The new tax rates for natural persons (Annex 8 of the Income Tax Law).

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The new tax rates for natural persons (Annex 8 of the Income Tax Law).

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On January 11, 2021, Annex 8 of the Miscellaneous Tax Resolution for 2021 was published in the Official Gazette of the Federation, which contains the new rates for calculating the income tax withholding for individuals.

Why do the rates change?

Article 152 of the LISR last paragraph indicates that when the accumulated inflation since the last update of the amounts established in national currency in this article's rates and Article 96 of LISR exceeds 10%, said amounts must be updated.

Update factor.

The last rate update was carried out in December of 2017, which entered into force on January 1, 2018, to November 30, 2020. We would be in the established assumption that inflation exceeded the specified parameter, 11.42 %.

What is the impact?

The increase in inflation generates a decrease in income tax for individuals, and an increase in net income will be seen.

In the next scheme, the applicable rate during 2021 is to calculate the monthly provisional payments and the employment subsidy table.

Rate applicable during 2021 to calculate the monthly provisional payments

Lower limit $	Upper limit S	Fixed Fee $	Percent to be applied on the excess of the lowe limit %
0.01	644.58	-	1.92
644.59	5,470.92	12.38	6.40
5,470.93	9,614.66	321.26	10.88
9,614.67	11,176.62	772.10	16.00
11,176.63	13,381.47	1,022.01	17.92
13,381.48	26,988.50	1,417.12	21.36
26,988.51	42,537.58	4,323.58	23.52
42,537.59	81,211.25	7,980.73	30.00
81,211.26	108,281.67	19,582.83	32.00
108,281.68	324,845.01	28,245.36	34.00
324,845.02	Onwards	101,876.90	35.00

Subsidy table for monthly employment (No update)

Amount of income that serves as the basis for calculating the tax For income of $	Amount of income that serves as the basis for calculating the tax Up to income of $	Amount of allowance of daily employment $
0.01	1,768.96	407.02
1,768.97	2,653.38	406.83
2,653.39	3,472.84	406.62
3,472.85	3,537.87	392.77
3,537.88	4,446.15	382.46
4,446.16	4,717.18	354.23
4,717.19	5,335.42	324.87
5,335.43	6,224.67	294.63
6,224.68	7,113.90	253.54
7,113.91	7,382.33	217.61
7,382.34	Onwards	0.00

All taxpayers must update their payroll systems rates so that the ISR withholding and/or the Employment Subsidy are calculated correctly from January 2021.

Attached hereto is the complete document published in the DOF, which contains the Annex 8, starting on page 84. You can find all of the applicable rates according to payment periodicity.

https://www.dof.gob.mx/nota_detalle.php?codigo=5609674&fecha=11/01/2021.

Derived from the above in J.A. Del Rio, we are at your service to answer any questions in this regard.