Dear clients and friends,
As a consequence of recent reforms to the Federal Tax Code (“FTC”), applicable as of January 1st, 2021, we would like to point out a few relevant topics:
- Spin-off: With the intention of eliminating cases where the original entities transmit to the spun-off entities values that were inexistent before the spin-off, the limits to joint responsibility for these types of operations have been modified for cases in which, derived from the transmission of assets, liabilities and capital, an item is generated that was not registered in the stockholders’ equity accounts in the statements of financial position approved by the shareholders or partners meeting that resolved about the spin-off. This provision is a consequence of the reform to Article 14-B of the FTC, which establishes that it will be considered that a sale has taken place in the described scenario, even if the other requirements of such provision are complied.
- Permanent Establishment (“PE”): Mexican residents and foreign residents with a PE in Mexico will be jointly liable when they perform operations with foreign related parties, where an effective control exists, should such foreign related parties constitute a PE in Mexico because of said operations.
Federal Taxpayers Registry (“FTR”)
- Notice of modification of partners, shareholders or analogous figures: An obligation is established for entities to file before the FTR a notice regarding changes in their partners and shareholders, clarifying that for 2021 this obligation also includes other persons, regardless of the name given to them, that because of their nature they form part of the organic structure and have such character in terms of the bylaws or legislation of incorporation, every time that a modification or inclusion of those persons is made by the entity.
- Suspension or reduction of obligations of taxpayers registered before the FTR: Tax authorities will have powers to suspend or reduce the obligations of taxpayers registered before the FTR, in case they have not performed activities in the last 3 (three) tax years.
- Additional requirements for the notice of cancellation before the FTR: Taxpayers that file a notice of cancellation before the FTR because of the total liquidation of assets, merger or cease of operations, will have to comply with the requirements established in general rules, such as: i) not being subject to a tax audit or having tax credits pending payment; and ii) not being listed in terms of what is established in Articles 69, 69-B and 69-B Bis of the FTC, among others.
Presumption of an unduly transmission of the right to apply tax losses
- A new case is established referred to when the tax loss is generated because of deductions which corresponding payment derives from implementing any legal figure, not only when it derives from the subscription of credit titles, but only when the acquired obligation is extinguished through a form of payment that is different from the ones provided in the Income Tax Law.
- Likewise, the tax authorities, after having performed a tax audit, may consider the unduly transmission of the right to apply tax losses as a simulation of acts for purposes of the tax crimes established in the FTC.
- This infraction, when not successfully overturned, will also imply the cancellation of digital seals (necessary for digital invoicing).
Should you have any questions related to the foregoing, please do not hesitate to reach out to your usual contact at the Firm
Tax Consulting & Litigation