Law for the Promotion of Public Confidence

Dear Clients and Friends:

As part of its policy to counter corruption, the Federal Executive issued the Law for the Promotion of Public Confidence (“LPPC”), aimed at reinforcing credibility in public institutions. Published in the Federal Official Gazette on January 20, the LPPC offers benefits and administrative advantages to entities and individuals who comply with their tax and regulatory obligations.

The most important aspects of the LPPC, which entered into force on January 21, are as follows:

1. The Ministry of Economy (“Ministry”), through the National Regulatory Improvement Commission, will be responsible for the implementation of the LPPC.

2. The LPPC provides for the creation of the Single Register of Citizen Confidence (“Register”), in which individuals and entities who are up to date with their tax and regulatory obligations may enroll voluntarily and free of cost.

3. The Register will gather at least the following data:

1. Name of the individual or entity.
2. Name of the legal representative, where appropriate.
3. Address.
4. Description of economic activity.

4. Registration shall confer the benefits and administrative advantages determined by the Ministry, which may be consulted before the enrollment.

5. Those who subscribe to the Register must manifest that they are committed to continuing to fulfill their obligations.

6. Anyone may request their removal from the Register, which will not imply any verification visits by the authority.

7. To select the beneficiaries, the Ministry will analyze the information provided to the Register.

8. The Ministry will act in coordination with public institutions in order to suspend all monitoring, inspection and verification visits from inspectors and executors for those elected as beneficiaries.

9. Those who submit false information in their registration, engage in business malpractice or operate irregularly, will be suspended from the Register and lose all benefits for 1 year, after which they will be able to enroll again, provided that they normalize their situation. In the event of recidivism, registration shall be suspended for 5 years.

10. In case of loss of registration, verification visits will be reinstated as ordered by the competent authorities.
    

    Tax Consultancy and Litigation

    Felipe Mendoza [email protected] Fernando Holguín [email protected] Arturo Bañuelos [email protected] Edmundo Hernández [email protected] Franco Herrera [email protected]