Dear clients & friends,
On November 14th, 2022, a decree was published in the DOF, by which the competent authorities issued the LIF for fiscal year 2023, as well as another Decree by which several provisions of the LDF were amended, added, and repealed. It is worth highlighting that this year, according to official communications, it was published that there would be no amendments made to the RMF, so, consequently, there will be no amendments made to the CFF, LISR, LIVA, and LIEPS. In addition to the above, it is important to point out that on November 22, 2022, the Multilateral Convention to implement BEPS measures were published in the DOF.
Herein you will find a summary of the amendments and additions made to the provisions contained in the aforementioned LIF and the LFD for fiscal year 2023, as well as a brief description of the Convention mentioned in the previous paragraph.
- Federal Revenue Law
- Surcharge rate for the extension for the payment of tax credits: he surcharge rate for extension for the payment of tax credits shall be kept at a monthly rate of 0.98% concerning any unpaid balances (art. 8, section I, LIF).
- Surcharge rates to be applied on the unpaid balances and periods involved, when payment in installments is authorized in terms of the Federal Fiscal Code: (i)26% per month concerning payments in installments of up to 12 months; (ii) 1.53% per month concerning payments in installments of more than 12 months and up to 24 months; and (iii) 1.82% per month concerning payments in installments of more than 24 months, as well as for deferred installment payments (art. 8, section II, paragraphs 1, 2 and 3, LIF).
- The following tax incentives are maintained:
- IT credit against STPS in the case of the acquisition of diesel or biodiesel and its blends: ISR credit against IEPS for individuals or entities engaged in business activities, who obtain a total annual income for purposes of the LISR of less than 60 million pesos (approximately USD$3,000,000.00) in the fiscal year in question, provided that the fuels in question are used exclusively for machinery in general, except vehicles. This incentive shall also be applicable to maritime vehicles that comply with the requirements established by the SAT through general rules (art. 16, paragraph A, section I, LIF). In the case of legal entities engaged exclusively in agricultural or forestry activities. Said entities shall be entitled to request a refund of the IEPS, which they were entitled to credit, instead of making the credit, as long as they import or acquire diesel and biodiesel fuels, as well as its blends, that are allocated for final consumption; however, there is a limit established regarding the refund in question, which consists in the amount that results from multiplying 20 times the annual UMA amount, for each of the partners or associates, without exceeding 200 annual UMAs amount (art. 16, paragraph A, section III, LIF).
- IEPS credit against ISR for transportation. To persons importing or acquiring diesel or biodiesel and its blends for final consumption and for automobile use in vehicles used exclusively for public or private transportation of people or cargo, as well as tourism (art. 16, paragraph A, section IV, FRL).
- Credit of 50% of the expenses incurred for the payment of services for the use of the National Toll Highway Network. To taxpayers engaged exclusively in public and private land transportation of cargo or passengers, as well as tourism using the National Toll Highway Network, who obtain in the fiscal year in which they make use of such infrastructure total annual income of less than 300 million pesos (art. 16, section A, subsection V, FRL).
- IEPS credit against ISR for purchasers of fossil fuels. To taxpayers that use fossil fuels in their production processes of other goods and that in their production process such fuels are not destined for combustion (art. 16, subsection A, section VI, FRL).
- Income tax credit against the special mining tax. To taxpayers holding mining concessions and assignments whose total annual gross income from the sale or disposal of minerals and substances referred to in the Mining Law is less than 50 million pesos (art. 16, subsection A, section VII, FRL).
- Additional deduction for income tax purposes for an amount equivalent to 8% of the cost of acquired books, newspapers and magazines. To taxpayers individuals and legal entities resident in Mexico that sell books, newspapers and magazines, whose total income in the immediately preceding fiscal year has not exceeded the amount of 6 million pesos and whose income represents at least 90% of the total income in the fiscal year in question (art. 16, paragraph A, section VIII, FRL). It is important to mention that the incentives granted in accordance with the LIF will be considered as taxable income for purposes of the LISR, at the time they are effectively credited (article 16, paragraph A, penultimate paragraph, FRL).
- Regarding exemptions: Taxpayers shall be exempted from the payment of the customs processing duty caused by the importation of natural gas, in accordance with article 49 of the LFD (art. 16, subsection B, second-to-last paragraph, LIF).
- Exemptions: The annual withholding base on which financial institutions must withhold income tax payable by holders of equity invested in such institutions increased from 0.08% to 0.15% (art. 21, LIF).
- Federal Law of Fees
- Authorization of visas for family unit or employment offer. Article 14 BIS was added to the LFD, which establishes the payment of a fee for the reception, study of the application, and, as the case may be, the authorization of visas for family unity or employment offer, which are processed before the INM.
- Rendering of consular services. A paragraph g) was added to section III of article 22 of the LFD, concerning the case of authorization and issuance of visas and visas through electronic means. Likewise, a last paragraph was added to section III of article 22 of the LFD, according to which foreign individuals who request a visitor’s visa shall not be obliged to pay the fee established under the aforementioned provision, in the cases that they are considered victims or that can prove that they are relatives of foreign individuals who have disappeared in Mexican territory, or for humanitarian reasons, in accordance with the provisions of the General Law on Victims, the General Law on Forced Disappearance of Persons, Disappearance Committed by Individuals and the National System for the Search for Persons, other national legislation and international treaties to which Mexico is a party.
- Rendering of notarial services in Mexican consular offices. Two paragraphs were added to Article 23 of the LFD. The first of said paragraphs establishes that Mexicans who wish to grant their will in a consular office abroad shall pay 50% of the fee established in section III of said article ($6,605.47MXP; approximately USD$330.00). The second paragraph establishes that the fees obtained for the fractions established in the aforementioned article 23 of the LFD will be allocated for the integration of the fund referred to in section XI of article 2 of the LSEM.
- Performance of procedures related to Sections I and IV of Article 27 of the Mexican Constitution. Section XV was added to article 25 of the LFD, concerning the reception, study, and, if applicable, approval of the waiver agreement for the acquisition, by foreigners, of real estate in Mexico outside of the restricted zone.
- Customs duty on registrations, concessions, and authorizations. A final paragraph was added to Article 40 of the LFD which establishes that the income obtained from the collection of the duties under said article shall be forwarded to SAT, ANAM, or the auxiliary body of the customs administration, as the case may be.
- Services rendered to applicants to obtain a customs patent, authorization as legal representative, customs examiner, customs agent, or customs agency representative and to customs agents or customs agencies. Section IV of Article 51 regarding the study and approval of the articles of incorporation of entities that exploit the customs broker patent was repealed.
- Issuance of documents containing the technical phytosanitary or zoo sanitary requirements for agricultural health procedures. Se derogó el artículo 86-E de la LFD relativo a la expedición del formato de requisitos técnico-fitosanitarios para importación.
- Concerning the granting of the concessions and permits set forth under the Airport Law. Section III of Article 154 of the LFD, regarding permits for the construction and operation of community service aerodromes and modification of community service aerodromes, was repealed.
- Concerning railroad service authorizations. Sections II and III of Article 172-J of the LFD were added, concerning railroad schedules and internal transportation regulations.
- Concerning the Issuance, reissuance, or extension of certificates corresponding to telecommunications. Article 174-J of the LFD was amended, regarding certificates of homologation of products, equipment, devices, or apparatus for telecommunications or broadcasting.
- Concerning copyright services. A paragraph was added to section XII of article 184 of the LFD, concerning the payment exemption for the reception and study of complaints within the settlement procedure when dealing with indigenous and Afro-Mexican people and communities referred to in the Federal Law for the Protection of the Cultural Heritage of Indigenous and Afro-Mexican Peoples and Communities, who assert collective property rights over their cultural heritage, through the settlement.
Likewise, a paragraph was added to section XXI of Article 184 of the LFD, with respect to the International Book Number (ISBN), exempting from the payment of royalties in the case of reproductions in any format, provided they are made for non-profit purposes and for the exclusive purpose of making them accessible to persons with disabilities, as well as the reproduction of works in any format, which are written in the national indigenous languages considered in the catalog referred to in the LGDLPI, provided it is for non-profit purposes and for the purpose of disseminating and preserving them.
- Concerning services provided by the National Water Commission. Article 192-G was added to the LFD regarding the payment of fees for the approval services provided by certification entities, testing laboratories, and verification units, performed by the CONAGUA, pursuant to the conformity of NOMs and standards in water related matters.
- Concerning fees for the use of the radio electric spectrum. Article 245 of the LFD was amended regarding the fee established for the use of the radio electric spectrum, for multichannel microwave links between two terminal stations for public or private telecommunication signal services, and shall be paid annually for each link and per megahertz granted, as follows: (i) for each megahertz granted in bands lower than 1 gigahertz; (ii) for each megahertz granted in bands equal to or higher than 1 gigahertz but lower than 24 gigahertz; and (iii) for each megahertz granted in bands equal to or higher than 24 gigahertz.
In addition, a paragraph was added to said article 245 of the LFD which establishes that in the event that less than one megahertz has been granted in the respective title in the band in question, the proportional part of the fee corresponding to the previous fractions will be paid.
- Participation of the States and Mexico City in revenues from duties. The second paragraph of Article 275 of the LFD was modified, regarding the percentage of participation of total collection in terms of Article 2 of the Fiscal Coordination Law.
- Multilateral Convention on the Implementation of Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
On November 22, 2022, the Decree approving the Multilateral Convention to Implement Tax Treaty Measures to Prevent Base Erosion and Profit Shifting, signed in Paris, France, on November 24, 2016, as well as its reservations and notifications, was published in the DOF.
The abovementioned instrument incorporates the package of measures and/or regulations developed under the OECD and G20 project, i.e., it includes, in broad terms, the following measures:
- Hybrid mechanisms: Transparent entities or entities with dual residency;
- Prevent abuse of tax treaties: For purposes of tax treaties, simplified provision on limitation of profits, dividend transactions, anti-abuse rule for PE located in third jurisdictions, etc.;
- Tackling artificial circumvention of PE status: Artificial circumvention of PE status through commission agreements and similar strategies or through exemptions of specific activities, fragmentation of contracts, ;
- Improving Dispute Resolution: Amicable Procedure; and
- Arbitration: Arbitration
In addition to the abovementioned provisions, it is important to point out that Mexico made a list of reservations and notifications to the instrument of ratification of the Convention, approved by the Senate (Decree published in the DOF on November 22, 2022). It also indicated the agreements it wishes to regulated by the Convention.
ANAM. - National Customs Agency of Mexico (Agencia Nacional de Aduanas de México).
BEPS. - Base Erosion and Profit Shifting.
CCF. - Federal Fiscal Code (Código Fiscal de la Federación).
CONAGUA. - National Water Commission (Comisión Nacional del Agua).
DOF. – Federal Official Gazette (Diario Oficial de la Federación).
EP. - Permanent Establishment (Establecimiento Permanente).
IEPS. - Special Tax on Production and Services (Impuesto Especial sobre Producción y Servicios).
INM. - National Migration Institute (Instituto Nacional de Migración).
ISR. - Income Tax (Impuesto Sobre la Renta).
LIEPS. - Production and Services Special Tax Law (Ley del Impuesto Especial sobre Producción y Servicios).
LFD. - Federal Duties Law (Ley Federal de Derechos).
LGDLPI. - General Law of Linguistic Rights of Indigenous Peoples (Ley General de Derechos Lingüísticos de los Pueblos Indígenas).
LIF. - Federal Income Law (Ley de Ingresos de la Federación).
LISR. - Income Tax Law (Ley del Impuesto Sobre la Renta).
LIVA. - Value Added Tax Law (Ley del Impuesto al Valor Agregado).
LSEM. - Mexican Foreign Service Law (Ley del Servicio Exterior Mexicano).
NOMs- Mexican Official Standards (Normas Oficiales Mexicanas).
OCDE. - Organization for Economic Cooperation and Development (Organización para la Cooperación y el Desarrollo Económico).
SAT. - Tax Administration Service (Servicio de Administración Tributaria).