New provisions of the Miscellaneous Tax Resolution 2020

The Federal Official Gazette (Diario Oficial de la Federación) published  the non-binding criteria derived from article 33, fraction I, subsection h) from the Federal Tax Code (Código Fiscal de la Federación), about the Federal Law of Rights (Ley Federal de Derechos), Revenue Law of Hydrocarbons (Ley de Ingresos sobre Hidrocarburos), Federal Income Law (Ley de Ingresos de la Federación), Law on the Special Tax on Production and Services (Ley del Impuesto Especial sobre Producción y Servicios), Value Added Tax Act Law(Ley del Impuesto al Valor Agregado), Income Tax Act Law (Ley del Impuesto sobre la Renta).

The criteria issued on the Federal Tax Code contemplates the delivery or making available to the CFDI, according to article 29 that establishes the obligation of the taxpayers to issue CFDIs via internet for the acts that they perform, for the income that they receive or  for the withholdings of contributions that they make, for which, before their expedition they must send them to the SAT or to the certification provider of digital fiscal vouchers via internet for their certification, validating the fulfillment of the requirements established by the referred law.

In relation to the Federal Income Law, a criterion was issued respect to the permanent establishment, indicating that the exception of the payment of income tax in Mexico by a foreign resident, even if he carried out his acts through a dependent agent, was considered an undue tax practice. In this sense, anyone who advises, counsels or provides services will be considered to be in improper tax practice.

With respect to the disposal of fixed assets, it is considered an undue tax practice to determine the tax profit for the year by deducting the balance pending depreciation of the fixed assets that have been disposed of during the year and for which the corresponding deduction has already been made in order to calculate the cumulative gain from the disposal of assets. As well as, taxpayers who deduct from the outstanding balance of depreciation of fixed assets disposed of through a financial lease contract.

A financial system institution that makes interest payments and does not make the withholding referred to in article 54 of the Federal Income Law will be considered to have improper tax practices, in the following cases:

  1. Interest derived from liabilities that are not borne by the institutions that make up the financial system or by investment companies specialized in retirement funds.
  2. Interest paid to the institutions that make up the financial system or to investment companies specialized in retirement funds, when they act on behalf of third parties.

Likewise, criterion number 10/ISR/NV, corresponding to investments made by civil organizations and trusts authorized to receive deductible donations, is repealed.

With regard to sportsmen and women’s federation rights, criterion 34/ISR/NV provides that sports associations or sports clubs that deduct as an expense the expenses they pay to the latter in order to terminate the employment relationship with the athlete at the time they transfer the federation rights to the purchaser of those rights, as well as the various expenses that are paid subsequently for the acquisition of federation rights, shall be considered as improper tax practices; The same applies to anyone who advises, counsels, provides services or participates in the realization or implementation of the above practice. According to the General Law of Physical Culture and Sport (Ley General de Cultura Física y Deporte), which establishes that Sports Associations will be registered by the National Sports Commission (Comisión Nacional del Deporte), and therefore, are excluded from paying the Income Tax Act Law (article 79, fraction XXVI of the Income Tax Act Law), will be considered an undue tax practice when they do not consider as income those obtained from the performance of commercial activities and derived from previous practice do not determine the Income Tax Act Law in terms of Title II of this law, as well as those who advise, counsel, provide services or participate in the previous performance.

In reference to hosting services thorough technological platforms, the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Publico) issued criterion 41/ISR/NV, which establishes as an undue tax practice for taxpayers who do not accumulate for income tax purposes, the income received from business activities consisting of the provision of hosting services, when they use technological platforms and do not pay the corresponding tax, as well as those who advise, counsel, provide services or participate in the same.

However, in accordance with the criteria of the Value Added Tax Act Law(Ley del Impuesto al Valor Agregado), criterion 6/IVA/NV was published, corresponding to the retention of residents abroad without a permanent establishment in the country, which establishes that individuals or legal entities that acquire tangible goods are considered to be in improper tax practice, or use or enjoy them temporarily, that dispose of or grant residents abroad without a permanent establishment in the country and do not make the withholding referred to in article 1-A, section III of the VAT Law, because they consider that the resident abroad is a resident in the national territory, in accordance with article 3 of the aforementioned Law.

In addition, criterion 64/ISR/N is issued, which defines the interest paid to residents abroad by multi-object financial companies in transactions between related persons, deriving from loans or other credits.

According to the publication of Annex 14 of the Miscellaneous Fiscal Resolution 2020 (Resolución Miscelánea Fiscal 2020), authorizations are established for civil organizations and assistance, educational, scientific or technological research, cultural, scholarship, ecological trusts for the reproduction of species in protection and danger of extinction, economic support from authorized donors, for public works or services, owners of private libraries with access to the general public, private museums and social development organizations.

In this sense, civil organizations and trusts are authorized to receive deductible donations under the terms of the Agreement Avoid Double Taxation and Prevent Tax Evasion in Income Tax Matters (Convenio para Evitar la Doble Imposición e impedir la Evasión Fiscal en materia del Impuesto sobre la Renta), only between Mexico and the United States.

In accordance with publication of annex 15 to the Miscellaneous Fiscal Resolution 2020 (Resolución Miscelánea Fiscal 2020), the rates for fixing the Tax on New Automobiles (Impuesto sobre Automóviles Nuevos) are determined, establishing a lower limit of $0.01 to $509,833.95 pesos and upper limit of $283,241.20 pesos and above.

On the other hand, the amounts corresponding to article 8 of the Federal Law of TNA (Tax on New Automobiles), on the sale to the consumer by the manufacturer, assembler, authorized distributor or dealers in the vehicle sector, whose sale price, including optional, common or luxury equipment, without reducing the amount of discounts, rebates or bonuses does not exceed the amount of $263,690.54 pesos and in the case of automobiles whose sale price is between $263,690.55 and up to $334,008.30 pesos, the exemption will be 50% of the tax payment established by said Law.

Similarly, the vehicle key codes were published, consisting of company, model and version, as well as the vehicles imported from Mercosur by individuals with business activity or legal entities other than manufacturers and authorized distributors.

The above provisions can be consulted in detail in the following links:

https://www.dof.gob.mx/nota_detalle.php?codigo=5583666&fecha=09/01/2020

http://www.diariooficial.gob.mx/nota_detalle.php?codigo=5583779&fecha=13/01/2020

https://www.dof.gob.mx/nota_detalle.php?codigo=5583835&fecha=14/01/2020

Lic. Génesis Moyeda Salazar

Gloria Ponce de León & Hernández

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