Economic Package
ECONOMIC PACKAGE
Tax Reform 2022
On Friday 12 November 2021, the Fiscal Reform for the fiscal year 2022 was officially published in the Evening Section of the Official Gazette of the Federation, which, in general terms, will come into effect on 1 January 2022.
As we had informed you, this reform was presented by the Federal Executive on 8 September and was approved without observations or changes by the Finance and Public Credit Commission of the Chambers of Deputies and Senators on 18 and 26 October, despite the fact that several reservations to the project were promoted.
The publications made by the Executive are:
- DECREE enacting the Federal Revenue Law for the Fiscal Year 2022;
- DECREE amending, adding and repealing various provisions of the Federal Law on Duties; and
- DECREE amending, adding and repealing various provisions of the Income Tax Law, the Value Added Tax Law, the Law on the Special Tax on Production and Services, the Federal Law on the Tax on New Automobiles, the Federal Fiscal Code and other laws.
The objectives of the reform are, among others:
- Establish control and simplification rules
- Combating tax evasion and avoidance
- Strengthening public finances
- Formalising the economy
- Increasing the taxpayer base
- Do not increase or create new taxes
It is important to mention that, although the objective of not increasing or creating new taxes is achieved, the reality is that the reform implies an increase in administrative and control burdens, as well as an increase in the number of taxes levied.
The tax authorities are granted greater and stricter powers of control by increasing requirements and obligations, limiting benefits, deductions and credits, as well as applying measures that force taxpayers to comply almost coercively.
The following are the highlights of the Tax Reform in terms of the Fiscal Miscellaneous, which includes the Income Tax Law (LISR), Value Added Tax (LIVA), Production and Services Tax (LIEPS), New Car Tax (LISAN), and the Federal Fiscal Code (CFF).
Income Tax Law (LISR)
Simplified Trust Regime for Individuals:
- It is a new regime applicable and optional for individuals who have income of less than $3.5 million pesos and who only carry out business or professional activities or grant the temporary use or enjoyment of goods, even if they also obtain income from salaries and interest, including individuals who are currently taxed under the tax incorporation regime, so that individuals in these regimes will migrate to the new simplified trust regime, as these regimes are eliminated.
- Individual taxpayers who are exclusively engaged in, or who derive 100% of their income from, agricultural, livestock, forestry or fishing activities, when the amount of their income in the tax year in question does not exceed $300,000 and when the income exceeds this amount and up to $3'500,000, ISR must be paid on the total income received under the business activities regime}.
- The tax is levied at progressive minimum rates ranging from 1% to 2.5% on the amount of income earned per year.
- The requirements are minimal, while the main obligations are to submit monthly payments and annual returns, considering only the CFDI's that cover their activities, without including VAT and without applying any deductions; however, no informative declarations must be submitted and no electronic accounting must be kept.
- It is not applicable to individuals who are partners, shareholders or members of legal entities or when they are related parties, are residents abroad who have one or more permanent establishments in the country, have income subject to preferential tax regimes, receive income treated as wages.
- A transitional period will be granted for proper implementation and compliance.
Simplified Trust Regime for Legal Entities:
- It will apply to legal entities resident in Mexico, newly incorporated and by individuals (resident in Mexico or abroad) whose total income does not exceed $35 million pesos in the fiscal year.
- This regime replaces the tax incentive regime of accrual of income based on cash flow, which is eliminated, but technically is transferred to this new simplified regime of trust for legal entities. Therefore, this regime allows the accrual of income and deduction of expenditures to occur until they are actually received and paid (cash flow), so no provisional returns will be made using the profit ratio obtained from their annual return for the previous tax year.
- It does not apply to legal entities whose partners and shareholders have control in other companies or when they are related parties; nor does it apply to taxpayers that carry out activities through trusts or joint ventures, financial institutions and auxiliary credit institutions, non-profit legal entities.
- The obligation to make provisional payments and annual tax returns at the rate of 30% is established, allowing the crediting of withholdings, as well as provisional payments. Most deductions are applicable, except for the cost of sales and bad debts.
- For the fulfilment of requirements and obligations, some of the general regime will apply.
- Transitional arrangements will apply to ensure the correct application of this new regime.
Other ISR Modifications
- Exchange Rate Fluctuation: Establish a parameter for the gain accrued from exchange rate fluctuation, preventing taxpayers from determining less income than they would obtain considering the exchange rate for settling foreign currency denominated obligations payable in the country established by the Bank of Mexico.
- Credits against Annual Income Tax: Establish that, against the annual tax calculated, the following credits may be made, in that order: a) The amount of the provisional payments made during the calendar year b) The amount of income tax paid abroad.
- Backed Credits: Consider as backed credits those financing transactions from which interest is payable and such transactions do not have a business rationale.
- Authorisation of Lower Profit Coefficient: Clarify that, in provisional payments with a lower coefficient, the respective authorisation refers to the profit coefficient and not to the decrease in provisional payments deriving from the variation of such coefficient. In addition, it is included that in the event that the provisional payment has been paid in an amount lower than the corresponding amount, the corresponding complementary return must be filed in order to cover the omitted amounts, with the respective updating and surcharges.
- Usufruct: Consider as cumulative income the value of the usufructuary right that
is determined, at the time when the bare ownership and usufruct of a property is consolidated. In this regard, notaries, brokers, judges and other notary publics must inform the tax authority of the characteristics of the operation to dismember the property and the details of the taxpayer who acquired the bare ownership.
- Determine the gain on the disposal of the bare ownership of an asset by subtracting from the price obtained the original amount of the investment in the proportion of the price that corresponds to the transferred attribute.
- Specify that the usufruct constitutes a fixed asset to which the 5% investment rate is applicable when it is constituted on immovable property.
- Restructuring of companies: Specify that the authorisations granted by the tax authority for the disposal of shares at tax cost in cases of restructuring of companies incorporated in Mexico will only be granted to Mexican resident companies belonging to the same group. Additional requirements are also established, where the restructuring has a business rationale, the relevant operations of the last 5 years are indicated and a report is submitted by a registered public accountant indicating: the adjusted proven acquisition cost of the shares; the book value of the shares; the organisation chart of the group; percentage of equity ownership; direct and indirect shareholding; business segments and lines of business; and that the consolidation of financial statements is certified; among others.
Personal Deductions: The total amount of deductions is limited and may not exceed the lesser of 5 times the annual value of the Unidad de Medida y Actualizacion (UMA), (approximately $163,467.00) (annual value of UMA in 2021 $32,693.4 pesos; this value will change for the 2022 fiscal year) or of the
- 15% of the taxpayer's total income, including donations. However, the current deduction limit of 10% is maintained separately for supplementary contributions made directly to the supplementary retirement contributions sub-account, to personal retirement plan accounts, or to voluntary contributions made to the voluntary contributions sub-account.
- Deductions in General
- Operations related to hydrocarbons and petroleum products: Require as a requirement for deductibility in operations related to hydrocarbons and petroleum products, to declare the information of the permit issued by the Energy Regulatory Commission or the Ministry of Energy to the supplier of the fuel. The deductibility requirement is subject to the declared permit being in force and not suspended.
- Technical Assistance, Technology Transfer or Royalties: Eliminate the deductibility of payments for technical assistance, technology transfer or royalties, when the payments are made to residents in Mexico and the contract has agreed that the service would be provided by a third party, except in the case of the provision of specialised services or the execution of specialised works.
- Bad debts: Establish as a requirement for the deductibility of bad debts, that it is notoriously impossible to collect the debts until such time as the taxpayer has exhausted the legal means to obtain collection and that, even if entitled to collection, it was not possible to recover them.
Thin Capitalisation: In the deduction of interest, it must be demonstrated that the stockholders' equity balance is congruent with the balances
- of the CUCA, CUFIN, CUFINRE accounts and losses pending reduction, thus preventing taxpayers from being able to deduct more interest than they would legally be entitled to because they do not fall under the thin capitalisation hypothesis. Likewise, tax losses pending reduction that have not been considered in the determination of the tax result are included in the items for calculating the accounting capital for the year, thus considering all tax attributes in the calculation .
Clarify that individuals who only provide services under a contract entered into with persons holding permits, authorisations, contracts, concessions, among others, that allow the performance of activities related to strategic areas for the country or for the generation of electricity, have never been able to deduct interest accrued on debts contracted with their related parties resident abroad, so taxpayers indebted for performing such activities with strategic areas for the country, must prove that they are assignees or contractors or that they can perform such activities on their own account.
Non-regulated multiple purpose financial companies (SOFOMES ENR) that, in order to achieve their corporate purpose, carry out activities mainly with their domestic or foreign related parties, may not apply the exception of not including among their interest-bearing debts for the calculation of the amount in excess of three times their stockholders' equity, those contracted by members of the financial system in the performance of the operations that are part of their corporate purpose.
- Investments:
- Original Amount of Investment: Clarify that the original amount of the investment includes the expenses for the physical location, installation, assembly, handling, delivery, as well as those related to the contracted services.
- Notice of Non-Useful Assets: Re-establish the obligation of legal entities to file the notice with respect to assets that are no longer useful for generating income.
- Financial System:
- The institutions of the financial system must submit monthly, instead of annually, the informative declaration of cash deposits made in accounts opened in the name of taxpayers.
- Consider as a stock exchange not only the Mexican Stock Exchange, but any public limited company that obtains the corresponding concession title granted by the Ministry of Finance and Public Credit.
- Spin-off and Tax Losses: Establish that taxpayers that carry out spin-offs must and may divide losses only when the spin-off and spun-off companies are engaged in the same line of business.
Change of Shareholders: To consider that there is also a change of partners or shareholders who have control of the company, in one or more acts carried out within a period of 3 years, counted from the time a merger takes place, when in addition to the change of the holders, directly or indirectly, of more than 50% of the shares or parts of the company with voting rights, the direct or indirect holders of the rights to impose decisions in the meetings, to direct the administration, the management, the management of the company, the management of the company or the shareholders of the company change.
- strategy or major policies of the company in any other form and when, after the merger, the company and its legal entity partner cease to consolidate their financial statements.
- Notices of Share Transfers between Residents Abroad: Legal entities resident in Mexico that are the issuers of the shares transferred by residents abroad without a permanent establishment in the country will be jointly and severally liable for the taxes corresponding to the transfer, and must therefore submit the notice of such transfer the month following the date on which the transaction occurs, indicating the name or company name of the foreign residents, country of residence, as well as the amount and date of payment of the tax.
- Net Tax Profit: To clarify that the PTU of companies is not a concept that has to be subtracted for the determination of the net tax profit.
- Individuals with Rental Income: Taxpayers who grant the temporary use or enjoyment of goods must keep electronic accounting.
- Personal Retirement Plans and Supplementary Retirement Contributions: Include as institutions to manage personal retirement plans the comprehensive investment fund share companies, provided that they obtain prior authorisation from the Tax Administration Service and meet the requirements and conditions to maintain their validity.
- Related Party Transactions:
Eliminate references to related parties resident abroad, given that the definition of related parties in the Law is applicable to related parties resident in the country and those resident abroad, therefore, the obligations for legal entities with operations with related parties are not applicable to related parties resident in the country and those resident abroad, and therefore, the obligations for legal entities with operations with related parties are not applicable to related parties resident in the country.
- The definition of a related party transaction is applicable to transactions with domestic and foreign parties.
- Homologate the compliance date for the filing of the informative declaration and the local informative declaration of related parties, with the filing of the tax report, to 15 May of each year.
- The new law would apply the arm's length or arm's length principle to foreign residents subject to ISR, stating that they are obliged to determine income, profits, gains and, if applicable, deductions derived from transactions with related parties, considering the prices, amounts of consideration, or profit margins that they would have used or obtained with or between independent parties in comparable transactions.
- Residents Abroad:
- Acquisition of Property: When there is a difference of more than 10% with respect to the consideration agreed in the purchase and sale of real estate, the transferor (resident in Mexico or permanent establishment in the country) will be obliged to pay the tax and will replace the foreign resident in this obligation.
- Sale of Shares: In transactions involving the sale of shares between related parties, where it is opted to pay tax on the gain or profit from the sale, in addition to the submission of an opinion, the transfer pricing study demonstrating the market value of the disposal of shares or securities representing ownership of assets must be included.
It is further specified that, in cases of group restructuring, shares shall be deemed to be outside the group.
when the issuing company and the company acquiring the shares cease to consolidate their financial statements in accordance with the provisions governing the taxpayer in accounting and financial matters, or which it is obliged to apply, in order for taxpayers to make the deferred tax payment.
It is also specified that this benefit will be applicable when the requirements are met and the respective authorisation is in place, including the restructuring or, as the case may be, the relevant transactions related to such restructuring have a business reason and the share exchange has not generated income subject to a preferential tax regime.
A transitional provision establishes that taxpayers who, as of 31 December 2021, have obtained an authorisation in force to defer payment of income tax, must inform the tax authority of the relevant transactions they carry out as of 1 January 2021.
- Reduced Rates on Interest Withholding: The Law states that the reduced rates of 10% and 4.9% will not be applicable in the respective cases, when the beneficial owners receive more than 5% of the interest derived from the securities in question. However, given that in some cases these reduced rates are applied without considering the applicable limitations, because the interest is not derived from debt securities, the reference to "interest derived from debt securities" is eliminated, so that the limitation to apply the reduced rates applies to any transaction that gives rise to the payment of interest, as there is no reason to make a distinction in terms of transactions that do or do not derive from debt securities.
- Compensation for Damages: It is included that when judgments or arbitration awards condemn a payment without indicating whether it is compensation for damages, the payer must make the withholding on the total income, leaving the burden of proof on the foreign resident receiving such income so that, at the time of requesting a refund of the tax withheld in excess, he can prove to the tax authorities the nature of the payment he has received and thus determine the appropriate tax treatment.
- Legal Representation: Legal representatives of residents abroad must voluntarily assume joint and several liability for the payment of the tax incurred by the resident abroad, as well as include the requirement that the appointed representative be solvent. That is, he/she must have sufficient assets to ensure compliance with the substantive tax obligation.
- Preferential Tax Regimes (REFIPRE)
- It is established to change the name of Title VI of the respective Law, including related party transactions: "OF CONTROLLED FOREIGN ENTITIES SUBJECT TO PREFERENTIAL TAX REGIMES AND, OF MULTINATIONAL COMPANIES AND RELATED PARTY TRANSACTIONS".
It is established that rules related to inflationary adjustment and exchange rate effects referring to the Mexican peso have never been directed to income obtained abroad under a preferential tax regime, and therefore, such rules should not be taken into account when determining income tax.
- Mexican taxpayer, for purposes of comparison with the tax actually paid in Mexico or to determine the tax result of the foreign entity subject to the provisions of REFIPRES.
- Multinational Enterprises and Related Party Transactions:
- Only information from comparable transactions for the financial year under review should be considered. However, where the business cycles or commercial acceptance of a taxpayer's product cover more than one financial year, comparable transactions from 2 more financial years, earlier or later, may be considered.
- The ranges of prices, amounts of consideration or profit margins, when there are two or more comparable transactions, shall be adjusted by applying the inter-quartile method established in the Regulations of the Law, the method agreed in the framework of a friendly procedure indicated in the treaties to avoid double taxation, to which Mexico is a party, or the method authorised in accordance with the general rules issued for this purpose by the Tax Administration Service.
- Maquiladoras:
Eliminate the obligation to present the written statement by which maquiladora companies declare to the tax authority that the tax profit for the year represented at least the greater of 6.9% of the total assets used or 6.5% of the total amount of operating costs and expenses ( Safe Harbor method), leaving in force only the
- obligation to file the information return for manufacturing, maquiladora and export services companies (DIEMSE), which must show the calculation of the tax profit in accordance with the Safe Harbor method and the data taken into account for this purpose.
- Eliminate the possibility for maquiladoras to obtain a private ruling from the tax authority confirming compliance with their transfer pricing obligations.
- Tax Incentives: In the tax incentives granted to film production projects, theatrical, visual arts, dance, artistic, research and technological development, high performance sports, and investments for electric vehicles, in which taxpayers apply a tax credit equivalent to the total or partial amount of the contribution, expenditure or investment they have made in the project, as applicable in each case, against the income tax incurred in the fiscal year and/or provisional payments, it is established that the difference of the applicable tax credit may be credited against the resulting tax incurred, after deducting the corresponding provisional payments, as well as the creditable tax.
Value Added Tax Law (LIVA)
- Animal Feedstuffs: Apply the 0% rate to products intended for human and animal feedstuffs, retaining the exceptions currently established in the LIVA.
- Menstrual Hygiene Products: Establish that the above-mentioned hygiene products are subject to VAT at the rate of 0%.
- VAT crediting: Expressly establish as a requirement for import VAT crediting that the customs declaration must be in the name of the taxpayer who intends to credit the tax paid on the import.
- Non-crediting of VAT: Establish that the concept of activities not subject to the tax, includes the assumptions of those acts that are not considered to be carried out in national territory, as well as those carried out in national territory that do not fall within the assumptions of taxed activities, for which income is obtained or consideration is charged and that, for their performance, expenses and investments in which VAT is transferred to the taxpayer are indistinctly allocated, in order to be clear that the creditable VAT should only be related to expenses and investments that are allocated to the performance of taxed activities.
- Pre-operational period: Establish that, in order to correctly determine the VAT credit adjustment in the pre-operational period, the taxpayer must inform the tax authority of the month in which it starts its activities for VAT purposes, in accordance with the general rules issued for this purpose by the Tax Administration Service.
- Digital Services: Establish that the provision of information on the number of services or operations carried out with recipients located in national territory will be monthly and not quarterly.
- Temporary Use or Enjoyment of Tangible Goods: Clarify that the temporary use or enjoyment of goods in national territory is subject to the payment of VAT, regardless of the place where the material delivery of the goods that will be the object of the temporary use or enjoyment takes place.
Federal Fiscal Code (CFF)
- Residents in Mexico: Unless proven otherwise, individuals of Mexican nationality are presumed to be residents of Mexico, so that the status of resident in Mexico will not be lost if the individual does not prove such change or does not submit a notice of change of residence. Likewise, the term for maintaining the status of resident in Mexico of individuals or companies that change their tax residence to a country or territory with a preferential tax regime is extended from 3 to 5 years.
- Suspension of Deadlines due to Force Majeure or Fortuitous Event: The proposal is to specify the power of the tax authorities to suspend, by means of general rules, the deadlines set out in the tax provisions, including those relating to compliance with obligations and the exercise of powers, when there is force majeure or fortuitous event.
- Mergers and Demergers:
- It is specified that the transfer to be made in a division is that of the share capital, in order to prevent divisions being made to transfer losses without transferring a minimum amount of share capital.
- Mergers and demergers without a business purpose shall be considered as a disposal, considering for such purposes the relevant transactions carried out within the 5 years immediately preceding and following their completion.
- Relevant transactions to be considered are any act, regardless of the legal form used, whereby:
Transfer of ownership, enjoyment or use of shares or of voting or veto rights in decisions of the merging company, of the merging company, of the
- the acquirer, of the spun-off company or companies, or of the favourable vote necessary for the taking of such decisions.
- Granting of the right to the assets or profits of the merging company, the transferor, the transferee(s) in the event of any kind of capital reduction or liquidation.
- Decrease or increase of more than 30% in the book value of the shares of the merging, demerging, demerging or demerged company or companies, in relation to the determined value of these at the date of the merger or demerger of companies, which was recorded in the respective report.
- Decrease or increase in the share capital of the merging, divisor, divided or divided company or companies, based on that stated in the report.
- A partner or shareholder who received shares by virtue of the merger or division increases or decreases his or her percentage interest in the share capital of the merging, divisor, divided or spun-off company, and as a result increases or decreases the percentage interest of another partner or shareholder of the merging, divisor, divided or spun-off company, taking as a basis the percentages of interest in the share capital of such partners or shareholders as stated in the opinion.
- Change of the tax residence of the partners or shareholders who received shares of the merging, divisional, spun-off or spun-up company, or of the merging, divisional, spun-off or spun-up company, as stated in the opinion.
- Transfer of one or more segments of the business of the merging, divisor, divided or spun-off company(ies), as identified in the opinion.
- Image Right with the Tax Treatment of Royalties: Consider the concept of the use or concession of use of a copyright on a literary, artistic or scientific work to include the right to the image, applying the tax treatment of royalties to the taxable income resulting from the exploitation of the copyright inherent to the image itself.
- Advanced Electronic Signature or Digital Seal Certificate (CSD) for Legal Entities with Partners or Shareholders in Irregular Tax Situation: Deny the advanced electronic signature or, if applicable, the CSD when a partner or shareholder who has effective control of the legal entity requesting the procedure, has restricted digital seals or is listed for carrying out non-existent operations, without having corrected his or her tax situation. Or when the legal entity of which it is a partner is found to have such irregularities.
- Cancellation of CSD: It is established that when the authority's procedures followed for the cancellation of CSD are exhausted or concluded, it will only notify the resolution relating to such cancellation. Likewise, when the tax authority has issued a resolution in which it resolves the merits of the matter, taxpayers may only carry out the procedure to obtain a new certificate, provided that they previously correct their tax situation. On the other hand, it is established not to limit tax secrecy for some cases of CSD cancellation.
- Restriction of CSDs:
Simplified Trust Regime: When individuals under the simplified trust regime fail to make 3 or more consecutive monthly payments.
or not, of the tax or of the annual return.
- Resistance to the Verification of their Tax Obligations: When taxpayers repeatedly fail to cooperate during the exercise of the verification powers and have been fined for such reluctance.
- Materiality of the Transactions Covered by Tax Receipts: When the taxpayer does not go before the tax authority to prove that he/she entered into the transactions with those who are definitively in a process of non-existent transactions, even when there is no liquidation or proceeding.
- Inconsistencies: When the income declared, as well as the tax withheld by the taxpayer, stated in the provisional, withholding, final or annual tax returns, do not match the value of the taxable acts or activities declared in the provisional or final tax returns for the year, or the informative returns, in relation to the information held by the Tax Administration Service.
- Irregular Partners: When a partner or shareholder who has effective control of the legal entity has restricted his or her digital stamps or is listed for carrying out non-existent operations, without having corrected his or her tax situation.
- When the taxpayer does notrespond to the authority's request and the request for clarification is deemed not to have been filed, the 40-day period will continue to run as if the clarification had not been filed, and the use of the CSD will be restricted.
Electronic means: A digital document with an advanced electronic signature or digital seal will be verified not only by the remission of the original document with the author's public key through mechanisms to be determined by rules of character.
The Commission has also developed a general framework to enable the use of innovative tools for the validation of documents.
- Returns:
- Time limits: Periods of time between the issuance of a request and its full reply shall not be taken into account in calculating the time limit for the return.
- No Amount Limit: The income limit for filing tax refund requests in electronic format is eliminated, so all refund requests must be filed in electronic format.
- Self-correction through the Offset of Tax Credits: An option is established so that, as of January 2023, taxpayers who are subject to the exercise of verification powers can correct their tax situation by applying the amounts they are entitled to receive from the tax authorities for any concept against the omitted taxes and their accessories, as determined by the tax authority; this, even when different taxes are involved. In other words, the universal offsetting of credit balances will only apply when it is applied to correct the tax situation. For such purposes, it is established that the taxpayer must submit a request to the tax authority, which will decide and notify the taxpayer of the amount of the credit balance accepted for the correction, which in turn may be totally or partially accepted or rejected by the taxpayer. It is important to mention that no right to a refund or compensation will be generated in the event that the taxpayer does not accept the application of the credit balance, or in the event that such amount is greater than the credit determined by the authority.
The amounts in favour of the taxpayer resulting from an administrative appeal decision or a judgment issued by an administrative body shall not be eligible for application.
jurisdictional. Likewise, the acts issued by the tax authority in this process cannot be challenged.
- Joint and several liability: It establishes the cases in which there is acquisition of negotiations, and joint and several liability applies.
- RFC:
- It is established that individuals from the age of 18 who reach the age of majority must register with the RFC, however, the registration will be carried out as "registration of individuals without economic activity", so that the registration will not generate tax obligations or give rise to the payment of taxes or penalties.
- The authority is empowered to cancel or suspend the RFC registration when it detects that in the last 5 years the taxpayer has not carried out any activity, has not issued tax receipts, has no outstanding obligations to fulfil, or there is proof of death.
- For the cancellation of the RFC, a positive opinion on compliance with tax obligations in the area of social security is required.
- CFDIs:
- Free Export: The exporter is obliged to issue the CFDI for exports of goods that are not sold or whose sale is free of charge.
- Publication of Complements: It is specified that the publication of CFDI complements in electronic media is on the website of the Tax Administration Service.
CFDI Certification Providers: The authorisation and
operation of CFDI certification providers.
- CFDI's of Expenses: CFDI's that do not have the necessary supporting documentation cannot be deducted from the taxpayer's income with CFDI's of expenses, but must be cancelled.
- Inconsistencies of Description and Economic Activity: When the information corresponding to the service, goods, merchandise or use or enjoyment indicated in the CFDI does not coincide with the economic activity registered in the RFC, the authority will proceed to update the taxpayer's economic activity in the register.
- Cancellation of CFDIs: In order for taxpayers to be able to cancel CFDIs, they must prove and justify that said receipts were in fact defective in their issuance, being able to prove to the tax authority that said cancellation is justified.
- Exchange of Information: The information and documentation of residents abroad and of the Standard for the Automatic Exchange of Financial Account Information in Tax Matters shall be retained for a period of 6 years from the date on which the respective information or documentation was generated or should have been generated, or from the date on which the related returns were filed or should have been filed, as the case may be.
- Relevant Transactions: Included in the information that taxpayers must submit on relevant transactions is that relating to relevant merger and spin-off transactions, restructuring of companies, and disposal of shares.
Dictamen Fiscal: It is compulsory for legal entities under the general regime that in the last fiscal year declared have included in their normal tax declarations accumulable income for the purposes of the
- income tax equal to or greater than an amount equivalent to $1,650,490,600.00 MXN, as well as those that at the close of the immediately preceding fiscal year have shares placed among the general investor public on the stock exchange. Taxpayers who choose to have their financial statements audited will declare it when filing the income tax return for the fiscal year corresponding to the fiscal year for which the option is exercised. On the other hand, it is established that the filing of the report must be made by 15 May of each year.
Taxpayers that are related parties of those who are obliged to report their financial statements, submit information on their tax situation.
Likewise, it is established that registered public accountants who, when preparing the opinion on the financial statements, were aware that the taxpayer had engaged in conduct that could constitute an offence, without having informed the tax authority, and subsequently criminal proceedings were brought in respect of such conduct, will be liable for concealment of tax offences.
- Controlling Beneficial Owner: A controlling beneficial owner is defined as a natural person or groups of natural persons who effectively control or benefit economically from a legal person or legal entity by holding a significant percentage of the entity's shares, or such percentage represents a significant share of the voting rights or the ability to appoint or remove members of the entity's management.
It establishes the obligation for legal entities, trustees, settlors or trustees, in the case of trusts, as well as the contracting parties or members, in the case of any other legal entity, to obtain and keep, as part of their accounting and to provide the Administration Service with the following information
Tax Authorities, the information relating to its controlling beneficiaries in a reliable, complete and updated form. Likewise, a positive opinion of compliance must be obtained if all the obligations related to the figure of the controlling beneficiary are observed.
It establishes the power for desk reviews, aimed at the subject matter of controlling beneficiary and automatic exchange of financial information.
- Declarations and Voluntary Compliance: In order to benefit from the best international practices in the field of voluntary and cooperative compliance, the Tax Administration Service will implement the international compliance certainty programme, as well as to establish tax certainty and dispute prevention programmes. In this regard, the international compliance certainty programme is a multilateral project in which different tax administrations initially participated in January 2018, with the aim of conducting a risk analysis on the financial and tax information of multinational groups.
- Appraisals: The tax authorities may carry out appraisals of intangible assets or in respect of income received for services, as well as when a presumptive profit is determined in the case of intangible assets involved in the sale or acquisition of goods whose price was agreed at below-market values between independent parties. This power to carry out appraisals is different from the appraisals that the authority orders to be carried out.
Simulation of Legal Acts for Tax Purposes: The aim is to incorporate the power for the tax authorities, in the exercise of their powers of verification, to determine the simulation of legal acts, exclusively for tax purposes, duly founded and
- The taxable event shall be the taxable event, motivated within the verification procedure and declared to exist in the very act of determination of the tax situation of the taxpayer, provided that it is a matter of transactions between related parties. In legal acts in which there is simulation, the taxable event taxed shall be the one actually carried out by the parties.
- Confidentiality in Desk Reviews: It is envisaged to include for desk reviews the procedure to disclose to the taxpayer and its representatives confidential information provided or obtained from independent third parties regarding comparable transactions that affect the competitive position of such third parties, which is currently only established for when a home visit is carried out. Access to this information will only be for the purpose of the taxpayer correcting its tax situation, disproving facts or omissions or challenging the resolution that determines the tax credit. The above, provided that the taxpayer and his representatives sign the confidentiality document.
- Conclusive Agreements: Conclusive agreement procedures should last no longer than 12 months from the date of the request.
- Reductions of Fines: The reductions shall apply provided that no dispute resolution procedure established in a double taxation avoidance treaty to which Mexico is a party has been filed.
- Penalty Applicable to the Optional Regime for Groups of Companies: Included to penalise with a fine of 60% to 80% of the difference between the declared loss and the loss actually incurred.
- Infringements and Fines: The infringements and penalties applicable to non-compliance with the obligations proposed in the project are established.
Law on the Special Tax on Production and Services (LIEPS)
- Import of Automotive Fuel: Establish that when the customs or tax authority, in the exercise of its powers of verification, detects that due to the characteristics of the merchandise being introduced into national territory, this corresponds to automotive fuels in respect of which the total or partial payment of the tax has been omitted, the corresponding quota will be applied according to the type of fuel in question, without prejudice to the administrative and criminal sanctions that may be applicable.
- Definitions Related to Alcoholic Beverages (Electronic Tag and Establishment): Establish what should be understood by electronic tag, in order to provide legal certainty on its application and establish its material and operational difference with respect to the physical tag, which is maintained. In this regard, the physical tag is provided printed and can be attached to any part of the container except for the base, while the electronic tag is provided by the authority in the authorised electronic folio, which will be printed on the label or back label of the container containing alcoholic beverages.
- Establishment of Final Consumption: Establish a non-limiting list of places where alcoholic beverages are regularly sold for final consumption, indicating as such canteens, bars, breweries, nightclubs, cabarets, restaurants, hotels, social centres, discotheques, lunchrooms, restaurants, kermises, fairs, shows, public dances, halls, banquets, casinos, and all those where alcoholic beverages are opened for sale and final consumption.
Alcoholic Beverages for Consumption in the Same Place or Establishment where they are Sold: The authority may issue general rules to establish the cases in which taxpayers that sell to the general public alcoholic beverages for consumption in the same place or establishment in which they are sold.
- alcoholic beverages for consumption in the same place or establishment where they are sold, may not destroy the containers that contained them immediately after their contents have been used up and use them for display. It is also established that establishments must scan the QR codes on the alcoholic beverage labels in the presence of the consumer.
- Denatured Alcohol and Uncrystallisable Honeys: Eliminate the obligation for manufacturers, producers, bottlers and importers of denatured alcohol and uncrystallisable honeys to register in the Alcoholic Beverages Taxpayers' Register, leaving only alcohol manufacturers, producers, bottlers and importers obliged to do so.
- Security Code Printing Service Providers: Eliminate the figure of the security code printing service provider for cigars and other manufactured tobaccos (with the exception of cigars and other manufactured tobaccos made entirely by hand) and establish that the Tax Administration Service will be in charge of generating and providing the referred codes.
- Security Code on Cases, Packages, Wrappers or Any Other Form of Presentation: Include as an obligation for producers, manufacturers and importers of cigars and other manufactured tobaccos to print the security code on any means of presentation of their products and not limit the security codes to be requested only for printing on packets.
- Automotive Fuel Fees: Modify the procedure for updating the fees applicable to automotive fuels to reflect anticipated inflation during 2022, in line with the General Economic Policy Criteria 2022.
For further information regarding this newsletter, please contact us:
Ricardo Quibrera Saldaña
ricardo.quibrera@ecovis.mx
Arturo Quibrera Saldaña
arturo.quibrera@ecovis.mx
Kennya Ramírez Ugalde
kennya.ramirez@ecovis.mx
Cristina Contreras García
cristina.contreras@ecovis.mx
Benjamin Segura Garcia
benjamin.segura@ecovis.mx
Monica Alcocer Jaimes
monica.alcocer@ecovis.mx
- Armoured cars: Eliminate the special treatment for new armoured cars, determining the tax base, including the value of the material used for the armouring. Likewise, it is established that the applicable amounts in force for the fiscal year 2022, where they will be updated in January 2022, with the update factor corresponding to the period from December 2020 to December 2021 and the SHCP will publish in the DOF the update factor in the first 3 days of January 2022.
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