, in crimes of omission, since they are
responsible for preventing tax crimes from being
committed.
2. Parties which, under a contract or agreement, are
engaged in an independent operation and propose, establish or carry out, on
their own or through a third party, acts, operations or practices leading
directly to a tax crime being committed.
Request for reconsideration
The term for filing a request for reconsideration is
30 days, and must be filed through the tax letter box.
Additional evidence must be announced in the request
or within 15 days following filing of the request, and must be produced within
a term of 15 days following the date on which they are announced.
Guarantee and payment of tax liabilities
In all cases, the term for paying or guaranteeing
taxes assessed by the tax authorities as a result of an official review is 30
days.
In the case of a request for reconsideration, the
taxpayer has 10 days as from the day following the date on which notification
of the resolution becomes effective, to pay or guarantee the respective tax
liability.
The Customs Law
Amendments to the Customs Law are focused on
simplifying and modernizing customs
procedures and making them more efficient, as follows:
Simplification
Customs agents will no longer be necessary for
handling customs procedures. Importers and exporters may use an authorized
legal representative to handle the processing of goods for that purpose. That
representative must comply with certain requirements concerning experience and
specialization in customs matters, as established in the Regulations. This
measure will bring down the costs of importing and exporting goods. However,
the responsibility and risk for the importer or exporter must be evaluated.
The substitute customs agent and in-house customs
agent concepts have been eliminated from legislation.
Cases have been increased where customs processing can
be conducted at locations other than authorized locations, which provides
greater flexibility.
The SAT may authorize the rectification of customs
declarations in fields not permitted up to 2013, once customs processing has
been concluded. Los changes will provide taxpayers with greater juridical
security.
Merchandise on deposit at an in-bond warehouse at a
customs house may be placed under the strategic in-bond warehouse regime
without the need to withdraw that merchandise from the warehouse in which they
are located, provided there is compliance with the control guidelines to be
made known at some later date.
As concerns sanctions, certain tax liabilities may be
paid with a 50% reduction in fines,
provided the payment is made prior to notification of
the resolution imposing the sanction.
Modernization
Customs processing may be conducted with the use of
electronic systems with digital
documents, using electronic signatures and digital
seals, which enhances the use of the single foreign trade counter service
(VUCEM).
One of the important matters in the modernization of
customs processing is the change in the merchandise review process, which will
indirectly generate greater efficiency by implementing nonintrusive reviews and
improving risk analysis. The second customs inspection has also been
eliminated.
The taxpayer may provide the authorities with
electronic files to demonstrate compliance with its obligations.
Efficiency
The program for the importation of railway equipment
has been modified with a view to
promoting railway use, including the possibility of
temporarily importing locomotives and
specialized equipment for a term of up to 10 years.
For certain supply chains, the use of
railways will bring down transportation costs.
In order to promote the Strategic in Bond Warehouse regime,
those warehouses may be established throughout Mexico at facilities not
abutting in bond warehouses or port
warehouses, which will generate significant production
centers for exportation all over Mexico.
Third parties are authorized to provide information
prevalidation services, which could
generate savings as a result of greater availability
of those services.
