Last year 2021, the 2022 Tax Reform and the Miscellaneous tax rules for 2022 (Resolución Miscelánea Fiscal para 2022 in Spanish) were published in the official gazette. Starting on January 1st, 2022, the changes in Mexican tax Law and Miscellaneous tax rules came into force. Among the principal changes are the following:
Deductions
Deduction of technical assistance, technology transfer or royalties
These expenditures may be deducted if the service is received directly and not through third parties, except in the case of subcontracting of specialized services.
Limiting the amortization of losses due to change of partners or shareholders.
New assumptions on the change of shareholders are added for the purposes the limits of amortization of tax losses, among others: that the holders of the rights that allow the imposition of decisions, or that allow directing the administration, the strategy or the main policies of the company, change.
Bad credit deduction
In the case of receivables whose principal is greater than 30 thousand UDIS, the possibility of deducting them as uncollectible without first having exhausted all the necessary collection procedures is restricted. To do so, the creditor must obtain a final resolution document issued by the corresponding authorities.
Fuel deduction
For the deduction of fuel expenditures for maritime, air and land vehicles, it is required that the electronic invoice (CFDI) contains the information of the valid permit from the fuel supplier, and that said permit is not suspended at the time of issuance of the invoice.
Waybill Complement
The use of the waybill complement (Complemento Carta Porte in Spanish) will be mandatory as of January 1st, 2022, however, those that are issued before March 31, 2022, and do not have all the requirements stated in the instructions for filling CFDI to which the waybill complement is incorporated, will not be sanctioned. The previous models of waybill issued by the SCT are repealed.
Let us remember that the CFDI with a waybill complement is the document that legally certifies the transport of goods or merchandise by any means in Mexican territory.
Digital stamp temporary restriction
The tax authority may restrict the use of the digital seal certificate, among other cases, for the following:
- Have 3 or more skipped monthly payments, for individuals
- Have inconsistencies between the statement and other information presented, against CFDI.
- Have a controlling partner without correcting his/her tax situation.
Taxpayers cannot obtain a new certificate, except when they correct the irregularities and fully correct their tax situation.
Maquiladoras
Maquiladoras will no longer be able to use the Advance Pricing Agreement (APA) to document compliance with transfer pricing obligations, hence the only valid mechanism will be the “Safe Harbor” method.
If the Maquildora’ informative tax return (“DIEMSE” as per its acronym in Spanish) is not presented or the information reflected therein does not reflect estimations made through the Safe Harbor, the maquiladoras will not be able to apply the maquila regime, and therefore the related party residing abroad will have a Permanent Establishment in Mexico.
Original Amount of the investment
As of next year, the original amount of the investment (fixed assets, deferred expenses, and charges, as well as pre-operating expenses) will also consider the expenses in the preparation of the physical location, installation, assembly, delivery, as well as the hired services so that the investment works as it should.
New electronic invoice 4.0
As of January 1, 2022, the new version 4.0 of the electronic invoice (Comprobantes fiscales digitales por internet or “CFDI” by its acronym in Spanish) will enter into force. The use of CFDI version 3.3 will be until April 30, 2022, hence version 4.0 will be mandatory as of May 1, 2022.
Among other changes, some characteristics of this new version include:
- It will include fields to identify the operations where there is an export of merchandise.
- Identifies if the operations covered by the voucher are subject to indirect taxes.
- Incorporates new sections to report information regarding operations with the public; as well as those that are carried out on behalf of third parties.
- The electronic invoice can only be issued if the recipient provides their tax regime, since such information is mandatory.
- The invoice must include the name and fiscal address of the issuer and receiver.
- Versions 2.0 of the Payment Supplement and the Withholding and Payment Information Receipt are also issued.
Cancelation of electronic invoice (CFDI)
CFDIs may only be canceled if the person to whom they are issued accepts their cancellation, no later than January 31 of the year following its issuance.
There will also be fines in case of canceling invoices outside the established period, or if the cause of the cancellation is not clarified.
CFDI issuance without complements
It is sanctioned with a fine of $ 400.00 to $ 600.00 MXN for each tax invoice (CFDI) that is issued and does not have the corresponding complements, according to the general rules issued by the SAT.
CFDI Payroll for fiscal year 2021
Taxpayers who during 2021 have issued a Payroll CFDI that contain errors or omissions in their completion may, for a single occasion, correct these if the new invoice is issued no later than February 28, 2022, and they cancel the invoice that replaces them.
Clarification for updating activities derived from the issuance of a CFDI
Taxpayers dissatisfied with the automatic update of their economic activities and tax obligations by the tax authority may apply for a clarification.
Issuance of CFDI with «Complement for receipt of payments»
The term for issuing the CFDI is modified and is to be issued no later than the fifth calendar day of the month following the corresponding payment (s) received. Previously, the term was until the tenth day of the month.
CFDI for distributors of natural or oil gas
These distributors may continue to issue a daily, weekly, or monthly CFDI for all the transactions conducted with the public, until 31 December 2022.
Controlling beneficiaries
The obligation is established for legal entities, trustees, or settlors (in the case of trusts) to obtain, keep, and provide the SAT with information regarding their controlling beneficiaries. The terms control, significant influence and command authority will be defined pursuant to the Securities Market Law.
Information such as the name and taxpayer identification number (RFC) of those having control or significant influence will be submitted via the procedure file 295 / CFF as contained in Annex 1 -TO, by 30 June 2022.
Statutory Tax Report
The obligation to present a Statutory Tax Report is established to taxpayers who:
- Public entities (shares in the Mexican Stock Market)
- Large taxpayers that in the immediately preceding fiscal year have obtained accumulative income greater than $ 1,650,490,600.00 MXN.
The statutory tax report for FY 2021 must be submitted no later than July 15, 2022.
Statutory Tax Report on mergers and spin-offs of companies
A rule is added establishing that financial statements of companies involved in a merger or division must be presented no later than 31 March of the year immediately after the one in which the merger or division was carried out.
Submission of information on financial intermediaries involved in the sale of shares
Financial intermediaries will present the information regarding the net gain or loss on the sale of shares, corresponding to fiscal year 2021.
Usufruct
Consolidation of the bare ownership and the usufruct of an asset.
Consider as a taxable income the consolidation of the bare ownership and the usufruct of an asset, for which the value of the usufruct right will be determined through an appraisal.
The bare owner must carry out said appraisal, include the taxable income and submit the corresponding informative tax return.
Additionally, within 30 days after the transaction, notaries, brokers, and judges, must inform the tax authorities. These changes will be applicable only to legal entities of the general regime of the Mexican Income Tax Law.
Determination of the profit on the disposal of the bare property and the usufruct of an asset.
The profit on the disposal of the bare ownership of a good is determined by subtracting from the price obtained, the original amount of the investment in proportion to the price that corresponds to said transmitted attribute, according to the appraisal previously made.
Acquisition of the usufruct right of real estate
The acquisition of the usufruct right over a real estate is incorporated within the definition of fixed assets. The maximum percentage of depreciation per year is 5 %.
Investments in the mining sector.
Installations, additions, repairs, improvements, adaptations or any construction carried out on a mining lot in accordance with the Mining Law will be considered as constructions.
Simplified Regime of Trust for legal persons (RESICO for its acronym in Spanish)
Applicable to legal entities resident in Mexico constituted only by individuals, and whose income does not exceed 35 million Mexican pesos, effective as of January 1, 2022.
Those who will be taxed under this regime must submit a notice about the update of economic activities and obligations to the SAT no later than January 31, 2022. If they do not submit it, the SAT is empowered to update said activities and obligations.
Likewise, they must comply with the obligations established for this regime, as well as with the obligations of the legal entities of the general regime. Those who do not comply will return to the general regime as of the immediately following fiscal year.
It is a flow-based regimen, so:
- They will only be able to deduct the expenses that have been incurred in the year.
- They will be able to deduct the merchandise and raw materials at the moment in which they acquire them, and not until they have been sold.
- They may only deduct the interest paid and not the interest accrued.
- As it is based on flow, they will not make the annual inflation adjustment to determine their tax payable for the year.
One of the benefits that stand out the most is the increase in the maximum percentage for investment deductions: buildings, office furniture and equipment, computer equipment, equipment used in restaurants, molds, dies and tools.
Obligations for related parties
It is established that the obligation to obtain and keep the supporting documentation of transfer prices between independent parties in comparable operations is applicable to any operation with related parties, regardless of the tax residence of said related parties.
Likewise, the maximum period for submitting the informative return for operations with related parties is May 15 of the year immediately after the end of the fiscal year.
Informative tax return of the financial sector for cash deposits
The obligation that financial system institutions must report taxpayers’ cash deposits, when the accumulated monthly amount of these is greater than 15 thousand pesos, goes from being annual to monthly.
Informative tax return for individuals
The obligation that legal entities must present the informative returns corresponding to the withholding of the tax to the individuals who provide them professional services is eliminated.
Tax Residence
The term of tax residence in Mexico is extended to 5 years, for those taxpayers who failed to prove their new tax residence and for those who, validating it, reside in a REFIPRE, except when there is an information exchange and mutual assistance treaty in the country that is validated.
Notice of transfer of shares made between residents abroad
The new obligation is established that the legal entities of the general regime must submit a notice to the SAT where they report the sale of shares or securities that represent the ownership of goods that are carried out between residents abroad without permanent establishment in the country.
Tax residence of individuals residing abroad
Individuals residing abroad without a permanent establishment in Mexican territory who receive income from the sale or lease of real estate located in Mexico, may consider the address of the person residing in Mexican territory acting on their behalf as tax residence.
RFC of partners, shareholders, or associate’s resident abroad of legal entities and joint ventures resident in Mexico
Legal entities and joint ventures resident in Mexico that have partners, shareholders, or associate’s resident abroad who are not obliged to request their registration in the RFC, when requesting their registration in said registry, they will consign for each of the residents abroad the code in the generic RFC for legal and natural persons respectively.
The foregoing does not exempt the legal person or associate resident in Mexico from submitting to the tax authorities the «Declaration of relationship of partners, shareholders or associate’s resident abroad of legal persons resident in Mexico who choose not to register in the RFC (Official Form 96) «.
Validation of means of contact
The SAT will send the taxpayer an electronic notice annually to validate the means of contact that have been registered and confirmed older than 12 months from the date of validation. If the tax authority cannot contact the taxpayer, it will send a message via tax mailbox (Buzón Tributario in Spanish).
Donations to mitigate the COVID-19 pandemic
The civil organizations and trusts that have the authorization to financially support another civil organization or authorized trust, as well as the donees by law that, in accordance with their corporate purpose or attributions can allocate the donations they receive to mitigate the pandemic COVID 19, must issue the corresponding CFDI regarding the donations they receive for this purpose, indicating in the legend section of the donees’ complement: «COVID-19», in order to become deductible.
Donees authorized to receive deductible donations must also submit a report in accordance with the provisions of procedure sheet 146/ISR «Informative Declaration of donations to mitigate and combat the SARS-CoV2 virus», contained in Annex 1-A. Those who do not file the Informative Declaration or do not indicate in the legend section of the «COVID-19» donee supplement will lose the validity of their authorization for the deduction.
Notice to apply the fiscal stimulus regarding VAT (IVA by its acronym in Spanish) in the northern or southern border region
Individuals or legal entities that choose to apply the fiscal incentive in the northern or southern border region in matters of VAT, must present the «Notice to apply the fiscal incentive in matters of VAT in the northern or southern border region», contained in Annex 1-A.
If one of the requirements to apply this incentive is not met, the taxpayer can no longer apply nor submit the notice mentioned in this section.
Income tax incentive for the northern and southern border regions for taxpayers in RESICO
Taxpayers that pay taxes under the simplified trust regime (known as RESICO) will not be eligible for the income tax incentives in the northern and southern border regions.
At your service,
Partner in tax C.P.A. Mario Enrique Morales mario.morales@bmtc-dfk.com
Staff C.P.A. Carla Torres carla.torres@bmtc-dfk.com
