On August 20th, 2019, the “First Amendment Resolution to the Miscellaneous Tax Resolution for 2019 and its exhibits 1 and 1-A” were published in the Federal Official Gazette. The most important items are summarized below:
Elimination of rules regarding subcontracting matters:
The publishing of this first amendment resolution to the MTR (RMF) for 2019 repeals the rules regarding compliance with tax obligations in connection with Income Tax and Value Added Tax (VAT) upon the contracting party and contractor on labor subcontracting activities. The eliminated rules are the following:
a) Compliance of obligations upon contracting party and contractor in labor subcontracting activities;
b) Compliance of obligations regarding the rendering of services other than subcontracting;
c) Proceeding for contractors with labor subcontracting activities to authorize their contracting parties;
d) Proceeding whereby the contracting party executes consult on the information authorized by the contractor on labor subcontracting activities; and
e) Procedure to be observed by the contracting party in order to request clarifications regarding labor subcontracting on the functionality of the applicative;
Under a transitory provision, taxpayers are informed that as of August 1, 2019, the requirements on deduction and accrediting established on the VAT and Income Tax Acts shall be complied regarding labor subcontracting.
In addition, it mentions the information submitted through the SAT’s subcontracting web tool shall be kept on the tax authority’s database; therefore, it may be used by tax authorities in the exercise of their verification authority.
Requirements for filing Annual Informative Tax Returns on Related Parties
This rule establishes that taxpayers under the obligation to file an information return on related parties shall submit it through the SAT’s website and as a requirement, they shall have a current e.signature.
Additionally, the method for completion has changed, from DIMM to online.
Information on the Master Annual Informative Return on Related Parties for a multinational business group
This rule mentions that taxpayers under the obligation to file the Master annual Informative Tax Return on Related Parties may submit the information prepared by a foreign entity part of the same group provided it is filed by the obliged taxpayer in Spanish or English and online through SAT’s website.
Deduction of transfer pricing adjustments in the fiscal year the income or deductions derived from transactions with related parties originating these were recognized
The amendment to this rule is in order to establish other requirements regarding transfer pricing adjustments (whether voluntary or compensatory) performed by taxpayers which are the following:
a) Obtain and preserve a brief signed by the person who prepared the respective documentation and information establishing the reason why the prices, consideration amounts or profit margins originally agreed, did not match those determined by independent parties in comparable transactions.
b) Obtain and preserve a brief signed by the person preparing the respective documentation and information explaining the consistency or inconsistency in the application of transfer pricing methodologies by the taxpayer and the search of comparable transactions or companies.
Aforementioned requirements shall be carried out no later than the date when the taxpayer shall file the tax return for the fiscal year when the income and/or deductions were acknowledged.
Federal Tax Code
Compliance with the obligation to file a compensation notice
Taxpayers filing interim tax returns, whether final, provisional or annual through the “Return and Payment Service” whereby the result is a tax payable as a result of their own liability and who choose to pay it by compensation of sums in its favor stated by the same Return and Payment Service and that are for the same tax, shall be deemed in compliance with the obligation to submit the corresponding compensation notice.
Although this rule existed in prior miscellaneous resolutions, MTR for 2019 did not mention this facility derived from the elimination of universal compensation and this amendment brings back this administrative facility.
Registration on Taxpayers Federal Registry (RFC)
The rule mentioning the proceeding to register individuals and companies, as well as residents abroad with or without a permanent establishment on the taxpayers’ registry is eliminated.
This rule allowed future taxpayers to have a guide of the requirements in order to obtain their Federal Taxpayers’ Registry.
Payment of expenses through third parties
This rule is amended to indicate that the account where the third party shall identify the sums of money provided by the taxpayer in order to make payments on its behalf, it shall be a separate accounting account.
The term is also modified where, in the event there is a remainder after discounting the expenses paid on behalf of the taxpayer, the third party shall return them to the former no later than the last day of the fiscal year when the money was delivered (previously it stated that this refund should be carried out no later than within a 60 day term).
Registration request for the “Northern border region stimuli beneficiaries’ registry”, regarding Income Tax
This rule is amended to indicate SAT shall register taxpayers requesting as much into the “Northern border region stimuli beneficiaries registry”, within the month following their date of registration in the RFC or filing of a notice of branch office opening, following the requirements set forth in the proceeding document; provided all requirements established on aforesaid Decree have been complied with.
In the event the authority informs the taxpayer through the Tax Mailbox that a requirement has not been met, the latter may file a new registration request for the “Northern border region stimuli beneficiaries’ registry”, provided the term granted for this purpose is still in effect.
A transitory provision establishes that for taxpayers who submitted their application for entry prior to the 2019 MTR becoming effective, there will be no need to submit a request for registration on the “Northern border region stimuli beneficiaries’ registry” for Income Tax purposes, as mentioned on this rule.
Renewal application for “Northern border region stimuli beneficiaries’ registry” for Income Tax purposes
This rule is added to establish taxpayers interested in renewing the registration authorization to the “Northern border region stimuli beneficiaries’ registry” shall file the application included in the documents for the proceeding “Registration application for the Northern border region stimuli beneficiaries registry”.
The renewal application mentioned on the preceding paragraph shall be submitted no later than the date for filing the annual tax return for the fiscal year immediately prior to the year for which said renewal is being requested. The authority shall inform as to the acceptance of said application through the Tax Mailbox.
Notice to be removed from the “Northern border region stimuli beneficiaries’ registry” for Income Tax Purposes
This rule is added to indicate that taxpayers requesting removal from the “Northern border region stimuli beneficiaries’ registry” shall request this in accordance with the proceeding document “Notice of removal from the Northern border region stimuli beneficiaries’ registry”. In the event the taxpayer files a notice on suspension of activities or any other cancellation notices on the Taxpayer Federal Registry (RFC), the tax authority shall consider that said notice also includes a notice to be removed from the “Northern border region stimuli beneficiaries’ registry”.
Please do not hesitate to contact us if you have any question or need a consult regarding this matter.