“Year-end trial balance or aspects from 13th period to consider”
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“Year-end trial balance or aspects from 13th period to consider”
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Taxpayers who were obliged to send the monthly list of accounts and trial balance through the 2015 tax mailbox have already fulfilled the aforesaid obligation.  However, the sending of the year-end trial balance or the trial balance for the 13th period as it is known remains in a pending-send state. 

The Periodic Amendments establishes a deadline for sending the year-end trial balance for for individuals or legal entities for 2016 as April 20th and May 22nd respectively. Nevertheless, the inability to generate a trial balance for the 13th period has been detected in several accouning systems. Even more worrisome is that the same tax mailbox as of today does not have the capability to recognize this file from the 13th period which corresponds to the trial balance. 

In compliance with question No. 49 from the frequent questions section of electronic accounting from the webpage of the Mexican Tax Administration Service [in Spanish: SAT], it mentions that the memorandum accounts that the taxpayers use and register for calculating the tax amount for the period are in accordance with the tax provisions, and that the calculation be made annually. They can be reported at the end of the year in the corresponding 12th or 13th trial balance. 

In order to perform a proper compliance of this obligation, taxpayers will have to send the year-end trial balance with the related tax adjustments, entering in accounting the memorandum accounts that appear in Annex 24 (I am attaching the grouping codes from SAT). Some examples of the memorandum accounts are: 

- UFIN [in Spanish: Net Fiscal Benefit] for year. 

- CUFIN [in Spanish: Income After Taxes] for year.

- Tax deductible investment.

- Tax profit or loss from sale and/or write off of fixed asset.

- Deduction adjusted annually for inflation.

- VAT tax credit [in Spanish: IVA] and the Special Tax on Production and Services [in Spanish: IEPS] for the importing of goods for certified companies. (Verify amounts with your foreign trade advisor). 

In light of the foregoing, taxpayers who are obliged to send the trial balance face the following problems: 

  1. 1.- Must tax adjustments that make reference to Rule 2.8.1.4 be entered into memorandum accounts that refer exclusively to items that are not registered in accounting?  That is, must they be adjusted annually for inflation, tax depreciation, CUCA [in Spanish: Capital Contributions Account], CUFIN [in Spanish: Income After Taxes], tax losses, etc.? 
  1. 2.- What happens to non-deductible items such as exempt income for employees, financial provisions, a reserve for uncollectible accounts, etc.? These accounts must be recorded with registration codes 899.01 and 899.02 that correspond to other memorandum accounts 
  1. 3.- The authorities expect the taxpayer to register all of the included items in the book to tax reconciliation and to arrive at a tax result such as: non-accounting revenue, deduction allowable for tax purposes, non-accounting tax deductions, and non-taxable income. 
  1. 4.- When you send the adjusted year-end trial balance, the electronic application of SAT takes into account the aforesaid Balance No. 13 as if it were a balance from March 2015. It also includes the converter tool in Excel where Balance No. 13 is provided to us. In the moment it is sent the SAT system generates it as if it were a balance from March 2015.

5.- Will taxpayers who send the year-end trial balance for the 2015 tax year, in accordance with the previous paragraph and during the month of April, have to file supplementary information of the balance sheets and list of accounts for January, February, and March of 2016?  This is derived from information that is contained in the memorandum accounts. 

  1. 6.- Does any movement that groups together the memorandum accounts also imply having to send the list of accounts? 
  1. 7.- What will the registration obligations be for the memorandum accounts in 2016? That is, will taxpayers again have recourse to what is stated on the webpage of SAT, through question No. 49, in the frequent questions section of electronic accounting? This mentions that the memorandum accounts of taxpayers be used and registered for calculating the tax for the year according to the tax provisions; and that the calculation be done annually and be reported at year’s end in the 12th or 13th balance that corresponds to it. 

Penalties

The Mexican Internal Revenue Code [in Spanish: el Código Fiscal de la Federación], has established fines from $5,000.00 to $15,000.00 for not entering the accounting information through the webpage of the Mexican Tax Administration Service [in Spanish: el Servicio de Administración Tributaria, (SAT)], as envisaged by article 28 section IV of the same Code; within the established periods in the tax provision, and being obligated as such to it. 

We have been in touch with the tax authorities for the purposes of asking them to publish the registration guidelines and to send the year-end trial balance for 2015, since there is a lack of clarity of just how to comply with the aforesaid provision. 

We will bring this matter to your attention through a newly published news bulletin as soon as more information is available. 

Do not hesitate to contact us if you have any further questions in this regard.
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