It is important to highlight some of the approved tax reforms, since the majority of which will become effective as of January 1, 2021:
Federal Revenue Law (LIF)
- Fiscal incentives for 2021:
- The individual or legal entity that disposes of books, newspapers and magazines may apply an additional deduction of 8% of the cost they acquire, as long as the total income in the immediately preceding fiscal year is less than 6 million Mexican pesos; the incentive is not cumulative for the ISR.
- Starting 2021, tax incentives will be cumulative for ISR purposes at the time they are credited.
- In cases of extension for the payment of tax credits, the same will apply as in the year 2020.
- The income tax withholding rate of 0.97% for the financial system will apply in 2021; the rate in 2020 is 1.45%
Income Tax Law (LISR)
- Legal entities and where appropriate, trusts, may lose their authorization as donataria autorizada when more than 50% of their income is different from the purposes for which they were authorized. Some causes of the revocation of the authorization to receive deductible donations are:
- When the income is used for purposes other than the corporate purpose with which the authorization was obtained.
- Do not issue tax receipts or in cases those receipts indorse different operations.
- When a member of the board of directors or administration has been part –within a period of 5 years– of an organization whose authorization was revoked due to non-existent operations.
- In case of revocation of the authorization or when its validity is concluded and it is not obtained again or it is renewed within the following 12 months, all of its assets must be allocated to other authorized entities.
- No later than July 1, 2021, only companies that obtain authorization to receive deductible donations may remain in the non-profit legal entity regime.
- The option for the donatarias autorizadas of the certificate of compliance with fiscal obligations, transparency and social impact assessment was eliminated.
- Individuals who obtain income greater than 75 million mexican pesos from fees, independent personal services and/or business activities will not be able to pay taxes under the concept of income assimilated to salaries.
- The retention rates applicable to income generated through digital platforms will be:
- Passenger transportation services and goods delivery: 2.1%
- Hosting services: 4%
- Disposal of goods and provision of services 1%.
Value Added Tax Law (LIVA)
- Professional medical services that require a professional title provided by individuals or through civil partnerships, will not be subject to the payment of tax.
- Residents abroad without an establishment in Mexico who operate as intermediaries in activities carried out by third parties may include the tax in the price as long as it has the legend “IVA incluido”.
- Residents abroad without permanent establishment in the Mexico who provide digital services and omit their registration in the SAT, the appointment of a representative in national territory, obtaining their electronic signature, the obligation to pay the tax, withhold the corresponding income tax, present informative or payment declarations; can be subject to temporary blocking of access to internet service by concessionaires of a public telecommunications networks.
Fiscal Code of the Federation (CFF)
- All visit records will be valid even though the visitor does not sign them.
- In the event of a tax opinion, the public accountant must appear personally with his work papers before the authority for the pertinent clarifications.
- The tax mailbox will be governed according to the schedule of the Central Zone of Mexico’s City.
- Intangible assets may not be offered as a guarantee of tax interest.
- Failure to return, transfer or change the customs regime of temporarily imported merchandise will be equated with the crime of smuggling.
- In the division of companies, it will be considered alienation that there are new items in the stockholders’ equity of the spin-off company whose amount was not recognized in the stockholders’ equity accounts of the statement of financial position presented and approved at the general meeting of partners or shareholders that agree to the split. The spun off companies will be jointly liable without limitation.
- The term for taxpayers to request the adoption of conclusive resolutions is extended by 20 days after the final act has been drawn up.
- It will be grounds to have a request for the return of balances in favor not submitted in cases where the address indicated by the taxpayer is considered not located. The authority, in the event that there are several refund requests from the same taxpayer for the same type of contribution, may choose to issue a single resolution. Additionally, at the end of the exercise of the powers of verification, the authority must issue its resolution within a period of 20 business days.
- The authority may suspend or reduce the obligations of taxpayers when it is determined that they have not carried out any activity in the last 3 years.
- People who make partial or deferred payments that settle balances of Digital Tax Vouchers over the Internet (CFDI), export merchandise that are not subject to sale or whose sale is free of charge, must also request the respective CFDI.
- The information resulting from the controversy procedures provided for in the treaties must be kept to avoid double taxation for as long as the companies subsist.
Federal Law of Rights
- In addition to the holders of mining concessions, all those who have rights related to said mining concessions who obtain income consequential from the sale of the extraction activity will pay the special mining right annually.
- The concessionaires of frequency bands of the radioelectric spectrum will pay annually the right for the use, enjoyment, exploitation or exploration depending on their frequency range and in terms of the fees established by law.
The recommendations to face these changes and modifications can be among others:
- Review the terms of the provisions for full compliance with your tax obligations.
- Verify that you are not within the assumptions regarding undue transmission of losses or that you are not carrying out operations with suppliers who are identify as taxpayers who carry out non-existent operations.
- Rectify that all the necessary documentation is available to protect capital increases and decreases, payments, mergers, spin-offs, etc.
- Analyze the income obtained in the case of associations or societies that have authorization as donataria autorizada.
- Review the agreements related to mining royalties to determine if the payment of the mining right is applicable or not.
Maria Fernanda Ortega
Gloria Ponce de León & Hernández