On December 31, 2016, a decree was published on the journal “Periódico Oficial del Estado de Jalisco”, whereby several articles of the Jalisco Tax Act (Ley de Hacienda del Estado de Jalisco) where amended, those in connection with taxpayer obligations regarding Payroll Tax (Impuesto Sobre Nóminas (ISN)), which became applicable as of January 2017.
The most transcendental amendment in connection with said tax is for companies receiving the rendering of personnel services from a third party, that is, employees hired through “outsourcing” or “insourcing” companies.
By virtue of the foregoing, companies engaging personnel services through a third party (that is, outsourcing / insourcing companies), as of January 2017, shall withhold and pay payroll tax as if these were their own employees.
The foregoing also applies to individuals or companies (regardless of the location of their tax domicile) engaging construction services for real property located in the state of Jalisco.
It is important to highlight that companies under the obligation, pursuant to the preceding paragraphs, shall register as withholders at the tax collection office for their domicile and issue Payroll Tax withholding receipts (monthly or annually) in the form authorized by the competent authorities.
Companies rendering personnel services shall inform the company engaging their services the sum of the payroll and corresponding Payroll Tax (Impuesto Sobre Nóminas (ISN)) for subcontracted personnel. Said tax shall be withheld by the company receiving personnel services and paid to the Secretary of Planning, Administration and Finance (Secretaría de Planeación, Administración y Finanzas (SEPAF).
Payroll tax shall be withheld by the engaging company on each monthly period, failure to do so shall establish the obligation upon the engaging company to calculate the tax as follows:
Total value of services rendered during the month (pursuant to CFDI)
(x) 0.90 Factor
(=) Payroll tax base
(x) Tax rate (2%)
(=) Payroll tax payable for the period.
Through collegiate organisms, a proposal was submitted to the Secretary of Planning, Administration and Finance (Secretaría de Planeación, Administración y Finanzas (SEPAF)) for the state of Jalisco, to comply with aforementioned obligations for the months of January through May 2017 during the month of June 2017, without the determination of surcharges and fines, however it was rejected by the competent authorities.
It is important to mention that those taxpayers under the obligation and, to this date have not complied with the withholding and payment of this tax, shall determine and pay updates and surcharges as of the date the withholding is paid.
Due to the foregoing, we recommend that, if you are under this assumption, contact your executive (from the company providing the personnel service) in order to coordinate the delivery of information from January to date, in order to become regularized and start to comply with this legal provision promptly and avoid sanctions in this regard.
Please contact us if you have any question or need clarification on this matter.