Annexes 3 and 7 of the General Fiscal Resolution for 2024, published on December 29, 2023

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DOF: 05/01/2024

ANNEXES 3 AND 7 OF THE GENERAL FISCAL RESOLUTION FOR 2024, PUBLISHED ON DECEMBER 29, 2023

At the margin, a seal with the National Coat of Arms, which says: United Mexican States.- TREASURY.- Ministry of

Finance and Public Credit.- Tax Administration Service.

ANNEX 3 OF THE GENERAL FISCAL RESOLUTION FOR 2024

Compilation of non-binding fiscal criteria

For the purposes of Article 33, fraction I, subsection h) of the CFF, in relation to Rule 1.9., fraction III,

the non-binding criteria of the fiscal provisions are made known as follows:

Content

A.

Current

I.

CFF Criteria

1/CFF/NV

Delivery or making available of the CFDI. The obligation is not fulfilled when

the issuer only sends a link to a webpage.

2/CFF/NV

Disclosure of generalized reportable schemes. Making it appear that they have the

character of personalized reportable schemes is contrary to what is established by the

applicable legal provisions.

3/CFF/NV

Evasion of the effects of the temporary restriction or cancellation of the use of the

CSD.

II.

ISR Law Criteria

1/ISR/NV

Permanent establishment.

2/ISR/NV

Alienation of fixed asset goods.

3/ISR/NV

Reserves for pension or retirement funds. Interest derived from the investment or reinvestment of the funds is not deductible.

4/ISR/NV

Royalties for intangible assets originated in Mexico, paid to related parties

residing abroad.

5/ISR/NV

Surety institutions. Payments for claims.

6/ISR/NV

Expenses in favor of third parties. Those incurred in favor of

persons with whom there is no labor relationship nor do they provide professional

services are not deductible.

7/ISR/NV

Deduction of Investments regarding fixed assets.

8/ISR/NV

Financial system institutions. Withholding of ISR on interest.

9/ISR/NV

Disincorporation of controlled societies.

10/ISR/NV

Returns on goods delivered in trust, which are solely destined to

finance education.

11/ISR/NV

Indemnities for work risks or diseases.

12/ISR/NV

Alienation of real estate certificates.

13/ISR/NV

Application of the articles of the treaties to avoid double taxation that Mexico

has in force, regarding the imposition on branches.

14/ISR/NV

Cooperative societies. Salaries and social security.

15/ISR/NV

Improper deduction of losses from the alienation of bare ownership of goods

granted in usufruct.

16/ISR/NV

Gains obtained by residents abroad in the alienation of real estate shares.

17/ISR/NV

Subcontracting. Withholding of salaries.

18/ISR/NV

Simulation of certificates.

19/ISR/NV

Deduction of payments to unions.

20/ISR/NV

Losses from the alienation of shares. The obligation of controlling societies to

pay the ISR that had been deferred due to its decrease in the determination of

consolidated fiscal result.

21/ISR/NV

Social security for the purposes of determining ISR. It cannot be granted in cash or in other equivalent means.

22/ISR/NV

Investments in automobiles. They are not deductible when they correspond to automobiles granted in loan for use and which are not used for the realization of activities proper to the taxpayer.

23/ISR/NV

Means of payment in medical, dental, psychology, nutrition or hospital services expenses.

24/ISR/NV

Delivery of donations to teaching institutions when they are not onerous, nor remunerative.

25/ISR/NV

Cost of goods sold. Regarding services derived from real estate construction contracts, costs corresponding to income not accumulated in the fiscal year are not deductible.

26/ISR/NV

Payment of salaries, wages or assimilated to these through unions or labor subcontracting service providers.

27/ISR/NV

Deduction of fixed asset goods subject to a financial lease contract.

28/ISR/NV

Federal rights of athletes. Their acquisition constitutes an investment in the mode of deferred expense.

29/ISR/NV

Investment of resources returned to the country in shares issued by resident legal entities in Mexico.

30/ISR/NV

Income obtained by residents abroad, from leasing or bareboat charter of vessels or naval artifacts with hull, with source of wealth in territorial national waters.

31/ISR/NV

Sports Associations.

32/ISR/NV

Determination of the cost of goods sold for taxpayers who carry out commercial activities consisting in the acquisition and alienation of merchandise.

33/ISR/NV

Recognition of unique and valuable contributions. They must be recognized in transfer pricing analyses to demonstrate that, in transactions with related parties, the taxable income and authorized deductions were determined considering for those transactions the prices, amounts of consideration or profit margins that would have been used or obtained with or among independent parties in comparable transactions.

34/ISR/NV

Modifications to the value of transactions with related parties within the interquartile range.

35/ISR/NV

Accommodation services through technological platforms. They are subject to the payment of ISR.

36/ISR/NV

Payment of tax on dividends distributed in recognized foreign markets.

37/ISR/NV

Fiscal result distributed to holders of certificates of a trust dedicated to the acquisition or construction of real estate. The deduction referred to in Article 115, second paragraph of the ISR Law is not applicable to it.

38/ISR/NV

Payment of deferred ISR by the settlors of a trust dedicated to the acquisition or construction of real estate. The donation of the participation certificates obtained by the contribution of real estate goods updates the assumption of alienation.

39/ISR/NV

Authorized Donee. Modification of the bylaws or the trust contract.

40/ISR/NV

For the purposes of Article 3-B of the LCF. Participable ISR is understood as that which is paid in cash, check or transfer.

41/ISR/NV

Deteriorated merchandise or that lost value. The amount of merchandise that is deducted from the taxpayer's inventories does not constitute a deductible donation.

42/ISR/NV

Amounts granted to workers from pension plans. They do not have the treatment of exempt income for the worker, nor are contributions to such plans a deduction for the employer, when they constitute amounts that are part of the salary subject to the payment of ISR.

43/ISR/NV

Amounts delivered to workers, partners or shareholders for the concept of labor incentives, bonuses, commissions or complementary compensations for invention, premiums or any other similar concept, paid through third parties. They do not have the treatment of exempt income, nor are the amounts paid to third parties deductible, nor is the VAT transferred by said payments creditable.

III.

IVA Law Criteria

1/IVA/NV

Prepared foods for consumption at the place of their alienation by the so-called convenience stores.

2/IVA/NV

Prepared foods.

3/IVA/NV

International roaming service.

4/IVA/NV

Provision of services in national territory through the figure of commercial agent.

5/IVA/NV

Alienation of salvaged effects.

6/IVA/NV

Withholding to residents abroad without permanent establishment in the country.

7/IVA/NV

VAT in air transportation that starts in the border strip. It cannot be considered as provided only 25% of the service.

8/IVA/NV

Improper transfer of VAT. Transport of goods does not correspond to the service of harvest and collection.

9/IVA/NV

Improper credit of VAT.

10/IVA/NV

Real estate goods destined for lodging, through technological platforms.

11/IVA/NV

It is inappropriate to credit VAT without complying with the requirements established by law, as well as the compensation of VAT balances in favor against ISR withholdings, regarding the Federation, Mexico City, the States and the Municipalities.

IV.

IEPS Law Criteria

1/IEPS/NV

Base on which the IEPS rate will be applied when the service provider provides terminal telecommunications equipment or grants its use or temporary enjoyment to the service recipient, regardless of the legal instrument used to provide the service.

2/IEPS/NV

Services offered jointly with Internet.

3/IEPS/NV

Products that by their ingredients are located in the definition of chocolate or products derived from cocoa, regardless of their commercial denomination or the way in which they are suggested to be consumed, are taxed for IEPS purposes.

4/IEPS/NV

Taxable base of IEPS in the provision of games with bets and raffles services.

5/IEPS/NV

Amounts to be decreased as prizes to determine the taxable base of IEPS in the provision of games with bets and raffles services.

V.

LISH Criteria

1/LISH/NV

Condensates and natural gas. They are distinct concepts for determining the base of the rights for shared utility and extraction of hydrocarbons for the assignees.

2/LISH/NV

Permanent establishment for the purposes of the LISH. Exploration and extraction of hydrocarbons are not the only activities by which it can be constituted.

VI.

LIF Criterion

1/LIF/NV

Fiscal incentive for taxpayers who import or acquire diesel or biodiesel and its mixtures for automotive use in vehicles that are destined exclusively to transport. Its amount must be determined considering the IEPS that has effectively been incurred.

VII.

LFD Criteria

1/LFD/NV

Extraordinary Right on Mining. The recognition of income must be effected at the moment of the alienation or sale of gold, silver and platinum, regardless of the moment in which the consideration is received.

2/LFD/NV

Extraordinary Right on Mining. The base for calculating the payment of the right corresponds to the total income of the period without any decrease.

3/LFD/NV

Special Right on Mining and Extraordinary Right on Mining. The acquirers of the title of a concession or of the rights relative to this, who obtain income from the extractive activity or alienate gold, silver and platinum, are obligated to its payment.

4/LFD/NV

Special Right on Mining. Deduction of fixed asset investments.

5/LFD/NV

Special Right on Mining. For its determination, the deduction of fixed asset investments, deferred expenses and deferred charges is inappropriate.

6/LFD/NV

Special Right on Mining. The acquisition of mining concessions does not have the nature of an investment made for mining prospecting and exploration, therefore its deduction for the determination of the cited right is inappropriate.

B.

Repealed

I.

ISR Law Criteria

10/ISR/NV

Investments made by civil organizations and trusts authorized to receive deductible donations.

14/ISR/NV

Universal civil societies. Income in the concept of food.

19/ISR/NV

Deduction of frozen inventories.

20/ISR/NV

Negative Inventories.

21/ISR/NV

Free provision of a service to civil organizations and trusts authorized to receive deductible donations.

25/ISR/NV

Expenses incurred by commercial activities contracted to a Union.

II.

Criteria of the Law of General Import and Export Taxes

1/LIGIE/NV

General Rule 2 a). Import of unassembled merchandise.

A.

Current

I.

CFF Criteria

1/CFF/NV

Delivery or making available of the CFDI. The obligation is not fulfilled when the issuer only sends a link to a webpage.

Article 29, first paragraph of the CFF establishes the obligation for the taxpayers to issue CFDI by Internet for the acts or activities that they carry out, for the income that is received or for the withholdings of contributions that they make, for which, in accordance with its subsection IV, before its issuance, they must send them to the SAT or to the PCCFDI with the object that they be certified, that is, the compliance with the requirements established in Article 29-A of the same Code be validated, a folio be assigned to it and the digital seal of the SAT be incorporated.

Article 29, fraction V of the cited regulation provides that once the CFDI has been incorporated with the digital seal referred to in the previous paragraph, the taxpayers must deliver or make available to their clients the electronic file of the CFDI and, when requested by the client, its printed representation, so it is considered that the taxpayer who requests the fiscal receipt only needs to provide its RFC key, name or corporate name, postal code of the fiscal domicile and fiscal use that it will give to the fiscal receipt, without the need to exhibit the Fiscal Identification Card or Constancia de Situación Fiscal.

For the above, it is considered that the following carry out an improper fiscal practice:

I.

Taxpayers who do not comply, in the same act and place, with their obligation to issue the CFDI and also with their sending to the SAT or to the PCCFDI with the object that they be certified.

II.

Taxpayers who do not allow, in the same act and place that the client provides their data for the generation of the CFDI.

III.

Taxpayers who, in their establishments, branches or points of sale, only make available to the client a means by which they invite the client to provide their data and, therefore, transfer to the client the obligation to generate the CFDI.

IV.

Taxpayers who condition the issuance of CFDI to the exhibition of the Fiscal Identification Card or Constancia de Situación Fiscal.

V.

Whoever advises, counsels, provides services or participates in the realization or the implementation of any of the above practices.

Origin

First antecedent

Fifth Resolution of Modifications to the RMF for 2014

Published in the DOF on October 16, 2014, Annex 3, published in the DOF on October 17 of 2014.

2/CFF/NV

Disclosure of generalized reportable schemes. Making it appear that they have the character of personalized reportable schemes is contrary to what is established by the applicable legal provisions.

Article 197 of the CFF establishes that, as a general rule, fiscal advisors are obligated to disclose generalized and personalized reportable schemes. Regarding this, Article 199, first and second paragraphs of the CFF dispose that a reportable scheme is considered any plan, project, proposal, advice, instruction or recommendation expressed expressly or tacitly with the object of materializing a series of legal acts, that generates or can generate, directly or indirectly, the obtaining of a fiscal benefit in Mexico and that, in addition, has any of the characteristics indicated in the fourteen subsections of said article.

Article 199, third paragraph of the CFF establishes that a generalized reportable scheme is one that seeks to be marketed massively to all types of taxpayers or to a specific group of them, and although they require minimal or no adaptation to adjust to the specific circumstances of the taxpayer, the way to obtain the fiscal benefit is the same, as well as that a personalized reportable scheme is one that is designed, marketed, organized, implemented or administered to adapt to the particular circumstances of a specific taxpayer.

From the above, it is evident that a generalized reportable scheme has the following characteristics: its object is to be marketed massively to any taxpayer or to a group of them; it requires minimal or no adaptation to adjust to the specific circumstances of the taxpayer; and the way to obtain the fiscal benefit is the same. Consequently, a generalized reportable scheme is one that is substantially identical or similar to another, so it can easily be replicated by any taxpayer or by a group of them and that, if necessary, requires minimal modifications to adapt to the particular situation of said taxpayers.

On the other hand, Article 199, fourth paragraph of the CFF states that the Ministry of Finance and Public Credit, through a ministerial agreement, will issue the parameters on minimum amounts with respect to which what is indicated in the Single Chapter of Title Sixth "On the Disclosure of Reportable Schemes" of the CFF will not apply.

In this sense, the "Agreement by which the minimum amounts with respect to which what is indicated in the Single Chapter of Title Sixth of the Federal Fiscal Code, named "On the Disclosure of Reportable Schemes", published on February 02, 2021 in the DOF, establishes that the provisions provided in the Chapter Single of Title Sixth of the CFF, named "On the Disclosure of Reportable Schemes", will not be applicable, provided that it concerns personalized reportable schemes and the aggregated amount of the fiscal benefit obtained or expected to be obtained in Mexico does not exceed one hundred million pesos.

To this effect, it has been detected that some fiscal advisors deliberately make it appear that reportable schemes that have the characteristics of generalized reportable schemes, have the character of personalized reportable schemes, whose aggregated amount of the fiscal benefit obtained or expected to be obtained in Mexico is less than one hundred million pesos, with the purpose of updating the exception established in the Agreement referred to above, in relation to Article 199, fourth paragraph of the CFF and, consequently, avoid presenting the informative declaration to disclose the generalized reportable scheme.

Regarding this, Article 199, last paragraph of the CFF establishes that any mechanism that avoids the application of said article will be reportable. In this sense, any plan, project, proposal, advice, instruction, recommendation or name that is granted, whether expressed expressly or tacitly, whose purpose is to prevent what is established in Article 199 of the CFF from being updated, is considered a mechanism.

In view of this, not presenting the informative declaration to disclose a generalized reportable scheme, by deliberately making it appear that it has the character of a personalized reportable scheme, whose aggregated amount of the fiscal benefit obtained or expected to be obtained in Mexico is less than one hundred million pesos, with the purpose of avoiding presenting the informative declaration to disclose the generalized reportable scheme, constitutes a mechanism to avoid the application of Article 199 of the CFF.

For the above, it is considered that the following carry out an improper fiscal practice:

I.

Fiscal advisors who do not present the informative declaration to disclose a generalized reportable scheme, by virtue of that deliberately make it appear that a generalized reportable scheme has the character of a personalized reportable scheme, whose aggregated amount of the fiscal benefit obtained or expected to be obtained in Mexico is less than one hundred million pesos, despite the fact that the reportable scheme meets the characteristics of a generalized reportable scheme.

II.

Fiscal advisors who do not present the informative declaration to disclose a mechanism to avoid the application of Article 199 of the CFF, by virtue of that they make it appear that a generalized reportable scheme has the character of a personalized reportable scheme, whose aggregated amount of the fiscal benefit obtained or expected to be obtained in Mexico is less than one hundred million pesos, despite the fact that the reportable scheme meets the characteristics of a generalized reportable scheme.

III.

Whoever advises, counsels, provides services or participates in the realization or the implementation of the above practices.

Origin

First antecedent

First Resolution of Modifications to the RMF for 2021

Published in the DOF on May 3 of 2021, Annex 3, published in the DOF on May 10, 2021.

3/CFF/NV

Evasion of the effects of the temporary restriction or cancellation of the use of the CSD.

In accordance with Articles 17-H and 17-H Bis of the CFF, when the fiscal authorities detect irregular conduct on the part of taxpayers, they may leave without effect or temporarily restrict the use of the CSD for the issuance of CFDI, which represents a consequence for the irregularities detected, reflected in the impediment to issue fiscal receipts, until such time as the irregularities are remedied or disproven by the taxpayers.

In accordance with Article 29, first paragraph of the CFF, when the fiscal laws establish the obligation to issue CFDI for the acts or activities that are carried out, for the income that is received or for the withholdings of contributions that they make, the taxpayers who carry out the corresponding operations are obligated to issue them, likewise, the persons who, among other cases, acquire goods, enjoy their use or temporary enjoyment, receive services, or those to whom contributions have been withheld, must request the respective CFDI.

On the other hand, Article 113 Bis of the CFF establishes a sanction of two to nine years of imprisonment, for whoever, by themselves or through an intermediary, issues, alienates, purchases or acquires fiscal receipts that cover nonexistent operations, false or simulated legal acts.

In this sense, it is evident that, on the one hand, the taxpayers to whom the use of their CSD for the issuance of CFDI has been temporarily restricted or the same has been left without effect, prior to continuing to issue fiscal receipts, must remedy the detected irregularities, or else, disprove the causes that motivated the application of the measure, as appropriate to the procedure in question, and obtain the positive resolution from the SAT, and subsequently, issue the respective CFDI only for the acts or activities that the taxpayers effectively carry out, and on the other hand, that the persons who acquire goods, enjoy their use or temporary enjoyment, receive services, or those to whom contributions have been withheld, must request the CFDI only from the person with whom they celebrated the corresponding operation, thereby avoiding the issuance of fiscal receipts that could cover false or simulated operations.

Regarding this, it has been detected, on the one hand, that some taxpayers to whom the use of the CSD was temporarily restricted or the CSD was left without effect, and who have not yet remedied or disproven the detected inconsistencies, carry out various commercial or corporate acts in which

another legal or natural person issues the receipts that support the operation carried out by the former, thereby evading the impossibility of issuing CFDI, due to being in any of the circumstances referred to in articles 17-H and 17-H Bis of the CFF, and on the other hand, that there are taxpayers who, knowing that the tax receipt was issued by an intermediary, intend to make deductions and/or credits based on said tax receipts.

Therefore, it is considered that improper tax practices are carried out by those taxpayers who:

I.

Their use of their CSD for the issuance of CFDI has been temporarily restricted or the same has been rendered ineffective, and they have not yet remedied the irregularities detected or well, disproved the causes that motivated the application of the measure, as appropriate to the procedure in question, and carry out any act, regardless of the name by which it is called, through which they issue CFDI through an intermediary person.

II.

Issue tax receipts that intend to support acts or activities carried out by a taxpayer whose CSDs have been temporarily restricted or rendered ineffective.

III.

Deduct and/or credit any amount based on tax receipts issued by a person different from the one who acquired goods, enjoyed their temporary use or enjoyment, received services or had contributions withheld, knowing that it updates any of the circumstances referred to in articles 17-H and 17-H Bis of the CFF and is legally prevented from issuing CFDI.

IV.

Who advises, counsels, provides services or participates in the realization or implementation of any of the above practices.

II.

Criteria of the Income Tax Law

1/ISR/NV

Permanent establishment.

In accordance with article 1, fraction II of the Income Tax Law, natural and legal persons are obligated to pay the income tax when it comes to residents in the country who have a permanent establishment in the country, with respect to the income attributable to said permanent establishment.

In accordance with article 2, second paragraph of the Income Tax Law, article 5 of the treaties to avoid double taxation that Mexico has in force and paragraphs 82 to 101 of the Comments to article 5 of the "Model Tax Agreement on Income and Wealth", to which the recommendation adopted by the OECD Council on October 23, 1997 refers, as they were published after the adoption by said Council of the tenth update or that which replaces it, it is considered that the resident in the country has a permanent establishment in the country when he is linked in terms of common law with the acts that are usually carried out by natural or legal persons other than an independent agent on his behalf, with a resident in Mexico.

For the above, it is considered that an improper tax practice is carried out:

I.

The resident in the country who does not pay the income tax in Mexico by considering that he does not have a permanent establishment in the country when he is linked in terms of common law with the acts that are usually carried out by natural or legal persons other than an independent agent on his behalf, with a resident in Mexico.

II.

Who advises, counsels, provides services or participates in the realization or implementation of the above practice.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with the number of non-binding criterion 12/ISR.

2/ISR/NV

Alienation of fixed asset goods.

Article 18, fraction IV of the Income Tax Law establishes that taxpayers who alienate fixed asset goods are obligated to accumulate the gain derived from that alienation. To calculate said gain, the Income Tax Law establishes that it is determined as the difference between the selling price and the original amount of the investment, decreased by the amounts already deducted. The above is specifically derived from what is specified in article 31 of said Law, which establishes that when said goods are alienated, the taxpayer has the right to deduct the part not yet deducted.

Articles 27, fraction IV and 105, fraction IV of the Income Tax Law establish that the deductions of legal and natural persons with business and professional activities must be duly registered in accounting and subtracted only once. Article 147, fraction III of the aforementioned order establishes this last requirement, regarding the deductions of natural persons in the regime of income from leasing and in general for granting the temporary use or enjoyment of real estate; of the regime of income from alienation of goods and regime of income from acquisition of goods.

For the above, it is considered that an improper tax practice is carried out:

I.

The taxpayer who, for the determination of the fiscal profit of the exercise, carries out the deduction of the pending balance to depreciate of those fixed asset goods that he had alienated in the exercise and for which, for the calculation of the gain taxable by the alienation of said goods, he had already considered said deduction, since this constitutes a double deduction that contravenes what is indicated in articles 27, fraction IV, 105, fraction IV and 147, fraction III of the Income Tax Law.

II.

The taxpayer who, for the determination of the fiscal profit of the exercise, carries out the deduction of the pending balance to depreciate of those fixed asset goods that he had alienated through a financial leasing contract in the exercise and for which, for the calculation of the gain taxable by the alienation of said goods, he had already considered said deduction, since this constitutes a double deduction that contravenes what is stated in articles 27, fraction IV, 105, fraction IV and 147, fraction III of the Income Tax Law.

III.

Who advises, counsels, provides services or participates in the realization or implementation of any of the above practices.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006.

3/ISR/NV

Reserves for pension or retirement funds. Interest derived from the investment or reinvestment of funds is not deductible.

In accordance with article 29 of the Income Tax Law and 35 of its Regulations, the interest derived from the investment or reinvestment of funds destined for the creation or increase of reserves for the granting of pensions or retirements of personnel, complementary to those provided for in the LSS and of seniority premiums, are not deductible for the taxpayer (trustor).

Since said trustor through the trust constitutes an autonomous patrimony, in virtue of the fact that the goods delivered leave his patrimony and its ownership is attributed to the trustee, for the realization of a determined purpose, in which case the interest in question no longer affects the patrimony of the trustor positively or negatively, especially since they do not derive from an expenditure that he had made.

For the above, it is considered that an improper tax practice is carried out:

I.

The trustor who deducts the interest derived from the investment or reinvestment of the funds destined for the creation or increase of reserves for the granting of pensions or retirements of personnel, complementary to those provided for in the LSS and of seniority premiums.

II.

Who advises, counsels, provides services or participates in the realization or implementation of the above practice.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with the number of non-binding criterion 4/ISR.

4/ISR/NV

Royalties for intangible assets originating in Mexico, paid to related parties resident in the country.

Articles 27 and 105 of the Income Tax Law establish the requirements that deductions must meet and the specific cases in which they must be granted, regarding legal persons and natural persons with business and professional activities.

For the above, it is considered an improper tax practice:

I.

Deduct the royalties paid to related parties resident in the country for the use or temporary enjoyment of intangible assets, which have had their origin in Mexico, had previously been the property of the taxpayer or any of its related parties resident in Mexico and their transmission had been made without receiving any consideration or at a price lower than market price; since the need for migration and therefore the subsequent payment of the royalty is not justified.

II.

Deduct the investments in intangible assets that have had their origin in Mexico, when they are acquired from a related party resident in the country or this related party changes its fiscal residence to Mexico, unless said related party had acquired said investments from an independent party and proves having effectively paid its acquisition cost.

III.

Deduct the investments in intangible assets, which have had their origin in Mexico, when they are acquired from a third party who in turn has acquired them from a related party resident in the country.

IV.

Advise, counsel, provide services or participate in the realization or implementation of any of the above practices.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with the number of non-binding criterion 1/ISR.

5/ISR/NV

Surety institutions. Payments for claims.

Article 27, fraction I of the Income Tax Law establishes as a requirement of deductions that they are strictly indispensable for the purposes of the taxpayer's activity.

Article 32 of the Law of Insurance and Surety Institutions states that the object of surety institutions consists predominantly in granting sureties on an onerous basis.

Articles 167, 168 and 171 of the Law of Insurance and Surety Institutions essentially establish that surety institutions must have sufficiently guaranteed the recovery of the amount of the responsibilities they incur through the granting of sureties, in addition to reasonably estimating that the guaranteed obligations will be fulfilled.

Regarding this, it is important to highlight that the surety institution constitutes a creditor of the surety once the surety becomes due and carries out the payment for the corresponding claim, and therefore, has a credit in its favor for the amount paid.

Thus, payments for claims derived from obligations covered by surety, in the face of the practical impossibility of collection or the prescription of the right to collect from the surety, can be considered uncollectible credits, which could eventually be deductible in accordance with what is established in article 25, fraction V of the Income Tax Law, provided that the requirements provided for in article 27, fractions I and XV of the same order are met, according to which it is required that it be a strictly indispensable expenditure and that the prescription term elapses, or before, if the practical impossibility of collection is notorious.

In that sense, when surety institutions do not fulfill their obligation to have the granted surety sufficiently guaranteed in terms of the law on the matter, the losses from uncollectible credits that originate due to the notorious practical impossibility of collection or prescription of the right to collect from the claims derived from obligations covered by surety, do not meet the legal requirement for their deduction; since such risky operations originated under the strict responsibility of the surety institutions, making prone a situation of unnecessary expense for the company itself, that is, they do not constitute a strictly indispensable expense for the surety institutions; since the non-observance of the obligations derived from the law on the matter by the surety institutions for the achievement of their object, cannot justify a deduction for purposes of the Income Tax Law.

Finally, it is clarified that surety companies should not consider deductible the payments for third-party claims, since the fact that the surety pays the surety that is claimed against it, produces the incorporation of a credit right consisting in the legal possibility of making effective the counter-guarantee stipulated in the contract, which is not located in the hypotheses referred to in article 25 of the Income Tax Law, highlighting in any case, that only losses from uncollectible credits derived from claims paid by surety institutions that comply with the requirements of the Law of Insurance and Surety Institutions and those established in the tax provisions would be deductible.

For the above, it is considered an improper tax practice:

I.

Deduct the amount of payments for claims derived from obligations covered by surety for the purposes of the Income Tax Law.

II.

Deduct as losses from uncollectible credits those that derive from payments for claims originated from the obligations of a surety, without complying with the applicable recovery precautionary provisions nor the requirements established in the provisions of the Income Tax Law on deductions.

III.

Advise, counsel, provide services or participate in the realization or implementation of any of the above practices.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with the number of non-binding criterion 8/ISR; RMF 2016, published on December 23, 2015, Annex 3, published on January 12, 2016.

6/ISR/NV

Expenses in favor of third parties. Those carried out in favor of persons with whom there is no labor relationship nor provide professional services are not deductible.

Article 27, fraction I of the Income Tax Law establishes that the deductions authorized in Title II of said Law must be strictly indispensable for the purposes of the taxpayer's activity.

Likewise, fraction XI of the aforementioned article provides, contrary sensu, that social welfare expenses will not be deductible when the benefits are not granted in a general manner for the benefit of all workers.

Similarly, article 28, fraction V of the Income Tax Law indicates that per diems or travel expenses, in the country or abroad, will not be deductible when they are not destined for lodging, food, transport, use or temporary enjoyment of automobiles and payment of mileage, of the beneficiary of the per diem and that the persons in whose favor the expenditure is made, must have a labor relationship with the taxpayer in terms of Chapter I of Title IV of said Law or must be providing professional services, in addition to the fact that the expenses must be supported with a tax receipt when they are carried out in national territory or with the corresponding supporting documentation, when they are carried out abroad.

In that sense, expenditures are not strictly indispensable those that are carried out when there is no labor relationship or provision of professional services between the person in whose favor said expenditures are made and the taxpayer who intends to carry out its deduction, even if such expenditures were destined to personnel provided by third-party companies.

For the above, it is considered that improper tax practices are carried out:

I.

Taxpayers who carry out the deduction of social welfare expenses, per diems or travel expenses, in the country or abroad when there is no labor relationship or provision of professional services between the person in whose favor said expenditures are made and the taxpayer.

II.

Who advises, counsels, provides services or participates in the realization or implementation of the above practice.

Origin

First antecedent

RMF for 2013

Published in the DOF on December 28, 2012, Annex 3, published in the DOF on December 31, 2012, with the number of non-binding criterion 8/ISR.

7/ISR/NV

Deduction of Investments regarding fixed assets.

Article 25, fraction IV of the Income Tax Law states that taxpayers may carry out the deduction of investments.

The fixed asset, being considered an investment in accordance with what is provided in articles 31 and 32, first and second paragraphs of the Income Tax Law, is only deducted through the application, in each exercise, of the maximum authorized percentages that said Law establishes on the original amount of the investment.

For the above, it is considered an improper tax practice:

I.

Deduct investments in fixed asset, giving them the fiscal treatment applicable to expenses, as happens with the following acquisitions:

a)

Of cable to transmit data, voice, images, etc., unless it is about acquisitions for maintenance or repair purposes.

b)

Of goods, such as refrigerators, coolers, returnable containers, etc., that are made available to retailers who sell soft drinks and beers at retail.

II.

Advise, counsel, provide services or participate in the realization or implementation of the above practices.

Origin

First antecedent

Ninth Resolution of

Modifications to the RMF for

2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with the number of non-binding criterion 3/ISR.

8/ISR/NV

Financial system institutions. Withholding of income tax on interest.

Article 54, first paragraph of the Income Tax Law establishes that institutions that make up the financial system that make payments for interest, must withhold and pay the tax applying the rate established by the Congress of the Union for the exercise in question in the Federal Revenue Law, on the amount of capital that gives rise to the payment of interest, as a provisional payment.

Fraction II of said article provides that the withholding referred to in the first paragraph of the same article will not be carried out, regarding interest that is paid between the Bank of Mexico, the institutions that make up the financial system and the specialized investment societies of funds for retirement.

Likewise, the cited fraction states that what is stated in it will not be applicable - that is, the withholding referred to in article 54, first paragraph of the Income Tax Law will be carried out - regarding interest that derives from liabilities that are not at the expense of the institutions that make up the financial system or the specialized investment societies of funds for retirement, as well as when these act on behalf of third parties.

For the above, it is considered that an improper tax practice is carried out:

I.

The institution of the financial system that makes payments for interest and that does not carry out the withholding referred to in article 54, first paragraph of the Income Tax Law, regarding the following circumstances:

a)

Interest that derives from liabilities that are not at the expense of the institutions that make up the financial system or of the specialized investment societies of funds for retirement.

b)

Interest that is paid to the institutions that make up the financial system or to the specialized investment societies of funds for retirement, when these act on behalf of third parties.

II.

Who advises, counsels, provides services or participates in the realization or implementation of any of the above practices.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2010

Published in the DOF on December 3, 2010, Annex 3, published in the DOF on December 7, 2010, with the number of non-binding criterion 21/ISR.

9/ISR/NV

Deincorporation of controlled societies.

Controlling societies that have opted to consider their consolidated fiscal result must determine it in accordance with what is stated in article 68 of the Income Tax Law in force on December 31, 2013, and this necessarily implies that they must determine their consolidated fiscal profit or loss and in case of having consolidated fiscal profit, they can decrease it with the consolidated fiscal losses of previous exercises that they have.

Article 71, second paragraph of the Income Tax Law in force on December 31, 2013, provides that when a controlled society is deincorporated from the consolidation, the controlling society must add to the consolidated fiscal profit or subtract from the consolidated fiscal loss, of the immediate previous exercise, the fiscal losses of previous exercises that the controlled society has the right to decrease individually at the moment of its deincorporation, considering for these effects, only the exercises in which the losses of the society that is deincorporated were subtracted to determine its consolidated fiscal result and consequently, its consolidated fiscal profit or loss for the comment in the previous paragraph.

For the above, it is considered that an improper tax practice is carried out:

I.

When the controlling society does not add or does not subtract, as the case may be, to the consolidated fiscal profit or to the consolidated fiscal loss of the immediate previous exercise, the fiscal losses of the society that is deincorporated incurred in exercises in which it determined consolidated fiscal loss, and, as a consequence thereof, does not pay the income tax or does not decrease the consolidated fiscal losses with the consolidated fiscal losses of the controlled society that is deincorporated.

II.

Who advises, counsels, provides services or participates in the realization or implementation of the above practice.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2007

Published in the DOF on October 26, 2007, Annex 26, published in the DOF on November 2, 2007, with number of non-binding criterion 016/ISR.

10/ISR/NV

Returns of goods delivered in trust, which are only destined to finance education.

Article 90, first paragraph of the Income Tax Law establishes that natural persons resident in Mexico who obtain income in cash, in goods, accrued are obligated to pay the tax established in Title IV of said Law,

when, under the terms of said Title, it indicates, as credit, as services in the cases specified by the Income Tax Law, or of any other type.

The fourth paragraph of the cited article provides that yields from assets delivered in trust are not considered income obtained by taxpayers, provided that such yields are destined exclusively, among other purposes, to finance education up to the bachelor's level for their direct lineal descendants, provided that the studies have official validity recognition.

In this sense, the scenario provided for in the fourth paragraph of Article 90 of the Income Tax Law requires a natural person who has the status of settlor, that is, who has transferred the ownership of assets, money, or both to the trustee to be destined for the purpose referred to in the cited paragraph, entrusting the realization of said purpose to the trustee, and who is an ascendant in the direct line of the natural person who will undergo the financed education.

Therefore, the following is considered an improper tax practice:

I.

The natural person who does not consider as income for which they are obligated to pay Income Tax, the yields from assets delivered in trust, which are destined to finance the education of their direct lineal descendants, when the ownership of said assets has been transferred to the trustee by a person other than the direct lineal ascendant.

II.

Those who advise, counsel, provide services, or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Second Resolution of Modifications to the FMF for 2010

Published in the DOF on December 3, 2010, Annex 3, published in the DOF on December 7, 2010, with non-binding criterion number 18/ISR.

11/ISR/NV

Indemnities for work risks or diseases.

In accordance with Article 93, fraction III of the Income Tax Law, said tax shall not be paid for the obtaining of indemnities for work risks or diseases, which are granted in accordance with the laws, by collective labor contracts, or by Law contracts.

The Federal Labor Law in its articles 473, 474, and 475 states that work risk is considered to be the accidents and diseases to which workers are exposed in the exercise or by reason of work, understanding work accident as any organic lesion or functional disturbance, immediate or subsequent, death or disappearance derived from a delinquent act, produced suddenly in the exercise, or by reason of work, whatever the place and time in which it is performed, including those that occur when the worker travels directly from their home to the workplace and from this to that; likewise, work disease is any pathological state derived from the continued action of a cause that has its origin or motive in the work or in the environment in which the worker is obliged to provide their services.

The indemnities for work risks that are granted for any of the incapacities provided for in fractions I, II, or III of Article 477 of the aforementioned Labor Law, shall be paid directly to the worker, and in the case of mental incapacity, it shall be paid to the person or persons, indicated in Article 501 of the same Law, to whose care the worker remains in accordance with what is specified in Article 483 of the Labor Law, taking as the basis for the calculation of the indemnity the daily salary received by the worker at the time of the risk in accordance with what is provided in Article 484 of the same Law.

In the case of work diseases, these are determined in accordance with the Table of Work Diseases referred to in Article 513 of the Federal Labor Law and those published in the DOF, which shall be of general observance throughout the national territory.

To this effect, it has been detected that taxpayers make payments for the concept of indemnities for work risks or diseases without having the certificate or record of incapacity or disease in question issued by the public institutions of the National Health System, when in reality they are salaries and assimilated to salaries, intending to deduct them improperly without carrying out the corresponding withholding and payment of Income Tax by whoever makes them.

Therefore, the following is considered an improper tax practice:

I.

Making expenditures as if they were indemnities for work risks or diseases without having the corresponding certificate or record, when they actually correspond to income from salaries and concepts assimilated to these or other benefits that derive from a labor relationship.

II.

Deducting for Income Tax purposes, the expenditures referred to in the previous fraction without having the corresponding certificate or record and without complying with the obligation to withhold and pay the corresponding Income Tax.

III.

Not considering as income for which one is obligated to pay Income Tax, the salaries and concepts assimilated to these or other benefits derived from a labor relationship that have been collected as presumed indemnities for work risks or diseases without having the aforementioned certificate or record corresponding.

IV.

Advising, counseling, providing services, or participating in the realization or implementation of any of the aforementioned practices.

Origin

First antecedent

Fourth Resolution of Modifications to the FMF for 2012

Published in the DOF on November 12, 2012, Annex 3, published in the DOF on November 14, 2012, with non-binding criterion number 24/ISR.

12/ISR/NV

Alienation of real estate certificates.

Article 93, fraction XIX, inciso a) of the Income Tax Law states that Income Tax shall not be paid for income obtained from the alienation of the taxpayer's primary residence.

Likewise, Article 9, fractions II and VII of the Value Added Tax Law establishes that the tax shall not be paid in the alienation of constructions adhered to the soil, destined or used for primary residence, as well as social shares, pending collection documents, and credit titles, with the exception of deposit certificates of goods when by the alienation of said goods one is obligated to pay this tax and of non-amortizable real estate participation certificates or other titles that grant their holder rights over real estate other than primary residence or land.

Therefore, the following is considered an improper tax practice:

I.

Considering as alienation of primary residence for Income Tax and VAT purposes, that which is carried out with real estate certificates that represent timeshare memberships, which have exchangeable vacation credits for products and services of recreation, travel, accommodation units, lodging, and other related products, which grant the right to be used during a specific period.

II.

Advising, counseling, providing services, or participating in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Ninth Resolution of Modifications to the FMF for 2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with non-binding criterion number 11/ISR.

13/ISR/NV

Application of the articles of the treaties to avoid double taxation that Mexico has in force, regarding the imposition on branches.

Article 164, fractions II and III of the Income Tax Law establishes a levy on the sending of profits in cash or in goods that permanent establishments of resident legal entities in foreign countries make to the head office of the society or to another permanent establishment of this in foreign countries that do not come from the balance of the net fiscal profit account or from the capital remittances account of the resident in foreign countries, as well as to the reimbursements that permanent establishments make to their head office or to any of their establishments in foreign countries, including those derived from the termination of their activities, in the terms provided by Article 78 of the Income Tax Law.

Therefore, the following is considered an improper tax practice:

I.

The resident in foreign countries who has a permanent establishment in the country, who applies the provisions of any of the articles referred to in the following incisos, in relation to Article 164, fractions II and III of the Income Tax Law, regarding said permanent establishment:

a)

Article 10, paragraph 6 of the Agreement between the Government of the United Mexican States and the Government of the Kingdom of Saudi Arabia to Avoid Double Taxation and Prevent Fiscal Evasion in matters of Income Taxes.

b)

Article 10, paragraph 6 of the Agreement between the United Mexican States and the Argentine Republic to Avoid Double Taxation and Prevent Fiscal Evasion with respect to Income Taxes and on Wealth.

c)

Article 10, paragraph 6 of the Agreement between the Government of the United Mexican States and the Government of Barbados to avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes.

d)

Article 10, paragraph 6 of the Agreement between the Government of the United Mexican States and the Government of Canada to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes.

e)

Article 10, paragraph 6 of the Agreement between the United Mexican States and the Republic of Costa Rica to Avoid Double Taxation and Prevent Fiscal Evasion in matters of Income Taxes.

f)

Article 11-A of the Agreement between the Government of the United Mexican States and the Government of the United States of America to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes.

g)

Article 10, paragraph 6 of the Agreement between the Government of the United Mexican States and the Government of the Republic of the Philippines to Avoid Double Taxation in matters of Income Taxes and Prevent Fiscal Evasion.

h)

Article 10, paragraph 6 of the Agreement between the Government of the United Mexican States and the Government of the Republic of Indonesia to Avoid Double Taxation and Prevent Fiscal Evasion in matters of Income Taxes.

i)

Article 10, paragraph 6 of the Agreement between the United Mexican States and Jamaica to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes.

j)

Article 7, section 8 of the Agreement between the Government of the United Mexican States and the Government of the Republic of Panama to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes.

k)

Article 10, paragraph 6 of the Agreement between the United Mexican States and the Republic of Peru to Avoid Double Taxation and to Prevent Fiscal Evasion in relation to Income Taxes.

II.

Those who advise, counsel, provide services, or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Second Resolution of Modifications to the FMF for 2012

Published in the DOF on June 7, 2012, Annex 3, published in the DOF on June 14, 2012, with non-binding criterion number 23/ISR.

14/ISR/NV

Cooperative societies. Salaries and social security.

The following is considered an improper tax practice:

I.

Whoever, to omit total or partial payment of any contribution or to obtain a benefit to the detriment of the federal treasury, constitutes or contracts directly or indirectly a cooperative society, so that it provides services identical, similar, or analogous to those that its workers or service providers provide or have provided.

II.

The cooperative society that deducts the amounts delivered to its cooperative members, coming from the Social Security Fund, as well as the cooperative member who does not consider said amounts as income for which they are obligated to pay Income Tax.

III.

Whoever advises, counsels, provides services, or participates in the realization or implementation of any of the aforementioned practices.

This criterion is also applicable to partnerships in collective name or in simple commandite.

Origin

First antecedent

Ninth Resolution of Modifications to the FMF for 2006

Published in the DOF on November 30, 2006, Annex 26, published in the DOF on December 7, 2006, with non-binding criterion number 05/ISR.

15/ISR/NV

Improper deduction of losses from the alienation of bare ownership of assets granted in usufruct.

In accordance with Article 980 of the Federal Civil Code, usufruct is the real and temporary right to enjoy another's assets, which is lifelong, unless otherwise agreed, with the exception of that constituted in favor of legal entities that can acquire and administer real estate, which can last up to 20 years.

In the same sense, civil doctrine points out as attributes of property the use and receipt of the fruits of the asset, which can be subject to division and transmitted to third parties where the owner generally reserves bare ownership.

In tax matters, Article 14, fraction I and last paragraph of the Federal Tax Code establishes that alienation of assets is understood as any transfer of ownership, even when the alienator reserves the domain of the alienated asset, considering the acquirer of the assets as the owner.

In this sense, Articles 16 and 90 of the Income Tax Law state that legal entities and natural persons, respectively, resident in the country including the association in participation, will accumulate the total of income in cash, in goods, in services, in credit, or of any other type, that they obtain in the exercise, including those from their establishments in foreign countries.

On the other hand, Article 25, fraction V of the Income Tax Law states that legal entities may make deductions for losses in the alienation of assets other than those that make up the cost of goods sold, while Article 121, last paragraph of the same Law establishes for natural persons that losses in the alienation of real estate may be reduced in the calendar year in which they are generated or in the following 3 years, in accordance with what is stated in Article 122 of said Law.

To this effect, it has been detected that some taxpayers constitute usufruct on real estate assets, where the bare owner alienates the bare ownership, improperly determining a supposed fiscal loss in the alienation of their right, by comparing the alienation price of the bare ownership of the usufructuated asset against the proven acquisition cost of said asset, as if the usufruct had not been constituted.

Therefore, the following is considered an improper tax practice:

I.

Determining fiscal losses in the alienation of bare ownership of real estate assets considering the proven acquisition cost as if they had not been affected by usufruct.

II.

Determining, declaring, registering, and/or deducting for Income Tax purposes a supposed fiscal loss, derived from the practice indicated in the previous fraction.

III.

Advising, counseling, providing services, or participating in the realization or implementation of any of the aforementioned practices.

Origin

First antecedent

Second Resolution of Modifications to the FMF for 2010

Published in the DOF on December 3, 2010, Annex 3, published in the DOF on December 7, 2010, with non-binding criterion number 20/ISR.

16/ISR/NV

Gains obtained by residents in foreign countries in the alienation of real estate shares.

Article 13, paragraphs 1 and 2 of the Agreement between the Government of the United Mexican States and the Government of the United States of America to Avoid Double Taxation and Prevent Fiscal Evasion in matters of Income Tax in force, makes it possible for Mexico to subject capital gains to taxation in various scenarios.

In addition to these scenarios, paragraph 4 of the cited article establishes that gains obtained by a resident of a Contracting State from the alienation of shares, participations, and other rights in the capital of a society, or another legal entity resident of the other Contracting State may be subject to taxation in this other Contracting State when the recipient of the gain has held, directly or indirectly, during a period of twelve months prior to the alienation, a participation of at least 25 percent in the capital of said society or legal entity.

Therefore, the following is an improper tax practice:

I.

Considering that when Mexico cannot subject capital gains to taxation in terms of Article 13, paragraphs 1 and 2 of the aforementioned Agreement, it is also not in a position to tax the capital gains referred to in paragraph 4 of the same article.

II.

Advising, counseling, providing services, or participating in the realization or implementation of the aforementioned practice.

Origin

First antecedent

FMF for 2011

Published in the DOF on July 1, 2011, Annex 3, published in the DOF on July 5, 2011, with non-binding criterion number 22/ISR.

17/ISR/NV

Subcontracting. Withholding of salaries.

The following is considered an improper tax practice:

I.

Whoever constitutes or contracts directly or indirectly a natural or legal person, when among others, it is about Social Solidarity Societies, Cooperatives, Civil, Civil Universal, Civil Particular; Trusts, Unions, Association in Participation or Integrating Companies, so that they provide services identical, similar, or analogous to those that their workers or service providers provide or have provided, and thereby omit the payment of any contribution or obtain an undue benefit to the detriment of the federal treasury.

II.

Derived from the practice indicated in the previous fraction, the withholding of Income Tax on workers or service providers is omitted, on whom, in accordance with what is established by Article 20 of the Federal Labor Law, a labor relationship is maintained by being under their subordination and since said workers or service providers receive a salary for that subordinate work, even if through the intermediary or subcontractor.

III.

Deducts, for Income Tax purposes, the fiscal receipt that supports the provision of services issued by the labor intermediary, without complying with what is established in Article 27, fraction V of the Income Tax Law.

IV.

Accredits, for VAT purposes, the tax contained in the fiscal receipt that supports the provision of services issued by the intermediary, without complying with what is established in Articles 5 and 32 of the Value Added Tax Law.

V.

Advises, counsels, provides services, or participates in the realization or implementation of any of the aforementioned practices.

Origin

First antecedent

Third Resolution of Modifications to the FMF for 2013

Published in the DOF on August 14, 2013, Annex 3, published on the same date as the Modification, with non-binding criterion number 31/ISR.

18/ISR/NV

Simulation of records.

The following is considered an improper tax practice:

I.

Whoever constitutes or contracts directly or indirectly a natural or legal person, when among others it is about Social Solidarity Societies, Cooperatives, Civil, Civil Universal, Civil Particular; Trusts, Unions, Associations in Participation or Integrating Companies, so that they act as withholding agents and make payments of various remunerations to them, for example salaries, assimilated, fees, dividends, and as a result thereof, whether by themselves or through said third party, omit total or partial payment of any contribution or obtain an undue benefit to the detriment of the federal treasury.

II.

Accredits, for Income Tax purposes, a withholding of Income Tax and does not obtain from the withholding agent the documentation where the correct withholding and payment of said Income Tax is recorded.

III.

Advises, counsels, provides services, or participates in the realization or implementation of any of the aforementioned practices.

Origin

First antecedent

Third Resolution of Modifications to the FMF for 2013

Published in the DOF on August 14, 2013, Annex 3, published on the same date as the Modification, with non-binding criterion number 32/ISR.

19/ISR/NV

Deduction of payments to unions.

Articles 27, fraction I and 147, fraction I of the Income Tax Law state that authorized deductions must comply, among other requirements, with being strictly indispensable for the purposes of the taxpayer's activity.

Article 5, fraction I of the Value Added Tax Law states that for VAT to be creditable, among other requirements, the expenditures made by the taxpayer and deductible for Income Tax purposes must be strictly indispensable.

In view of what is established in the previous paragraphs, it is considered that the contributions that taxpayers make to unions to cover their expenses or costs are not deductible concepts for the purposes of the Income Tax Law, in virtue of the fact that they do not correspond to expenditures strictly indispensable for the taxpayers and, therefore, do not meet the requirements for the corresponding VAT to be creditable, since these do not affect the realization of the taxpayers' activities and the consequent obtaining of income, nor do they have any impact on the realization of their activities by not expending them.

Likewise, in accordance with Article 86, second paragraph of the Income Tax Law, workers' unions do not have the obligation to issue or collect fiscal receipts that evidence the alienations and expenditures they make, the services they provide, or the granting of the use or temporary enjoyment of assets, except for those activities that if carried out by another person would be included in Article 16 of the Federal Tax Code, business activities, so that taxpayers do not have the legal possibility to collect the respective fiscal receipt for the contributions they deliver and, therefore, the requirement referred to in Articles 27, fraction III and 147, fraction IV of the Income Tax Law is not complied with.

Therefore, the following is considered an improper tax practice:

I.

Deducting for Income Tax purposes or crediting VAT, the payment made to unions so that they cover their expenses or costs and the transferred VAT.

II.

Advising, counseling, providing services, or participating in the realization or implementation of the aforementioned practice.

It is considered that unions through which the conduct referred to in this criterion is carried out also commit an improper tax practice.

Origin

First antecedent

Second Resolution of Modifications to the FMF for 2014

Published in the DOF on July 4, 2014, Annex 3, published in the DOF on July 17 of

July 2014; RMF 2016 published on December 23, 2015, Annex 3, published on January 12, 2016.

20/ISR/NV

Losses from the alienation of shares. Obligation of controlling societies to pay the income tax that had been deferred due to its reduction in the determination of consolidated fiscal results.

Article 68, fraction I, subsection e) of the Income Tax Law in force from January 1, 2008, to December 31, 2013, allowed controlling societies to reduce losses from the alienation of shares issued by their subsidiaries in the determination of consolidated fiscal results or losses. For these purposes, the amount of losses from the alienation of shares issued by the controlled societies, which had not been considered as placed among the general investing public, obtained by the controlling society, was considered, provided that the requirements set forth in Article 32, fraction XVII, subsections a), b), c), and d) of said Law had been met.

Both in the Statement of Motives of the Initiative for the Decree Reforming, Adding, and Repealing Various Provisions of the Income Tax Law, the Federal Tax Code, and the Special Tax on Production and Services Law, and establishing the Employment Subsidy in force as of January 1, 2008, as well as in the corresponding reports, a specific treatment was established for controlling societies within the fiscal consolidation regime, to reduce only in a consolidated manner the losses from the alienation of shares.

Since the treatment indicated gives rise to a deferral of income tax incurred at the individual level with respect to the tax paid in fiscal consolidation; when the deincorporation or deconsolidation of societies takes place, the effect of deferral must be reversed.

Regarding this, both Article 71 of the Income Tax Law in force until December 31, 2013, and Article Ninth of the Transitional Provisions of the Income Tax Law in force as of January 1, 2014, fractions XV and XVIII, the latter in relation to Article 71-A of the Income Tax Law in force until December 31, 2013, establish the obligation of controlling societies to determine and pay the tax with respect to the losses arising from the alienation of shares in question, when:

I. They had been subtracted for the determination of the consolidated fiscal result or consolidated fiscal loss of the year in which they were obtained, and

II. These could not have been deducted by the society that generated them under the terms of Article 32, fraction XVII of the Income Tax Law.

Precisely for the foregoing, controlling societies, under the terms of Article 72, fraction I, subsection c) of the Income Tax Law in force until 2013, have the obligation to keep a record of their losses and gains from the alienation of shares and the reduction of the former against the gains for the same concept.

Now, in order not to duplicate the fiscal effect of said losses, Article 68 of the cited Law, in its third paragraph, provided that controlling societies could not integrate the aforementioned losses into their individual profit or loss. Therefore, in the record referred to in Article 72, fraction I, subsection c) of the Income Tax Law, the control of the deduction that would correspond to the controlling society had it not consolidated fiscally will be kept.

For the above, an improper tax practice is considered:

I. When any of the circumstances for the payment of deferred income tax occur, controlling societies do not reverse the losses from the alienation of shares reduced in the determination of the result or consolidated fiscal loss of a previous year.

II. Advising, counseling, providing services, or participating in the realization or implementation of the previous practice.

Origin

First antecedent

Seventh Resolution of Modifications to the RMF for 2014

Published in the DOF on December 18, 2014, Annex 3, published in the DOF on December 22, 2014.

21/ISR/NV

Social welfare for the purposes of determining income tax. It cannot be granted in cash or in other equivalent means.

Article 7, fifth paragraph of the Income Tax Law considers as social welfare the expenditures made that have as their object to satisfy present or future contingencies or needs, as well as to grant benefits in favor of workers, aimed at their physical, social, economic, or cultural improvement, which allow them to improve their quality of life and that of their family.

Article 93, fractions VIII and IX of the Income Tax Law, states that said tax will not be paid for the receipt of income by concept of subsidies for incapacity, educational scholarships for workers or their children, childcare, cultural and sports activities, and other social welfare benefits of an analogous nature, which are granted generally, in accordance with the laws or by employment contracts, as well as for expenditures made by the employer by concept of social welfare established in Article 7, fifth paragraph of the referenced Law.

In the jurisprudence thesis 2a./J.39/97, the Second Chamber of the Supreme Court of Justice of the Nation resolved that grocery vouchers must be considered as social welfare expenses, for the purposes of their deduction in income tax. Now, Article 27, fraction XI of the Income Tax Law establishes that, regarding grocery vouchers granted to workers, they will be deductible provided that their delivery is made through the electronic wallets for grocery vouchers authorized for this purpose by the SAT.

For its part, the jurisprudence thesis by contradiction 2a./J.58/2007, issued by the Second Chamber of the Supreme Court of Justice of the Nation confirmed the criterion in the sense that groceries granted to workers in cash do not have the nature of social welfare, since their destination is indefinite, as they will not necessarily be used to acquire the food and other necessary goods that ensure a decent life for the worker and their family.

Therefore, from a harmonious interpretation of the provisions regulating social welfare and of the criteria issued by the Supreme Court of Justice of the Nation, it is reasonable to conclude that the social welfare that employers grant to their workers in accordance with what is established in Article 7, fifth paragraph, in relation to Article 93, fractions VIII and IX, as well as Article 27, fraction XI of the Income Tax Law, cannot be delivered in cash or in other means that are equivalent to cash, and therefore, it cannot be considered as a deductible expense for the employer and an exempt income for the worker, since its destination is not fully identified.

For the above, it is considered that the following carry out an improper tax practice:

I. Taxpayers who, for the purposes of income tax, consider as deductible social welfare expenses or exempt income under the concept of social welfare, the benefits delivered to their workers in cash or in other means that allow said workers to acquire goods, such as, those commercially known as social welfare vouchers or services.

II. Those who make the payments in terms of the previous fraction and do not carry out the withholding and payment of the corresponding income tax for the payments made.

III. Whoever advises, counsels, provides services, or participates in the realization or implementation of any of the previous practices.

Origin

First antecedent

Seventh Resolution of Modifications to the RMF for 2014

Published in the DOF on December 18, 2014, Annex 3, published in the DOF on December 22, 2014.

22/ISR/NV

Investments in automobiles. They are not deductible when they correspond to automobiles granted under loan agreements and that are not used for the performance of the taxpayer's own activities.

Article 25, fraction IV of the Income Tax Law provides as an authorized deduction the investments which, to be deductible, must meet various requirements, among them, being strictly indispensable for the purposes of the taxpayer's activity in accordance with Article 27, fraction I of the same Law.

Article 3 of the Regulations of the Income Tax Law defines the automobile as a land vehicle for the transport of up to ten passengers, including the driver, specifying in its second paragraph that motorcycles, whether with two to four wheels, are not considered included in the previous definition.

For its part, Article 5o., fraction I of the Value Added Tax Law establishes that for the VAT to be creditable, it must meet the requirement that it correspond to goods strictly indispensable for the performance of activities other than importation, for which VAT must be paid or the 0% rate is applied to them.

In this sense, and attending to the elements considered by doctrine, it must be understood as strictly indispensable, the investments that are destined or directly related to the activity of the taxpayer, that is, that are necessary to achieve the purposes of the activity, without which the object of the taxpayer would be obstructed, to such an extent that the realization of its corporate object would be prevented.

Now, it is known that through the figure of the loan agreement - a contract by virtue of which one of the contracting parties obliges itself to grant gratuitously the use of a non-fungible thing, such as an automobile, and the other contracting party obliges itself to return it - taxpayers make expenditures that they intend to deduct by concept of investment for the acquisition of an automobile, maintenance expenses, and payments for the corresponding insurance, despite the fact that it is evident that in this case the good obtained is not destined to the activity of the acquirer; it is not used to achieve the purposes of its activity and this is not obstructed without its acquisition, since its use is transferred to a third party.

For the above, an improper tax practice is considered:

I. Deducting the investment for the acquisition of an automobile, the maintenance expenses, or the payments for the corresponding insurance, when it has been granted under loan agreement to another person and is not used for the performance of the activities proper to the taxpayer for which taxes must be paid; this by virtue of the fact that said expenditures are not deductible for not meeting the requirement of being strictly indispensable.

II. Credit the VAT paid for the concepts of acquisition, maintenance expenses, or payments for the insurance of an automobile, when the same has been granted under loan agreement to another person and is not used by it for the performance of the activities proper to the taxpayer for which taxes must be paid; this by virtue of the fact that the VAT does not correspond to goods or services strictly indispensable.

III. Advising, counseling, providing services, or participating in the realization or implementation of any of the previous practices.

Origin

First antecedent

First Resolution of Modifications to the RMF for 2015

Published in the DOF on March 3, 2015, Annex 3, published in the DOF on March 6, 2015.

23/ISR/NV

Payment methods in medical, dental, psychology, nutrition, or hospital services expenses.

Article 151, fraction I of the Income Tax Law establishes that resident natural persons in the country who obtain income from those indicated in Title IV of the respective Law, may calculate the annual tax by carrying out, in addition to the authorized deductions in each Chapter of the Law corresponding to them, the personal deductions for the payment of expenses for the payment of medical, dental, professional services in psychology and nutrition provided by persons with a professional title legally issued and registered by the competent educational authorities, as well as hospital expenses, made by the taxpayer, for themselves, for their spouse or for the person with whom they live in concubinage and for their ascendants or descendants in a direct line, provided that said persons do not receive during the calendar year income in an amount equal to or greater than that resulting from calculating the general minimum wage of the geographic area of the taxpayer raised to the year, and are made by means of a named check of the taxpayer, electronic fund transfers, from accounts opened in the name of the taxpayer in institutions that make up the financial system and the entities that for such effect authorize the Bank of Mexico or by means of a credit, debit, or service card.

In this understanding, it is necessary that the providers of medical, dental, psychology, nutrition, and hospital services have the necessary technological means to allow their clients to make the payment of the service through electronic fund transfers, from accounts opened in the name of the taxpayer in institutions that make up the financial system and the entities that for such effect authorize the Bank of Mexico or by means of a credit, debit, or service card.

For the above, it is considered that the following carry out an improper tax practice:

I. The providers of medical, dental, psychology, nutrition, or hospital services who do not accept as a payment method the named check of the taxpayer, electronic fund transfers, from accounts opened in the name of the taxpayer in institutions that make up the financial system and the entities that for such effect authorize the Bank of Mexico or by means of a credit, debit, or service card.

II. Whoever advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2015

Published in the DOF on July 2, 2015, Annex 3, published in the DOF on July 10, 2015.

24/ISR/NV

Delivery of donations to educational institutions when they are not onerous nor remunerative.

In accordance with Article 151, first paragraph, fraction III of the Income Tax Law, resident natural persons in the country who obtain income from those indicated in Title IV of the same Law, to calculate their annual tax may deduct non-onerous nor remunerative donations that meet the requirements provided in the Income Tax Law and in the general rules of character that for this effect establishes the SAT and that are granted among others, to the legal entities that meet the requirements established in Article 82 of the same Law.

Likewise, according to the antepenultimate paragraph of fraction III of the cited Article 151, the donations will be deductible provided that the educational institutions are public establishments or of private property that have authorization or recognition of official validity of studies in the terms of the General Education Law, are destined to the acquisition of investment goods, to scientific research or technology development, as well as to administrative expenses up to the amount, in the latter case, that the Regulations of the Income Tax Law indicate; it is about non-onerous nor remunerative donations, in accordance with the general rules that for this effect determine the Ministry of Public Education, and said institutions have not distributed remnants to their partners or members in the last five years.

Similarly, the Regulations of the Income Tax Law in its Article 130 establishes that onerous or remunerative donations are considered, and therefore not deductible, the donations granted to some civil organization or trust that are considered as authorized donees, to have access or participate in events of any kind, as well as those that give the right to receive some good, service, or benefit that they provide or grant. Likewise, the donation of services will not be deductible.

For the above, it is considered that the following carry out an improper tax practice:

I. The persons authorized to receive deductible income tax donations, who use the CFDI of deductible donations to support the payment of the teaching services they provide.

II. Natural persons who deduct in their annual income tax declaration, the remunerative donations they have granted to persons authorized to receive deductible income tax donations.

III. Whoever advises, counsels, provides services, or participates in the realization or implementation of any of the previous practices.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2015

Published in the DOF on July 2, 2015, Annex 3, published in the DOF on July 10, 2015.

25/ISR/NV

Cost of goods sold. Regarding services derived from real estate construction contracts, costs corresponding to income not accumulated in the year are not deductible.

Article 19 of the Income Tax Law in force until December 31, 2013, provided a specific regime of income accumulation, for those providers of services derived from real estate construction contracts, indicating that taxpayers who carry out this activity will consider accumulative the income coming from said contracts, on the date when the estimates for work executed are authorized or approved for their collection, provided that the payment of said estimates takes place within the three months following their approval or authorization.

Article 29, fraction II of the mentioned Law establishes that taxpayers may deduct the cost of goods sold.

Article 45-A, first paragraph of the cited order, refers that in any case, the cost will be deducted in the year in which the income derived from the alienation of the goods in question are accumulated.

Article 45-C of said Law indicates the concepts that taxpayers who carry out activities other than commercial ones must consider to determine the cost of sales, specifying in the last paragraph, that the cost corresponding to the merchandise not alienated in the year must be excluded, as well as that of the production in process.

According to the cited provisions, it is considered that the providers of services derived from real estate construction contracts, who have accumulated their income in accordance with Article 19 mentioned above, could deduct in the year only the cost corresponding to said accumulative income.

This criterion is equally applicable to the situations created under the current Income Tax Law, taking into account that the sense of its provisions is the same, regarding taxpayers who provide services derived from real estate construction contracts, in accordance with what is provided in its articles 17, 25, fraction II, and 39.

For the above, it is considered that an improper tax practice is:

I. Deducting in the year in question, the cost of goods sold that corresponds to the income obtained by the provision of services derived from real estate construction contracts not accumulated in the year.

II. Advising, counseling, providing services, or participating in the realization or implementation of the previous practice.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2016

Published in the DOF on May 6, 2016, Annex 3, published in the DOF on May 9, 2016.

26/ISR/NV

Payment of salaries, wages, or assimilated to these through unions or labor subcontracting service providers.

Article 356 of the Federal Labor Law states that the union is the association of workers or employers, constituted for the study, improvement, and defense of their respective interests.

Article 110, fraction VI, of the same Law, establishes that a discount will be made in the salaries of workers by concept of payment of the ordinary union dues provided in the statutes of the unions.

Article 132, fraction XXII, of the cited Law refers, that employers have the obligation to make the deductions that unions request from the ordinary union dues, provided that it is proven that they are those provided in Article 110, fraction VI, of the same Law.

For its part, Article 79, fraction I, of the Income Tax Law, establishes that worker unions are not taxpayers of income tax, which must be understood that to be located in the cited exemption, in addition to being registered before the Ministry of Labor and Social Welfare in cases of federal competence and, in the Conciliation and Arbitration Boards, in cases of local competence, in terms of Article 365 of the Federal Labor Law, unions must associate workers with the object of studying, improving, and defending their interests.

Likewise, Article 28, fraction XXX, of the Income Tax Law establishes that payments that are at the same time exempt income for the worker will not be deductible up to the amount resulting from applying the factor of 0.53 to the amount of said payments or, in its case, the factor of 0.47 when the benefits granted to workers that are at the same time exempt income for said workers have not decreased with respect to those granted in the immediate previous year.

To this effect, the practice of certain employers has been observed to disperse by means of unions a part of the salary of the workers with whom they have a labor relationship, through presumed union dues, expenses for services or social welfare or supports provided generally in the collective labor contract, with which the withholding of income tax is not carried out or is carried out in an amount less than that which corresponds in accordance with the Law, in addition to making said payments deductible in total or partial, despite the fact that sometimes it is about partially exempt income for the worker.

Therefore, employers or companies providing labor subcontracting services carry out an improper tax practice that pay through unions, totally or partially, to workers salaries, wages, or assimilated to these, through presumed union dues, supports, or expenses of any kind even of social welfare, considering that they are mandatory in accordance with the collective labor contract, and with this procedure they locate themselves in any of the following circumstances:

I. They do not include the concepts indicated in the previous paragraph in the fiscal payment receipt that they must issue to workers, in terms of Article 99, fraction III of the Income Tax Law.

II. They do not carry out the withholding and payment to workers for the purposes of income tax or do so in an amount less than that which legally corresponds to the concepts indicated in the previous paragraph.

III. They deduct the expenditures indicated in the previous paragraph by the amount expressed in the fiscal receipt issued by the union or based

in the collective labor contract.

IV.

Deduct the payments indicated in the previous paragraph made to workers, when they are exempt income for them under Article 28, fraction XXX, of the Income Tax Law.

It is also considered that improper tax practices are carried out by the unions and companies providing labor subcontracting services, through which this conduct is carried out, as well as by anyone who advises, counsels, provides services, or participates in the realization or implementation of the practice referred to in this criterion.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2016

Published in the DOF on May 6, 2016, Annex 3, published in the DOF on May 9, 2016.

27/ISR/NV

Deduction of fixed assets subject to a financial leasing contract.

Article 15 of the Federal Tax Code establishes that for tax purposes, financial leasing is the contract by which a person undertakes to grant another the temporary use or enjoyment of tangible goods for a mandatory term, obligating the latter to settle, in partial payments as consideration, a determined or determinable amount of money that covers the acquisition value of the goods, the financial charges, and other accessories, and to adopt, upon the expiration of the contract, one of the terminal options established by the General Law of Negotiable Instruments and Credit Operations.

Regarding this, Article 17, fraction III of the Income Tax Law establishes that taxpayers who enter into financial leasing contracts may opt to consider as income for the fiscal year the portion of the price that is due in the same.

In relation to the above, Article 40 of the same Law states that those who exercise the option referred to must deduct the cost of goods sold in the proportion that the income received in said fiscal year represents with respect to the total payments agreed upon in the initial mandatory term, instead of deducting the total amount of the cost of goods sold at the time the goods are disposed of.

Therefore, it is evident that the deduction under Article 40 of the Income Tax Law, regarding the assets subject to financial leasing, is mandatory when exercising the option contained in Article 17, fraction III of the same Law, in order to be consistent and proportional with respect to the amount of the partial accumulation that the taxpayer makes based on the due date of the income.

In this sense, it is considered that the following carry out an improper tax practice:

I.

The financial lessor who makes a deduction in the fiscal year under a procedure other than that indicated in Article 40 of the Income Tax Law; when, regarding the relevant contracts, they had exercised the option contained in Article 17, fraction III of the Income Tax Law, consisting of accumulating as income for the fiscal year only the portion of the price that is due in the same.

II.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2017

Published in the DOF on July 18, 2017, Annex 3, published in the DOF on July 21, 2017.

28/ISR/NV

Federative rights of athletes. Their acquisition constitutes an investment in the deferred expense modality.

Article 25, fraction IV, of the Income Tax Law establishes that taxpayers may make various deductions, including those for investments.

Article 31 of the Income Tax Law provides that investments may be deducted by applying in each fiscal year the maximum percentages authorized by the cited Law, on the original amount of the investment; and when the taxpayer disposes of the goods or when they cease to be useful for obtaining income, they will deduct, in the fiscal year in which this occurs, the portion not yet deducted.

Articles 32, fourth paragraph, and 33, fraction III, of the Income Tax Law state that deferred expenses are considered investments, that is, intangible assets represented by goods or rights that allow reducing operating costs, improving the quality or acceptance of a product, using, enjoying, or exploiting a good, for a limited period, and that their maximum deduction percentage is 15% annually.

Sports associations or sports clubs carry out commercial practices where, as part of their activity, they acquire what are commercially known as "federative rights" or "rights cards" through which the right or power of a sports association or club to register an athlete in a specific official competition organized by a federation or sports association is recognized. This operation attends to the fact that sports clubs paid a sum of money so that the association or sports club that has a contract with an athlete, settles the labor relationship with them, and thereby allows the association or sports club that made the expenditure to hire the services of said athlete and consequently also acquire the aforementioned "federative rights" possessed by the association or sports club that ends the labor relationship with the athlete. In conclusion, as a result of the registration act, an "exclusivity right" arises in favor of the sports club that registers an athlete, so that said athlete may only participate officially in any competition, representing the respective sports association or sports club.

From the above, it is understood that the acquisitions made by sports clubs under the scheme specified in the previous paragraph, which aim to obtain ownership of the "federative rights" or "rights cards," are considered investments under the deferred expense modality, since they are intangible assets that allow using, enjoying, or exploiting a good, in this case intangible (the exclusivity right), for a limited period represented by rights, given that the intangibility of the good lies in the "exclusivity right" acquired over the athlete's participation in official competitions.

Therefore, it is considered that the following carry out an improper tax practice:

I.

Sports associations or sports clubs that deduct as an expense the expenditures they pay to other associations or sports clubs to settle the labor relationship with the athlete at the moment they transfer the federative rights to the acquirer thereof, as well as the various ones paid subsequently for said acquisition of "federative rights" or "rights cards."

II.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2017

Published in the DOF on July 18, 2017, Annex 3, published in the DOF on July 21, 2017.

29/ISR/NV

Investment of resources returned to the country in shares issued by resident corporations in Mexico.

The fifth and sixth paragraphs of the Consideration of the "Decree granting various administrative facilities regarding income tax relative to deposits or investments received in Mexico" published in the DOF on January 18, 2017, indicate that the purpose of the income tax payment facility scheme established therein is to return capital held abroad, to be applied in productive activities that contribute to the economic growth of the country, and that this measure is timely and complementary to the investment needs within the country derived from structural reforms, with which additional resources will be available for productive investment, job generation, and strengthening of the country's industrial sector.

Article Six, second paragraph of the cited Decree establishes that resident individuals in national territory and residents abroad with a permanent establishment in Mexico invest resources in the country, among other cases, when the investment is made through institutions comprising the Mexican financial system in financial instruments issued by residents in the country or in shares issued by resident corporations in Mexico.

Rule 11.8.12. of the RMF for 2017, in its fraction II, states that for the purposes of Article Six, second paragraph of the Decree, resident individuals in national territory and residents abroad with a permanent establishment in Mexico invest resources in the country when the investments are made in shares issued by resident corporations in Mexico.

For its part, Rule 11.8.14. of the RMF for 2017 provides that for the purposes of Article Six of the Decree, it is considered that resident corporations in Mexico and residents abroad with a permanent establishment in the country invest resources in national territory when the investment is made in shares issued by resident corporations in Mexico.

Likewise, Article Two, second paragraph of the cited Decree establishes that only income and investments returned to the country during the validity period of the Decree and invested productively in national territory will be included in the benefit, and must remain in the country for a period of at least two years counted from the date they are returned.

From the above, it follows that the purpose of the Decree is that the returned resources remain invested in national territory and that, to comply with the same, taxpayers have the option to invest their capital in the acquisition of shares issued by resident corporations in Mexico.

Therefore, it is considered that the following carry out an improper tax practice:

I.

Individuals and corporations resident in national territory and residents abroad with a permanent establishment in Mexico who opt to pay income tax under the "Decree granting various administrative facilities regarding income tax relative to deposits or investments received in Mexico," published in the DOF on January 18, 2017, and whose resources returned to the country have been invested in shares of corporations resident in Mexico, whether newly created or existing, when the resources received by the corporation, as a consequence of the application of the Decree, are not destined to carry out their investments in the country but are invested abroad by the corporation that received them, and provided that:

a)

The person who opted to pay income tax under the aforementioned Decree and made the investment in shares of the corporations referred to in the first paragraph of this fraction, exercises control over the decisions of said corporations, to such an extent that they can decide directly or indirectly, the time to make a distribution of profits or distribution of income, profits, or dividends, as well as their destination; and

b)

The resources that would have been invested abroad by the corporation that received them as a consequence of the application of the Decree are returned to the country after October 19, 2017.

II.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2017

Published in the DOF on September 21, 2017, Annex 3, published in the DOF on the same date.

30/ISR/NV

Income obtained by residents abroad from leasing or bareboat chartering of vessels or naval artifacts with source of wealth in national territory.

Article 167, first paragraph of the Income Tax Law establishes that regarding royalty income, the source of wealth will be considered to be in national territory when the goods or rights for which royalties are paid are utilized in Mexico or when they are paid by a resident in national territory or by a resident abroad with a permanent establishment in the country.

The penultimate paragraph of the cited article states that persons who must make payments for the referred concept are obligated to make the corresponding withholding.

Article 15-B, first paragraph of the Federal Tax Code states that royalties are considered, among others, payments of any kind for the temporary use or enjoyment of industrial, commercial, or scientific equipment.

In this way, income from the leasing of vessels or naval artifacts on bareboat charter related to exploration or extraction of hydrocarbons referred to in Article 4, fractions XIV and XV of the Hydrocarbons Law, derives from the granting of the temporary use or enjoyment of the equipment referred to in Article 15-B, first paragraph of the Federal Tax Code and has a source of wealth in national territory when said vessels or artifacts are utilized in Mexico. There is also a source of wealth in national territory when the person making the payment for said concept is a resident in national territory or a resident abroad with a permanent establishment in the country.

Regarding this, it has been detected that some taxpayers who make payments to residents abroad without a permanent establishment in national territory for the concept of leasing or bareboat chartering of vessels or naval artifacts, related to exploration or extraction of hydrocarbons referred to in Article 4, fractions XIV and XV of the Hydrocarbons Law, consider that the income derived from said operations is not subject to an income tax withholding, considering that there is no source of wealth in national territory according to the Income Tax Law.

Therefore, it is considered that the following carry out an improper tax practice:

I.

Those who, in accordance with the Income Tax Law, do not make the withholding and payment of the corresponding tax for payments made to residents abroad without a permanent establishment in national territory, for the concept of bareboat leasing or chartering, when the goods subject to these are utilized in national territory, or when the respective payment is made by a resident in national territory or a resident abroad with a permanent establishment in the country.

II.

Residents abroad without a permanent establishment in national territory who, in accordance with the Income Tax Law, consider that the income they obtain for the concept of bareboat leasing or chartering does not have a source of wealth in national territory, when the goods subject to the same are utilized in national territory, or when the respective payment is made by a resident in national territory or a resident abroad with a permanent establishment in the country.

III.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practices.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2017

Published in the DOF on October 10, 2017, Annex 3, published in the DOF on October 12, 2017.

31/ISR/NV

Sports Associations.

Article 43 of the General Law of Physical Culture and Sport establishes that Sports Associations will be registered by the National Commission of Sport (CONADE) when, according to their corporate purpose, they promote, disseminate, practice, or contribute to the development of sport without predominantly economic purposes.

In accordance with the above, Article 79, fraction XXVI of the Income Tax Law states that Sports Associations recognized by CONADE, which are members of the National Sports System, are not considered taxpayers for income tax purposes.

Likewise, Article 80, sixth paragraph of the Income Tax Law states that in the case that corporations subject to tax under Title III, such as Sports Associations, dispose of assets other than their fixed assets or provide services to persons other than their members or partners, they must determine the tax corresponding to the profit from income derived from said activities under Title II of the Income Tax Law, at the rate provided in Article 9 of the same, provided that said income exceeds 5% of the total income of the corporation in the fiscal year in question.

Likewise, Article 86, first paragraph, of the Income Tax Law provides that said corporations have obligations established in other articles of the cited Law.

For its part, Article 3, fraction I, of the Commercial Code states that persons who, having legal capacity to exercise commerce, make it their ordinary occupation are deemed merchants in law; and Article 75 of the same legal instrument lists those considered acts of commerce.

Considering the above and regardless of the fact that the purposes of Sports Associations are not predominantly economic, they must pay income tax under Title II of the Income Tax Law when they dispose of assets other than their fixed assets or provide services to persons other than their members or partners, provided that said income exceeds 5% of the total income of the corporation in the fiscal year in question; likewise, they are obligated to pay income tax for the obtaining of income considered accumulative under other articles of the Income Tax Law.

Regarding this, it has been observed that some Sports Associations carry out acts of commerce on which they do not calculate or pay the tax under Title II of the Income Tax Law, such as sponsorship contracts, temporary use or enjoyment, assignment of rights, among others.

Therefore, it is considered that the following carry out an improper tax practice:

I.

Sports Associations that do not consider as income for which they are obligated to pay income tax, those obtained from carrying out commercial activities and, as a result of the previous practice, do not determine income tax under Title II of the Income Tax Law.

II.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

RMF for 2018

Published in the DOF on December 22, 2017, Annex 3, published in the DOF on December 29, 2017.

32/ISR/NV

Determination of the cost of goods sold for taxpayers carrying out commercial activities consisting of the acquisition and disposal of merchandise.

Article 39, first paragraph of the Income Tax Law establishes that the cost of merchandise sold, as well as that of those comprising the final inventory of the fiscal year, will be determined according to the absorption costing system based on historical or predetermined costs and that, in any case, the cost will be deducted in the fiscal year in which the income derived from the disposal of the goods in question is accumulated.

Regarding this, the second paragraph of the aforementioned article establishes that taxpayers who carry out commercial activities consisting of the acquisition and disposal of merchandise will consider only the following within the cost:

I.

The amount of merchandise acquisitions, reduced by the amount of returns, discounts, and bonuses on the same, made in the fiscal year.

II.

Expenses incurred to acquire and leave the merchandise in conditions to be disposed of.

Additionally, Article 80 of the Regulations of the Income Tax Law specifies that taxpayers who carry out commercial activities consisting of the acquisition and disposal of merchandise, to determine the deductible cost of goods sold, will consider only the items that, according to what is established in the second paragraph of Article 39 of the Income Tax Law, correspond to said activity.

From the above, it is evident that the cost of goods sold is deducted in the fiscal year in which the income derived from the disposal of the goods in question is accumulated; therefore, to determine this concept, taxpayers who carry out commercial activities consisting of the acquisition and disposal of merchandise must consider the items established in the second paragraph of Article 39 of the Income Tax Law mentioned above, as well as the initial and final inventories of the merchandise, because the cost of goods not disposed of in the same fiscal year is not deductible in that fiscal year, as established by the aforementioned article.

In this sense, to determine the cost of goods sold of the fiscal year, it is necessary to add to the amount of merchandise acquired in previous fiscal years that is disposed of in the fiscal year the concepts referred to in Article 39, second paragraph of the Income Tax Law and reduce the amount of merchandise not disposed of in the same fiscal year, in accordance with the fifth paragraph of Article 39 of the aforementioned article.

Not determining the cost of goods sold in the terms indicated above and deducting merchandise in the fiscal year in which they are acquired, whether or not they have been disposed of, would render nugatory the applicable tax provisions on the deduction of the cost of goods sold.

Therefore, it is considered that the following carry out an improper tax practice:

I.

The taxpayer who carries out commercial activities consisting of the acquisition and disposal of merchandise, who, when determining the cost of goods sold of said merchandise, does not consider the amount of the initial and final inventories of the merchandise of each fiscal year.

II.

The taxpayer who carries out commercial activities consisting of the acquisition and disposal of merchandise and deducts partially or totally the cost of those merchandise that have not been disposed of in the fiscal year in question.

III.

Anyone who advises, counsels, provides services, or participates in the realization or implementation of the previous practice.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2018

Published in the DOF on October 19, 2018, Annex 3, published in the DOF on the same October 19, 2018.

33/ISR/NV

Recognition of unique and valuable contributions. They must be recognized in transfer pricing analyses to demonstrate that, in operations carried out with related parties, the accumulative income and authorized deductions were determined considering for those operations the prices, amounts of consideration, or profit margins that would have been used or obtained with or between independent parties in comparable operations.

Articles 76, first paragraph, fractions IX and XII; 76-A, fraction II and last paragraph; 90, penultimate paragraph; 110, fraction XI and 179, first paragraph of the Law

of ISR indicate that for taxpayers who enter into transactions with related parties, they must determine their taxable income and authorized deductions, considering for those transactions the prices, consideration amounts, or profit margins that they would have used or obtained with or among independent parties in comparable transactions.

For these purposes, Article 180 of the Income Tax Law (ISR) establishes the methods that taxpayers must apply, such as: the comparable uncontrolled price method, the resale price method, the cost plus method, the profit split method, the residual profit split method, and the transactional net margin method. The same article states that from the application of any of these methods, a range of prices, consideration amounts, or profit margins may be obtained, when there are two or more comparable transactions.

These ranges will be adjusted through the application of the interquartile method established in the Regulations of the Income Tax Law, the method agreed upon within the framework of an amicable procedure indicated in the treaties to avoid double taxation of which Mexico is a party, or the method authorized in accordance with the general rules issued for this purpose by the SAT.

For its part, the third paragraph of Article 179 of the ISR Law states that transactions or companies are comparable when there are no differences between them that significantly affect the price or amount of the consideration or the profit margin referred to in the methods established in Article 180 of the ISR Law, and when such differences exist, they must be eliminated through reasonable adjustments; and to determine such differences, account will be taken of the functions or activities, including the assets used and risks assumed in the transactions of each of the parties involved in the transaction, among other elements indicated in the fractions of the aforementioned third paragraph of Article 179.

Likewise, in the last paragraph of Article 179, it is established that for the interpretation of the ISR Law for multinational companies, the Guidelines on Transfer Pricing for Multinational Enterprises and Tax Administrations, approved by the Council of the Organisation for Economic Co-operation and Development, will be applicable, insofar as they are consistent with the provisions of said Law and the treaties concluded by Mexico.

In accordance with the provisions and the Guidelines referred to above, in the analysis of functions, activities, assets, and risks, taxpayers who enter into transactions with related parties must identify and consider valuable contributions, which are understood as those conditions or attributes of the business that generate value significantly and imply the expectation of generating greater future economic benefits than would be expected in their absence, such as intangibles created or used, or comparability factors that define some competitive advantage of the business, including activities of development, improvement, maintenance, protection and/or exploitation of intangibles.

In this sense, if the application of the methods mentioned in Article 180 of the ISR Law results in differences in comparability elements between the transaction or the part analyzed and the potential transaction(s) or company(ies) proposed as comparable(s) that are determined from unique and valuable contributions, such differences will significantly affect the price, amount of the consideration, or profit margin referred to in the cited methods, as they stem from unique and valuable contributions; therefore, it would be technically incorrect to consider the aforementioned transactions or companies as comparable.

In view of the foregoing, to give symmetry to the comparison of transactions, taxpayers must consider their unique and valuable contributions, as well as those of the companies with which they are compared.

For the above reason, the following are considered improper tax practices committed by taxpayers:

I.

That taxpayers do not recognize their own unique and valuable contributions and those of the companies with which they are compared, in their analyses for the purpose of demonstrating that in their transactions with related parties, their taxable income and authorized deductions were determined considering for those transactions the prices, consideration amounts, or profit margins that they would have used or obtained with or among independent parties in comparable transactions.

II.

Considering transactions or companies as comparable when there are significant differences between the transaction or the part analyzed and the potential transactions or companies proposed as comparable that are determined or generated from unique and valuable contributions.

III.

Advising, counseling, providing services, or participating in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2018

Published in the DOF on November 30, 2018, Annex 3, published in the DOF on the same November 30, 2018.

34/ISR/NV

Modifications to the value of transactions with related parties within the interquartile range.

In Article 180, fractions I to VI of the ISR Law, the methods that taxpayers who enter into transactions with related parties must apply to determine their taxable income and authorized deductions are established, considering for those transactions the prices, consideration amounts, or profit margins that they would have used or obtained with or among independent parties in comparable transactions. In the second paragraph of said article, it is indicated that from the application of any of the methods, a range of prices, consideration amounts, or profit margins may be obtained, when there are two or more comparable transactions, which will be adjusted through the application of the interquartile method established in the Regulations of the ISR Law, the method agreed upon within the framework of an amicable procedure indicated in the treaties to avoid double taxation of which Mexico is a party, or the method authorized in accordance with the general rules issued for this purpose by the SAT, and if the taxpayer's price, consideration amount, or profit margin is within these ranges, such prices, amounts, or margins will be considered as agreed upon or used between independent parties, but if the taxpayer is outside the adjusted range, the price or consideration amount that independent parties would have used will be considered the median of said range (transfer pricing adjustment).

For its part, Article 302, second paragraph of the Regulations of the ISR Law states that if the taxpayer's prices, consideration amounts, or profit margins are between the lower and upper limits referred to in the interquartile method, they will be considered as agreed upon or used between independent parties.

In accordance with the above, it follows that when there are two or more comparable transactions, a transfer pricing adjustment is only appropriate to modify the prices, consideration amounts, or profit margins in transactions carried out by the taxpayer with its related parties, when such prices, consideration amounts, or profit margins are outside the range adjusted through the application of the corresponding interquartile method for comparable transactions, making the adjustment to the median of said range; therefore, it is not appropriate to modify such prices, consideration amounts, or profit margins when they are already within the range adjusted with the corresponding interquartile method for comparable transactions, since such modification does not aim to comply with the applicable tax provisions, but rather to obtain an improper tax benefit by increasing deductions or decreasing the income of the taxpayer resident in national territory.

From the above, it follows that there is no legal basis to carry out any additional modification to the prices, consideration amounts, or profit margins that generates an improper tax benefit when they are within the range adjusted obtained with the interquartile method, that is, within the lower and upper limits referred to in the aforementioned method.

On the other hand, the transfer pricing adjustment referred to in rule 3.9.1.1. is only applicable when the prices, consideration amounts, or profit margins already adjusted through the application of the interquartile method are outside the range referred to in Article 180, second paragraph of the ISR Law, or, which is the same, outside the lower and upper limits referred to in the interquartile method, established in Article 180 of the ISR Law, in relation to Article 302 of its Regulations.

The transfer pricing adjustment is also considered appropriate when it is recognized by the tax authorities as the result of a consultation regarding the methodology used in the determination of prices or consideration amounts in transactions with related parties in accordance with Article 34-A of the CFF or of agreements between competent authorities under the framework of applicable international treaties, that is, in terms of particular resolutions.

For the above reason, the following is considered an improper tax practice for taxpayers:

I.

Making any modification to the prices, consideration amounts, or profit margins corresponding to the transactions carried out by the taxpayer with related parties, when these are already within the range adjusted with the corresponding interquartile method for comparable transactions, that is, when they are between the lower and upper limits of the referred range, since such modification does not aim to comply with the applicable tax provisions, but rather to obtain an improper tax benefit by increasing deductions or decreasing the income of the taxpayer.

II.

Advising, counseling, providing services, or participating in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2018

Published in the DOF on November 30, 2018, Annex 3, published in the DOF on the same November 30, 2018.

35/ISR/NV

Accommodation services through technology platforms. They are subject to the payment of ISR.

The ISR Law in its Articles 16 and 90 states that individuals and legal entities resident in Mexico are obligated to pay ISR on the income they obtain in cash, in goods, accrued, in credit, in services, or of any other type.

Likewise, Article 100, first and second paragraphs of the ISR Law, establishes that individuals resident in the country or abroad with a permanent establishment in the country who receive income derived from the performance of business activities are obligated to pay ISR. Fraction I of said article states that income from business activities is considered to be those derived from the performance of commercial activities.

In relation to the above, Article 16, fraction I of the CFF states that business activities are understood to include, among others, commercial activities that have that character in accordance with federal laws.

It has been observed that there are technology platforms that allow linking the so-called hosts (owners of properties or their representatives) with guests (platform users, i.e., customers) for the purpose that hosts provide services, mainly accommodation in the country.

Regarding this, it is considered that the services that hosts offer through these platforms are accommodation services, and therefore business, for the following reasons:

I.

In accordance with Article 2666 of the Federal Civil Code, the accommodation contract occurs when one party provides shelter to another for an agreed remuneration, committing or not to additionally provide other complementary services (food and other expenses arising from the accommodation).

II.

The accommodation contract can be tacit, as stipulated in Article 2667 of the Federal Civil Code, although hosts may request that guests sign a contract.

III.

In the case of technology platforms, the accommodation service is contracted for specific days, the rate is paid per day, and no minimum term is established for the service to be provided.

It has been detected that some taxpayers who provide accommodation services through technology platforms do not make the payment of ISR corresponding to the income they receive in accordance with the aforementioned paragraphs, even though in accordance with Articles 16, 90, 100, 106, and 109 of the ISR Law, they have the obligation to do so.

For the above reason, it is considered that they commit an improper tax practice:

I.

Those taxpayers who do not accumulate for ISR purposes the income received from business activities consisting of the provision of accommodation services when using technology platforms and do not make the payment of the corresponding tax.

II.

Whoever advises, counsels, provides services, or participates in the realization or implementation of the aforementioned practice.

Origin

First antecedent

First Resolution of Modifications to the RMF for 2019

Published in the DOF on August 20, 2019, Annex 3, published on August 21, 2019.

36/ISR/NV

Payment of tax on dividends distributed in recognized foreign markets.

Article Nine, fraction XXX of the Transitional Provisions of the ISR Law for 2014, provides that the additional tax established in Articles 140, second paragraph, and 164, fractions I and IV of the ISR Law is applicable to profits generated from the 2014 fiscal year; and for such effect, the legal entity or permanent establishment that carries out the corresponding distribution will be obligated to maintain the net fiscal profit account with the profits generated until December 31, 2013, and start another net fiscal profit account with the profits generated from January 1, 2014, in accordance with Article 77 of the ISR Law. It is also established that when obligors do not keep the two referred accounts separately or when they do not identify the mentioned profits, it will be understood that they were generated from the year 2014, and therefore are subject to the additional tax.

Article 140, second paragraph of the ISR Law establishes that individuals resident in Mexico will be subject to an additional rate of 10% on dividends or profits distributed by legal entities resident in Mexico, who will be obligated to withhold the tax when distributing such dividends or profits and pay it together with the provisional payment of the corresponding period.

Article 164, fraction I, fifth paragraph of the ISR Law establishes that legal entities resident in Mexico that distribute dividends or profits to individuals or legal entities resident abroad must withhold the tax obtained by applying the 10% rate on such dividends or profits and provide to the persons to whom they make the payments, a receipt indicating the amount of the dividend or profit distributed and the tax withheld, and must pay the tax together with the provisional payment of the corresponding month.

Article 29, first paragraph of the CFF states that persons to whom contributions have been withheld must request the respective CFDI; while, in accordance with Article 76, fraction XI, subsection b) of the ISR Law, legal entities resident in Mexico have the obligation to provide to individuals or legal entities when paying the dividend or profit, a fiscal receipt indicating the amount paid, the ISR withheld in terms of Articles 140 and 164 of the ISR Law, as well as whether the payments come from the accounts established in Articles 77 and 85 of the ISR Law, respectively, or if they are dividends or profits referred to in Article 10, first paragraph of the same.

In this sense, attending to the aforementioned provisions, legal entities resident in Mexico, even those whose shares trade on recognized foreign markets in terms of Article 16-C, fraction II of the CFF, are obligated to withhold and pay the tax obtained by applying the 10% rate on distributed dividends or profits; and to issue and provide the fiscal receipt referred to in Articles 140, second paragraph, and 164, fraction I, fifth paragraph of the ISR Law.

Notwithstanding the above, it has been detected that some taxpayers who make payments for dividends whose shares trade on recognized foreign markets do not make the withholding and payment of the corresponding tax nor the issuance of the fiscal receipt. For the above reason, it is considered that they commit an improper tax practice:

I.

Legal entities that distribute dividends and omit the withholding, payment of the tax, and issuance of the fiscal receipt referred to in Articles 140, second paragraph, and 164, fraction I, fifth paragraph of the ISR Law, when the dividends come from shares that trade on recognized foreign markets and disregard the status or legal and tax character of the shareholders.

II.

Whoever advises, counsels, provides services, or participates in the realization or implementation of any of the aforementioned practices.

Origin

First antecedent

First Resolution of Modifications to the RMF for 2019

Published in the DOF on August 20, 2019, Annex 3, published on August 21, 2019.

37/ISR/NV

Fiscal result distributed to holders of certificates of a trust dedicated to the acquisition or construction of real estate. The deduction referred to in Article 115, second paragraph of the ISR Law is not applicable to them.

Article 188, fraction V, first paragraph of the ISR Law establishes that holders of participation certificates who are resident in Mexico or resident abroad with a permanent establishment in the country will accumulate the fiscal result distributed to them by the trustee or financial intermediary coming from the assets, rights, credits, or values that make up the patrimony of the issuer trust of said certificates, without deducting the withheld tax, and the gains they obtain from the alienation of said certificates, unless they are exempt from paying tax on such gains, and they may credit the tax withheld from them for said result and gains, against the ISR they incur in the fiscal year in which they are distributed or obtained.

The second paragraph of the referred fraction states that individuals resident in Mexico will consider the distributed fiscal result as income referred to in Article 114, fraction II of that Law.

Article 114, fraction II of the ISR Law indicates that income from granting the use or temporary enjoyment of real estate includes the yields of non-amortizable real estate participation certificates; on the other hand, fraction I of said article considers those derived from leasing or subleasing and in general from granting for a valuable consideration the use or temporary enjoyment of real estate in any other form.

For its part, Article 115, second paragraph of the ISR Law expressly establishes that taxpayers who grant the use or temporary enjoyment of real estate may opt to deduct 35% of the income referred to in Chapter III of Title IV of the ISR Law, in substitution of the deductions referred to in said article.

From the harmonious and systematic interpretation of the analyzed provisions, it is considered that the fiscal result distributed, referred to in Article 188, fraction V of the ISR Law, is not subject to the deduction established in Article 115, second paragraph of the same legislation, since applying such deduction would constitute an improper double benefit, in virtue of the fact that such result was determined by the trustee in terms of Title II of the ISR Law, that is, this already decreased the authorized deductions by the referred Law.

To this effect, it has been detected that some of the holders of participation certificates issued by a trust dedicated to the acquisition or construction of real estate, apply the deduction established in Article 115, second paragraph of the ISR Law to the fiscal result distributed to them by the trustee or financial intermediary.

For the above reason, it is considered that they commit an improper tax practice:

I.

Holders of participation certificates who apply what is stated in Article 115, second paragraph of the ISR Law regarding the fiscal result distributed referred to in Article 188, fraction V of the ISR Law.

II.

Whoever advises, counsels, provides services, or participates in the realization or implementation of the aforementioned practice.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29, 2019, Annex 3, published on January 9, 2020.

38/ISR/NV

Payment of deferred ISR by the settlors of a trust dedicated to the acquisition or construction of real estate. The donation of the participation certificates obtained by the contribution of real estate assets updates the disposal scenario.

Article 188, fraction XI of the ISR Law establishes that persons acting as settlors who contribute real estate assets to the trust referred to in Article 187 of said Law and receive participation certificates for the total or partial value of said assets, may defer the payment of ISR incurred by the gain obtained from the alienation of those assets, until the moment they alienate each of said certificates.

In terms of Article 14, fraction I of the CFF, alienation of assets is understood as any transfer of ownership, even in that in which the alienator reserves ownership of the alienated asset. In this sense, donation constitutes the alienation of assets as it is a contract by which a person transfers ownership to another.

In such considerations, if the settlor makes the donation of the

certificates of participation that he received for the total or partial value of the real estate assets contributed to the trust, upon alienating said certificates in accordance with Article 14, fraction I of the Federal Tax Code (CFF), must make the payment of the Income Tax (ISR) that up to that moment was deferred and that was incurred since the contribution of the real estate assets to the trust in accordance with what is provided in Article 188, fraction XI of the Income Tax Law (Ley del ISR).

To this effect, it has been detected that some taxpayers carry out the donation of the participation certificates that they received for the total or partial value of the assets contributed to the trust, without making the payment of the deferred ISR in accordance with Article 188, fraction XI of the Income Tax Law, considering that the donation does not imply the alienation of the certificates, or rather, because the donation is considered exempt when so established by the Income Tax Law.

For the above reason, it is considered that an improper tax practice is carried out:

I.

The settlor who does not make the payment of the deferred ISR derived from the contribution of the real estate to the trust in the terms of Article 188, fraction XI of the Income Tax Law, when donating their participation certificates.

II.

Whoever advises, counsels, provides services or participates in the realization or the implementation of the previous practice.

Origin

First antecedent

Fiscal Miscellaneous Resolution (RMF) for 2020

Published in the Official Gazette of the Federation (DOF) on December 29, 2019, Annex 3, published on January 9, 2020.

39/ISR/NV

Authorized Donee. Modification of the bylaws or the trust contract.

Article 82, fraction I of the Income Tax Law provides that, to be considered as institutions authorized to receive deductible donations, non-profit legal entities must carry out exclusively the activity that was authorized to receive deductible donations.

For its part, the same Article 82, in its fraction IV, states that non-profit legal entities must dedicate their assets exclusively to the purposes proper to their social object, for which they have been authorized to receive deductible ISR donations, not being able to grant benefits on the distributable remainder to any natural person nor to any of its members, natural or legal persons, unless it is, in the latter case, some of the legal entities or trusts authorized to receive deductible tax donations or it is the remuneration of services effectively received.

Likewise, in its fraction V, the cited article determines that non-profit legal entities at the time of their liquidation or change of residence for tax purposes, must dedicate the entirety of their assets to other entities authorized to receive deductible donations, which will also be applicable in the cases of revocation, loss of validity or cancellation of the authorization, provided that it has not been obtained again or renewed, within the twelve months following the date on which such events occur.

Furthermore, the second paragraph of the aforementioned Article 82, establishes that the requirements established in its fractions IV and V must be expressly recorded with irrevocable character in the bylaws or trust contract respectively of the legal entities authorized to receive deductible donations.

In this vein, in accordance with Article 28 of the Federal Civil Code, applicable supplementarily in accordance with Article 5 of the CFF, legal entities are governed by the corresponding laws, by their constitutive deed and by their bylaws.

For the above reason, it is considered that an improper tax practice is carried out when civil organizations or trusts that have authorization to receive deductible donations:

I.

Modify their bylaws or the trust contract, in order to contemplate activities not related to their authorized social object or activities that pursue economic ends, which contradict the applicable tax provisions.

II.

Modify their bylaws or the trust contract, in order to include acts that imply the transfer of their assets to natural persons or to entities not authorized to receive deductible donations, or well, to obtain financing of resources for activities different from those indicated in fraction I of Article 82 of the Income Tax Law.

III.

Do not update their asset and liquidation clauses in accordance with what is established in the reform to the Income Tax Law, in force from January 1, 2021.

IV.

Reform their bylaws in order to transform into a legal entity with a commercial legal nature.

V.

Advise, counsel, provide services or participate in the realization or implementation of the previous practices.

Origin

First antecedent

Fiscal Miscellaneous Resolution (RMF) for 2020

Published in the Official Gazette of the Federation (DOF) on December 29, 2019, Annex 3, published on January 9, 2020.

40/ISR/NV

For the purposes of Article 3-B of the Federal Fiscal Coordination Law (LCF). Participable ISR is understood as that which is paid in cash, check or transfer.

Article 3-B of the LCF establishes that entities adhered to the National Fiscal Coordination System will participate in 100% of the collection that is obtained from the ISR that is effectively paid to the Federation, corresponding to the salary of the personnel who provide or perform a personal subordinate service in the dependencies of the federal entity, of the municipality or territorial demarcation of the Federal District, as well as in their respective autonomous bodies and parastatal and paramunicipal entities, provided that the salary is effectively paid by the mentioned entities charged to their participations or other local income.

In virtue of what is exposed, the interpretation of the invoked legal provision; allows to conclude that, although it is true that the federal entities have the right to have the ISR withheld from their workers participated, for the payment of their salaries, it is also true that this is conditioned to the fact that said tax is effectively paid by the mentioned entities charged to their participations or other local income, understanding as effectively paid, when the obligation is extinguished through cash, check or transfer.

It is known that some municipalities carry out the payment of the ISR withholdings of their workers, to the Federation; by means of compensations of balances in favor; failing to comply with Article 3-B of the LCF, which establishes that it be effectively paid charged to their participations or other local income.

For the above reason, it is considered that they carry out an improper tax practice:

I.

When the states and municipalities, to obtain the benefits of Article 3-B of the LCF, comply with the obligation to pay the ISR withheld from their workers in a manner different from payment in cash, check or transfer.

II.

Whoever advises, counsels, provides services or participates in the realization or in the implementation of the previous practice.

Origin

First antecedent

Fiscal Miscellaneous Resolution (RMF) for 2020

Published in the Official Gazette of the Federation (DOF) on December 29, 2019, Annex 3, published on January 9, 2020.

41/ISR/NV

Deteriorated merchandise or that lost value. The amount of the merchandise that is deducted from the taxpayer's inventories does not constitute a deductible donation.

Article 25, first paragraph, fraction II of the Income Tax Law, establishes as a deduction the cost of goods sold, as that item that can be subtracted from the accumulative income, with the purpose that the taxable base is determined.

However, Article 27, fraction XX, first paragraph, of the Income Tax Law, indicates that regarding those merchandise, raw materials, semi-finished or finished products that have suffered deterioration for causes not imputable to the taxpayer, they may be deducted from the inventories in the exercise in which the factual situation is updated, provided that regarding basic goods for human subsistence in matters of food, clothing, housing or health, before proceeding to their destruction, they are offered in donation to the institutions authorized to receive deductible donations in accordance with this Law, dedicated to the attention of basic subsistence requirements in matters of food, clothing, housing or health of persons, sectors, communities or regions, of scarce resources, complying with the requirements that for such effects establishes the Regulation of the Income Tax Law.

Likewise, Article 27, fraction I of the Income Tax Law, considers as an authorized deduction the donations that are granted, among others, to the legal entities authorized to receive deductible donations of said tax, in an amount that does not exceed 7% of the fiscal profit obtained by the taxpayer in the exercise immediately prior to that in which the donation is made.

Now well, Article 29-A, fraction V, subsection b) of the CFF provides that when the digital fiscal receipts, back the donation of goods that have been previously deducted for the purposes of ISR, must expressly indicate that the donation is not deductible.

In that sense, it cannot be understood that Article 27, fraction XX of the Income Tax Law, establishes the possibility of carrying out a double deduction, that is, that it can deduct from its inventories the deteriorated merchandise or that have lost their value and additionally can deduct the donation of these to the institutions authorized to receive deductible donations, dedicated to the attention of basic subsistence requirements in matters of food, clothing, housing or health of persons, sectors, communities or regions, of scarce resources.

For the above reason, it is considered that an improper tax practice is carried out when:

I.

Taxpayers deduct the donations of the deteriorated merchandise or that have lost their value that they delivered to the institutions authorized to receive deductible donations, and that were deducted from their inventories in terms of Article 27, fraction XX of the Income Tax Law.

II.

Whoever advises, counsels, provides services or participates in the realization or the implementation of any of the previous practices.

42/ISR/NV

Amounts granted to workers charged to pension plans. They do not have the treatment of exempt income for the worker, nor are the contributions to said plans a deduction for the employer, when they constitute amounts that are part of the salary subject to the payment of ISR.

Article 90, first paragraph of the Income Tax Law, establishes that natural persons resident in Mexico are obliged to pay the ISR for the income that they obtain in cash, in goods, accrued, in credit, in services or of any other type. Additionally, Article 94, first paragraph of said Law, indicates that income from the provision of a personal subordinate service are considered, the salaries and other benefits that derive from a labor relationship, including the participation of the workers in the profits of the companies and the benefits perceived as a consequence of the termination of the labor relationship.

Likewise, Article 93, first paragraph, fractions IV and V of the Income Tax Law, provides that ISR will not be paid for the obtaining of income by retirements, pensions, retirement benefits, as well as life annuities or other forms of retirement, coming from the sub-account of the retirement insurance or from the sub-account of retirement, disability in advanced age and old age, provided in the Social Security Law (LSS) and those coming from the individual account of the savings system for retirement, provided in the ISSSTE Law, in the cases of disability, incapacity, disability, old age, retirement or death, with the limitation that indicates the cited fraction IV, for the excess the respective tax will be paid and that, to apply said exemption, the total of the pensions paid to the worker must be considered, regardless of who pays them.

For its part, from Articles 54 of the ISSSTE Law and 190 of the LSS, it is derived that the worker can acquire the right to enjoy a pension coming from some plan established by his employer or derived from collective hiring, that has been authorized and registered by the CONSAR.

With respect to the above, Articles 87 of the ISSSTE Law and 157 of the LSS, establish that to be able to enjoy a pension for disability in advanced age, it is necessary that the insured meet the requirements established in said laws, among others, that the insured is deprived of remunerated work from the age of sixty.

Under this context, it has been detected that some taxpayers hire companies, firms or advisors that administer pension or retirement funds, that do not comply with the legal schemes, in order to grant economic benefits to active workers, who maintain a labor relationship with the employer that makes the contributions to the fund, which are given as a title of pension, with various concepts such as social welfare plan, multiple benefits plan, subsistence or survival plan, amounts for social purposes, etc.; however, it has been detected that said procedure contains elements that are not in accordance with the nature of pension income, such as: minimum retirement age of 18 years or minimum retirement seniority less than five years; frequency of weekly, decennial, bi-weekly or fortnightly payment, among other elements.

For the above reason, it is evident that the tax treatment of exemption to income by concept of pensions, applies only with respect to those resources that are delivered to the workers who meet the requirements to obtain a pension in accordance with the provisions in matters of social security; therefore, when said income is obtained derived from a labor relationship, that is delivered to active workers, permanently and ordinarily, it is unquestionable that they configure accumulative income for the worker in terms of Chapter I of Title IV of the Income Tax Law.

On the other hand, in accordance with Article 7, fifth paragraph of the Income Tax Law, social provision is considered, the expenditures made that have as object to satisfy contingencies or present or future needs, as well as granting benefits in favor of the workers, tending to their physical, social, economic or cultural improvement, which allows them the improvement in their quality of life and in that of their family; likewise, Article 93, first paragraph, fractions VIII and IX of the same Law, establishes as exempt income the obtained by concept of social provision. With respect to the above, the referred Article 93, penultimate and last paragraphs, considers as social provision, among other concepts, the pensions that are granted in accordance with the laws, and always that the requirements established in Article 27, fractions XI and XXI of the cited order are met.

In that sense, it has also been detected that some taxpayers who hire said pension schemes, use the figure of social provision to make payments to active workers by concept of supposed pensions derived from private plans, however, it is not about pensions that have been granted in accordance with the provisions in matters of social security, for which they do not fit in the figure of social provision provided in Article 93, penultimate and last paragraphs of the cited Law.

For the above reason, the tax treatment of exemption to income by concept of social provision, considering them as pensions, applies only to those that are granted in accordance with the provisions in matters of social security, that is, those that come from pension plans that comply with all the requirements that marks the legislation that provides for them and that also meet the requirements established in Article 27, fractions XI and XXI of the Income Tax Law; therefore, when the income that workers receive do not comply with the above, they cannot be considered as exempt income for the worker, but rather, they are really income obtained derived from a labor relationship, that are delivered to active workers permanently and ordinarily, for which, it is unquestionable that they configure accumulative income for the worker in terms of Chapter I of Title IV of the Income Tax Law.

Now well, with respect to the deductions of moral employer persons, Article 25, first paragraph, fraction X of the Income Tax Law, provides as a deduction, the contributions made for the creation or increase of reserves for pension or retirement funds of the personnel, complementary to those that establishes the LSS, with the limitation that indicates said fraction.

Likewise, in accordance with Article 27, fraction XI, in relation with Article 7, fifth paragraph of the Income Tax Law, for the deduction of social provision expenses by concept of pensions to proceed, it must be about expenses that comply with the legal definition of social provision, which as already explained, does not happen in the analyzed case.

In that context, it has been detected that the contractors of the pension schemes, make contributions to create or increase those funds, carrying out the deduction of said expenditures for ISR purposes and, in their case, carrying out the crediting of the VAT that is transferred to them by said fund administration companies for the services rendered; however, the pension plans corresponding to said funds have not been granted in accordance with the provisions in matters of social security.

Consequently, it is evident that the deduction of contributions made for the creation or increase of reserves for pension or retirement funds of the personnel, or well, the deduction of social provision expenses, applies only to the pensions that are granted in accordance with the laws of the matter, and that also meet the requirements established in fractions XI and XXI of Article 27 of the Income Tax Law, or well, to those concepts that do configure the definition of social provision, respectively; therefore, if said expenditures do not comply with the requirements previously mentioned, they will not qualify as authorized deductions and, secondarily, in their case, the VAT that has been transferred to them by the fund administration companies for the services to constitute them, cannot be considered as creditable.

For the above reason, it is considered that they carry out an improper tax practice:

I.

Those who deliver amounts to active workers, simulating that it is about payments by concept of retirements, pensions, retirement benefits, as well as life annuities or other forms of retirement, regardless of the name with which they are designated, that are associated with a remuneration scheme throughout their working life, in order not to consider them as part of the worker's salary and give them the treatment of exempt income for the payment of ISR.

II.

Those who have the obligation to make the withholding and the payment of the corresponding ISR for the amounts that they deliver in the terms of the previous fraction and do not do so.

III.

Those who carry out the deduction of payments made by concept of contributions for the creation or increase of reserves for pension or retirement funds of the personnel, in terms of fraction I of this criterion.

IV.

Those who carry out the deduction of expenditures to determine the ISR and the crediting of the VAT, that corresponds to the service paid by the hiring of the scheme to societies, firms or advisors, through which the practices referred to in fraction I of this criterion are implemented.

V.

Those who receive payments in terms of fraction I of this criterion and do not pay the corresponding ISR on said income.

VI.

Whoever advises, counsels, provides services or participates in the realization or the implementation of any of the previous practices.

43/ISR/NV

Amounts delivered to workers, partners or shareholders by concept of labor incentives, bonuses, commissions or complementary compensations for invention, premiums or any other similar concept, paid through third parties. They do not have the treatment of exempt income, nor are the amounts paid to the third parties deductible, nor is the VAT that is transferred by said payments creditable.

Article 1o., fraction I of the Income Tax Law, states that natural and moral persons resident in the country are obliged to pay the ISR, with respect to all their income, regardless of the location of the source of wealth from which they proceed.

Article 90 of the cited Law, provides that those obliged to pay the tax established in Title IV of said Law, are natural persons resident in Mexico who obtain income in cash, in goods, accrued when in the terms of the referred Title it is indicated, in credit, in services in the cases that the Income Tax Law indicates, or of any other type.

For its part, Article 94, first paragraph of the Income Tax Law, states that income from the provision of a personal subordinate service are considered, the salaries and other benefits that derive from a labor relationship, including the participation of the workers in the profits of the companies and the benefits perceived as a consequence of the termination of the labor relationship, likewise, it specifies various concepts that are assimilated to said income.

Regarding this, Article 96, first paragraph of the mentioned Law, indicates that those who make payments for the concepts referred to in Title IV, Chapter I of the Income Tax Law, are obliged to carry out monthly withholdings and payments that will have the character of provisional payments on account of the annual tax.

On the other hand, Article 93 of the aforementioned Law, establishes that ISR will not be paid for the obtaining of the income indicated in said article, that is, in a restrictive manner, only the income that said numeral indicates, will not be subject to the payment of ISR.

Article 140 of the Income Tax Law, provides that natural persons must accumulate to their other income, those received by dividends or profits. Regarding this, Article 10, first paragraph of the referred Law, establishes that, moral persons that distribute dividends, must calculate and pay the ISR that corresponds to them, while the third paragraph of said article, states that one will not be obliged to pay the ISR when the dividends come from the net fiscal profit account.

Article 25 of the Income Tax Law, establishes the deductions that taxpayers moral persons can make and Article 27 of the cited Law, indicates the requirements that authorized deductions must meet, specifying in its fraction I, that these must be strictly indispensable for the purposes of the taxpayer's activity.

Under that context, it has been detected that some taxpayer moral persons, use civil associations or some other form of society or

association, to make payments to its workers, or to

its partners or shareholders, under concepts such as labor incentives,

bonuses, commissions, complementary compensation for invention, other

labor compensation, premiums or any other similar concept, in accordance with articles 153-J, fraction IX and 163, fraction II of the Federal Labor Law, without making the withholding and payment to which the persons making such payments are obligated (even through third parties contracted for this purpose), in accordance with articles 10 and 96 of the Income Tax Law.

Under such a scheme, the workers, partners or shareholders of the contracting company receive economic resources and a CFDI for concepts such as labor compensation in accordance with the Federal Labor Law, complementary compensation or another similar name, without the contracting legal entity considering these resources for its workers, or its partners or shareholders, as income from salaries or wages, income assimilated to salaries, or payment of dividends, as applicable. Consequently, they do not consider them subject to the payment of income tax, which is incorrect, since although the aforementioned concepts may be granted by the employer for the benefit of its workers or partners or shareholders, in accordance with labor laws, the fact is that only the Income Tax Law recognizes those incomes for which there is no obligation to pay the tax, in terms of article 93 of said Law.

In effect, in tax matters, the legal or factual situation provided for in the Income Tax Law to configure the obligation to pay said tax, in accordance with Title IV of the aforementioned Law, is broad, since article 94, first paragraph of the Income Tax Law, by providing: "... and other benefits derived from a labor relationship ...", covered any concept, regardless of whether such resources correspond to any other figure or derive from any other obligation provided for in a law of another matter, such as labor matters, since where the law does not distinguish, it is not possible to distinguish, which is why, although the economic resources delivered to natural persons, even through associations or companies, might correspond to training and skill development programs with the objective of increasing productivity, or to a complementary indemnification for an invention, this does not mean that they should be considered as exempt income for natural persons, since the incomes for which there will be no obligation to pay income tax are stated restrictively in article 93 of the aforementioned Law.

In this vein, the payment made by an employer to its workers or partners or shareholders, for the concept of labor incentives, bonuses, commissions, complementary compensation, premiums or any other similar, even through associations or companies, must have the treatment of a taxable income for the determination of income tax. Therefore, the persons who make such payments (even, through third parties contracted for this purpose) are obligated to make the withholding and payment of the tax, in terms of articles 10 and 96 of the Income Tax Law.

In addition to the scheme mentioned above, the aforementioned employers also deduct the payments made to said companies or associations in the determination of their income tax and, if applicable, carry out the crediting of the VAT that is transferred to them by said companies or associations; however, the expenses that could be generated by this "administration" do not constitute authorized deductions for income tax purposes, since they do not comply with what is established in article 27, fraction I of the aforementioned Law, as they are not expenditures strictly indispensable for the purposes of the taxpayer's activity. Likewise, the VAT that may have been transferred to them by said companies or associations will not be considered creditable for not complying with the requirement of article 5, fraction I, of the VAT Law, as they do not correspond to goods, services or to the use or temporary enjoyment of goods, strictly indispensable for the performance of activities other than importation.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Taxpayers who, for income tax purposes, make payments to their workers, partners or shareholders, even through associations or companies, for the concept of labor incentives, bonuses, commissions, complementary compensation for invention, premiums or any other similar concept, granting them the tax treatment of exempt income, when in reality they are income from salaries, wages, assimilated income or payment of dividends.

II.

Those who omit to make the withholding and payment of income tax for the concept of salaries, wages, income assimilated to salaries or dividends, as applicable, for the amounts that they deliver to their workers, partners or shareholders, even through associations or companies, in the terms of the previous fraction.

III.

Natural persons who receive the payments referred to in fraction I, and do not consider said received resources as taxable income for income tax purposes.

IV.

Those who make the deduction of payments made to civil associations or any other form of company or association, so that these in turn make payments of labor incentives, bonuses, commissions, complementary compensation for invention, labor compensation, premiums or any other similar concept to said workers, partners or shareholders.

V.

Those who make the crediting of VAT, corresponding to the payments made in the terms of the previous fraction.

VI.

Those who advise, counsel, provide services or participate in the realization or implementation of any of the aforementioned practices.

III.

Criteria of the VAT Law

1/IVA/NV

Prepared foods for consumption at the place of their sale by the so-called convenience stores.

Article 2o.-A, fraction I, subsection b) of the VAT Law establishes that the tax will be calculated applying a rate of 0% to the sale of products intended for human and animal food.

However, the last paragraph of fraction I of said article provides that a rate of 16% will be applied to the sale of prepared foods for consumption at the place or establishment where they are sold, even when they do not have facilities to be consumed in them, when they are for takeout or for home delivery.

Prepared foods for consumption at the place of their sale are considered to be those that result from the combination of those products that, by themselves and by their ordinary destination, can be consumed without the need to be subjected to another additional elaboration process, when the instruments or utensils necessary for their cooking or heating are available to the purchaser.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

The stores known as "convenience stores" that calculate the tax at a rate of 0%, for the sales they make of the prepared foods for consumption, referred to in the third paragraph of this criterion.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Third Resolution of

Modifications to the RMF for

2008

Published in the DOF on December 26,

2008, Annex 26, published on the

same date of the Modification, with

non-binding criterion number 2/IVA.

2/IVA/NV

Prepared foods.

Article 2o.-A, fraction I, last paragraph of the VAT Law establishes that a rate of 16% will be applied to the sale of prepared foods for consumption at the place or establishment where they are sold, even when they do not have facilities to be consumed in them, when they are for takeout or for home delivery.

In this sense, prepared foods for consumption at the place of their sale are considered to be the foods sold as part of the generic meal service, provided by hotels, restaurants, fondas, loncherías, torterías, taquerías, pizzerías, economical kitchens, cafeterias, dining rooms, roasteries, bars, cantinas, banquet services or any others of the same nature, in any of the following modalities: service on the plate, at the table, at home, to the room, for takeout and self-service.

Regarding establishments other than the aforementioned ones, such as the so-called self-service stores, it is considered that they provide the generic meal service, only for the sale of prepared or composed foods, ready for consumption and offered in bulk, regardless of whether they have prepared or combined them, or acquired them already prepared or combined. Consequently, the sale of said foods has been subject to the general VAT rate.

The sales of the foods mentioned in the previous paragraph that are made by suppliers to the establishments referred to in the cited paragraph, will only be subject to the general rate of the tax when the suppliers provide a generic meal service in the terms of the second paragraph.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

The establishments referred to in the third paragraph of this criterion that do not calculate the tax at the general rate for the sales they make of the aforementioned foods.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

First Resolution of

Modifications to the RMF for

2009

Published in the DOF on August 7,

2009, Annex 3, published in the DOF on August 11

2009, with non-binding criterion number

3/IVA.

3/IVA/NV

International or global roaming service.

Article 29, fraction IV of the VAT Law establishes that a rate of 0% will be applied to the provision of services when the same is exported, considering the export of services as the use abroad of services provided by residents in the country.

However, the international or global roaming service, provided by cellular telephone operators located in Mexico, to customers of foreign operating companies, when said customers are within the coverage area of their network, consisting of allowing them to connect and automatically make and receive voice calls and data transmissions, is a service that is used within national territory, so it should not be considered as the export of services. Therefore, the amount billed for this concept to foreign cellular telephone operators or to any other person, a rate of 16% must be applied and transferred.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Cellular telephone operators who apply article 29, fraction IV of the VAT Law and calculate the tax at a rate of 0% for the international or global roaming service.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Fourteenth Resolution of

Modifications to the RMF for

2006

Published in the DOF on March 28, 2007, Annex 26, published on the same

date of the Modification, with non-binding criterion number

1/IVA.

4/IVA/NV

Provision of services in national territory through the figure of

commercial agent.

Article 29, fraction IV, subsection d) of the VAT Law states that the export of services is considered to be the use abroad of services provided by residents in the country, for the concept of commissions and intermediation.

Therefore, any use abroad of services provided by residents in the country, for a concept other than commissions and intermediation is not considered the export of services.

For the above reason, the following is considered an improper tax practice:

I.

Considering that the provision of services, such as: port services, chartering, towing, waste elimination, repair, loading, unloading, mooring, unmooring, storage, repair, maintenance, inspection, transportation, advertising, as well as any other identified with a specific activity, performed in national territory is used abroad by being carried out through a commercial agent and for this reason they are subject to the 0% rate for VAT purposes.

II.

Advising, counseling, providing services or participating in the realization or the implementation of the aforementioned practice.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2010

Published in the DOF on December 3, 2010, Annex 3, published in the DOF on December 7

2010, with non-binding criterion number 5/IVA.

5/IVA/NV

Sale of salvaged effects.

From article 1 of the Law on the Insurance Contract, it is derived that the compensation for damage or payment of a sum of money made by insurance companies when the eventuality provided for in insurance contracts occurs, has its cause in the contracts themselves, so these operations cannot be considered as the cost of acquisition or payment of the value of the salvaged effects for said companies.

For the above reason, the following is considered an improper tax practice:

I.

Issuing a CFDI that indicates as price or consideration for the sale of the salvaged effects, the amount paid or compensated by an insurance company when the eventuality provided for in an insurance contract against damage occurs.

II.

Calculating VAT and transferring it to an insurance company that acquires the salvaged effects, considering as value the amount referred to in the previous fraction, issuing for this case a CFDI that indicates as the amount of VAT transferred, the calculated according to this fraction.

III.

Deducting or crediting VAT fiscally based on the fiscal receipts referred to in the previous fractions I and II.

IV.

Considering as the acquisition cost of the salvaged effects, for article 27 of the Regulations of the VAT Law, the amount referred to in the aforementioned fraction I.

V.

Advising, counseling, providing services or participating in the realization or the implementation of any of the aforementioned practices.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2009

Published in the DOF on December 21

2009, Annex 3, published on the same

date of the Modification, with non-binding criterion number

4/IVA.

6/IVA/NV

Withholding to residents abroad without permanent establishment

in the country.

Article 1o.-A, fraction III of the VAT Law establishes that natural or legal persons who acquire tangible goods, or use or temporarily enjoy them, that are sold or granted by residents abroad without a permanent establishment in the country, are obligated to make the withholding of the tax that is transferred to them.

On the other hand, article 3o., last paragraph of the VAT Law establishes that residents in national territory are considered, in addition to those indicated in the CFF, natural or legal persons residing abroad who have one or more establishments in the country, for all acts or activities carried out in them.

Notwithstanding the above, to determine whether the sale or the granting of the use or temporary enjoyment of tangible goods is carried out by residents abroad without a permanent establishment in the country, it is necessary to pay attention to the concept of permanent establishment provided for in the Income Tax Law and, if applicable, to the treaties to avoid double taxation that Mexico has in force.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Natural or legal persons who acquire tangible goods, or use or temporarily enjoy them, that are sold or granted by residents abroad without a permanent establishment in the country and do not make the withholding referred to in article 1o.-A, fraction III of the VAT Law, considering, among others, that the resident abroad in question is a resident in national territory in accordance with article 3o., last paragraph of said Law.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2013

Published in the DOF on May 31, 2013, Annex 3, published on the same

date of the Modification.

7/IVA/NV

VAT in air transport that begins in the border zone. It cannot

be considered that only 25% of the service is provided.

Article 1o., fraction II of the VAT Law establishes that natural and legal persons who in national territory, provide independent services, are obligated to pay the tax at a rate of 16%.

Regarding international air transport, article 16, third paragraph of the same legal instrument, specifies that the same tax treatment will be given to air transport to Mexican populations located in the 20-kilometer border strip parallel to the international dividing lines of the north and south of the country, with only 25% of the service being taxed at the general rate of the tax.

On the contrary, if the provision of the service is carried out from any Mexican population located in the border zone to any other national destination not located in said zone, the provision of the service will be taxed in its entirety at the general VAT rate.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Those taxpayers who consider that only 25% of the service is provided in national territory if the provision of the service is carried out from any Mexican population located in the border zone to any other national destination not located in said zone.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Third Resolution of

Modifications to the RMF for

2014

Published in the DOF on August 19

2014, Annex 3, published in the DOF on August 21

8/IVA/NV

Improper transfer of VAT. Transport of goods does not correspond to

the harvesting and collection service.

Article 2o.-A, fraction II, subsection a) of the VAT Law establishes that the tax will be calculated applying a rate of 0% to the values referred to in said Law, among other cases, in the provision of harvesting and collection services that are carried out directly to farmers and ranchers as long as they are intended for agricultural and livestock activities.

To this effect, tax provisions, as well as those of common federal law, do not establish a concept or definition of harvesting or collection, so attention must be paid to its grammatical meaning, considering therefore that harvesting is the set of fruits, generally of a crop, that are collected from the land when they reach maturity; as well as, the occupation of collecting the fruits from the land. In turn, collection is the action and effect of harvesting or collecting the harvest of fruits.

On the other hand, article 14, fraction II of the VAT Law states that the provision of independent services taxed at a rate of 16% of said tax is considered to be the transport of persons or goods, which must be provided by those taxpayers who have concessions or permits issued in accordance with the laws of the matter and the corresponding regulatory provisions.

The harvesting and collection of goods are activities distinct from the transport of goods, understood as the transfer or conveyance of merchandise by the carrier from one place to another, by physical or mechanical means.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Those taxpayers who consider that the service of transport of goods corresponds to the service of harvesting and collection and transfer VAT at a rate of 0%, when the applicable rate is the rate of 16%, even if it is intended for agricultural and livestock activities.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

RMF for 2015

Published in the DOF on December 30, 2014, Annex 3, published in the DOF on January 7

9/IVA/NV

Improper crediting of VAT.

Article 1 of the VAT Law establishes that natural and legal persons, who in national territory, sell goods, provide independent services, grant the use or temporary enjoyment of goods and import goods or services, are obligated to pay VAT, applying to the values referred to in the VAT Law, a rate of 16%.

Article 2o.-A of the VAT Law indicates the acts and activities to which a rate of 0% applies; likewise, articles 9, 15, 20 and 25 of the same Law establish the circumstances under which the tax will not be paid, considered as exempt acts or activities.

Article 4 of the VAT Law states that crediting consists of subtracting the creditable tax from the amount resulting from applying to the values indicated in the Law itself, the rate that corresponds, considering as creditable tax the VAT that has been transferred to the taxpayer and the tax itself that he had paid on account of the importation of goods and services, in the month in question.

In some acts or activities that according to the VAT Law do not give rise to the payment of the tax or that are subject to a rate of 0%, various taxpayers charge, in addition to the consideration for said operation, an additional amount corresponding to 16% of said consideration, which the purchaser of goods or services considers as creditable VAT.

For the above reason, the following are considered to be carrying out an improper tax practice:

I.

Those taxpayers who credit the amount paid as excess to the consideration agreed with the taxpayer.

II.

Those who advise, counsel, provide services or participate in the realization or implementation of the aforementioned practice.

Origin

First antecedent

Fifth Resolution of

Modifications to the RMF for

2015

Published in the DOF on November 19

2015, Annex 3, published on November 20

10/IVA/NV

Real estate intended for lodging, through technological

platforms.

Article 1o., fraction III of the VAT Law establishes that natural and legal persons who in national territory grant the use or temporary enjoyment of goods, are obligated to pay the tax at a rate of 16%.

Article 19, first paragraph of the aforementioned Law establishes that it is understood by

use or temporary enjoyment of goods, leasing, usufruct, and any other

act, regardless of the legal form used for this purpose, by which

a person allows another person to use or temporarily enjoy tangible goods in

exchange for consideration.

For its part, Article 20, Section II of the VAT Law establishes that no

VAT shall be paid for the use or temporary enjoyment of real estate intended for

housing, this exemption not being applicable to real estate or parts thereof

in the following cases:

I.

To furnished real estate.

II.

To real estate intended as hotels.

III.

To real estate intended as guesthouses.

It has been detected that there are taxpayers, both individuals and corporations, who

through a technological platform provide lodging, without paying VAT for

this activity.

Since lodging is excluded from the exemption applied to the use or

temporary enjoyment of real estate intended or used exclusively for housing,

this activity is subject to the payment of VAT.

As a result, individuals or corporations that use technological

platforms to provide the aforementioned lodging must pay 16% VAT

on the amount of the agreed consideration.

Therefore, the following are considered improper tax practices:

I.

Those taxpayers who omit the payment of the corresponding VAT for

providing lodging through the use of technological platforms.

II.

Those who advise, counsel, provide services, or participate in the realization or

implementation of the aforementioned practice.

Origin

First antecedent

First Resolution of

modifications to the RMF for

2019

Published in the DOF on August 20, 2019, Annex 3, published in the DOF on August 21

of 2019.

11/IVA/NV

It is inappropriate to credit VAT without meeting the requirements established by

the law, as well as the offsetting of VAT balances in favor against

ISR withholdings, regarding the Federation, Mexico City, the

States, and the Municipalities.

Articles 1 and 3, first paragraph of the VAT Law establish that the

Federation, Mexico City, the States, and the Municipalities, even when

attentive to what is established in other laws or decrees, do not cause federal

taxes or are exempt from them, are obligated to accept the pass-through of

VAT and, if applicable, pay it and pass it on, specified in the same Article 3,

second paragraph, that they will have the obligation to pay the tax only

for the acts they carry out that do not give rise to the payment of fees or

revenues and may only credit the VAT that has been passed on to them

in expenditures or paid on importation, which is identified

exclusively with the activities for which they are obligated to pay the tax

established in the aforementioned law or to which the 0% rate applies.

From the above, it is observed that as a general rule, it is not appropriate for these

public entities to carry out the crediting of VAT that has been passed on to them

in expenditures for goods or services that they allocate to functions or activities

that are not part of the object of VAT, being considered as

final consumers of the goods and services and bearing the economic incidence

of the tax and, consequently, the VAT that has been passed on to them

should not be refunded.

The activities they normally develop correspond to their public law functions

and, therefore, are outside the scope of the tax.

However, by exception, the aforementioned public entities carry out certain

activities that fall within the scope of VAT due to being the sale of

goods or provision of services in which they charge a price, consequently

paying the tax. Hence, crediting is only appropriate in these cases

for the tax that has been passed on to them in expenditures

or that they have paid on imports, of goods or services that are

identified exclusively with the activities for which the tax must be paid

or for which the 0% rate applies.

According to the above, to determine the VAT to be paid, Articles 4 and

5 of the aforementioned Law indicate the procedure and requirements for crediting

the tax, which consists of subtracting the creditable tax from the amount

resulting from applying to the values indicated in the aforementioned Law, the rate

that corresponds according to the case.

Likewise, Article 32 of the VAT Law, in Sections I, III, IV, and VII,

establishes the obligation to keep accounting records, issue fiscal receipts,

file declarations, etc., and if these are not available, the crediting established by Article 3 of said Law does not proceed.

In view of the above, from the interpretation of the aforementioned fiscal provisions,

although it is true that the aforementioned public entities, as a general rule, do not have expenditures whose concepts are

creditable for VAT and, therefore, are not in a position to determine a balance in favor for

this concept, it is also true that as an exception they carry out activities

taxed by VAT and may credit it, provided that they comply with the obligations established by the law of said tax and, if applicable, with

the documents supporting their operations.

Article 5 of the aforementioned Law establishes that for VAT to be creditable,

it must correspond to goods, services, or the use or temporary enjoyment of goods,

strictly indispensable for the carrying out of activities, other than importation, considered as such, the expenditures made that are

deductible for the purposes of the tax, even if one is not obligated to pay

this latter tax.

Likewise, Article 6 of the VAT Law establishes that

taxpayers who have a balance in favor in their payment declaration, may credit it against the tax owed to them in the following

months until exhausted or request its refund, provided that the refund

is requested for the total balance in favor.

While Article 23 of the CFF states that taxpayers obligated to pay

through declaration may only opt to offset the amounts they have in favor against those they are obligated to pay for

own debt, provided that both derive from the same tax, including

their accessories.

According to the aforementioned provisions, there is no possibility that

amounts in favor of taxpayers derived from one tax can be offset against amounts owed by them from another tax and,

specifically, regarding VAT balances in favor, according to Article 6,

of the VAT Law, crediting is only appropriate against the tax owed in the following months or request its refund.

In this sense, it is inappropriate for the Federation, Mexico City, the

States, and the Municipalities to cover ISR withholdings (salaries,

professional services and payments on behalf of third parties or withholdings for leasing

of real estate) via offsetting applying VAT balances in favor, in

contravention of what is stated in

Articles 23 of the CFF and 6, first paragraph of

the VAT Law.

Therefore, it is considered that the Federation, Mexico City, the

States, and the Municipalities, carry out an improper tax practice:

I.

When they obtain balances in favor for the concept of VAT without complying with

the requirements established by the Law.

II.

When they offset VAT balances in favor, against ISR withholdings.

III.

Likewise, it is considered that an improper tax practice is carried out

those who advise, counsel, provide services, or participate in the

realization or implementation of the aforementioned practices.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29

of 2019, Annex 3, published in the DOF on

January 9, 2020.

IV.

Criteria of the IEPS Law

1/IEPS/NV

Base on which the IEPS rate will be applied when the service provider

provides telecommunications terminal equipment or grants

its use or temporary enjoyment to the service recipient, regardless of the instrument

legal that is used to provide the service.

Article 2, Section II, subsection C) of the IEPS Law establishes that to the

provision of services in national territory provided through one or

more public telecommunications networks, the 3% rate will be applied.

Article 17, second paragraph of the CFF states that when, as a result of the

provision of a service, goods are provided or their use or temporary enjoyment is granted to the service recipient, it will be considered as income for the service or as

value thereof, the total amount of the consideration payable by the service recipient,

provided that they are goods that are normally provided or their

use or temporary enjoyment is granted with the service in question.

Therefore, if with the provision of the telecommunications service

telecommunications terminal equipment is provided or these are granted

for their use or temporary enjoyment to the service recipient, it will be considered as value the

amount of the considerations that the provider charges the recipient for the

totality of the aforementioned concepts in accordance with Article 17,

second paragraph of the CFF.

Therefore, the following are considered improper tax practices:

I.

Not considering as the value of the consideration, the total amount of

goods and services.

II.

Decreasing the tax base by the value of the goods provided,

whether permanently or temporarily.

III.

Advising, counseling, providing services, or participating in the realization or the

implementation of any of the aforementioned practices.

Origin

First antecedent

RMF for 2010

Published in the DOF on June 11

of 2010, Annex 3, published in the DOF on June 15

of 2010.

2/IEPS/NV

Services offered jointly with Internet.

Article 8, Section IV, subsection d), first paragraph of the IEPS Law

establishes that IEPS shall not be paid for telecommunications services of

Internet access, through a fixed or mobile network, consisting of all

services, applications, and content that through said Internet access are

provided through a telecommunications network.

Likewise, the second paragraph of subsection d) mentioned above, states that when the

services referred to in the previous paragraph are offered jointly

with other services provided through a public network of

telecommunications, the exemption established therein will be appropriate

provided that in the respective fiscal receipt, the

consideration corresponding to the Internet access service is determined separately from the other telecommunications services provided through

a public network and that said consideration is determined in accordance with

the prices and amounts of the considerations that would have been charged if the

service had not been provided jointly with other telecommunications services

taxed by this Law; in which case, the exempt Internet services cannot exceed 30% of the total of the considerations

aforementioned that are billed jointly.

Regarding this, it is considered that according to Article 8, Section IV, subsection d),

first paragraph of the IEPS Law, only the Internet access service is

exempt from the payment of the tax. According to the second paragraph

of said subsection, it is considered that the telecommunications services that

are subject to the payment of IEPS and that can be provided jointly with

the Internet access service are, among others, the following:

I.

Local service, understood as that by which public switched traffic is conducted

between users of the same central office, or between

users of central offices that are part of the same group of local service central

offices, which does not require dialing a prefix for

access to the long-distance service, regardless of whether said

public switched traffic originates or terminates in a public network of

wired or wireless telecommunications, and for which a

tariff independent of distance is charged.

The local service must have local numbering assigned and administered

by the Federal Telecommunications Commission, in accordance with the

Fundamental Technical Plan of Numbering and comprises the services of

basic local telephony and mobile cellular radiotelephony.

II.

Long-distance service, understood as that by which

switched traffic is routed between central offices defined as long-

distance, which are not part of the same group of local service central

offices, and which requires dialing a prefix for access to the long-distance service for its routing.

III.

Restricted television service, understood as that by

which, through contract and the periodic payment of a predetermined and

reviewable amount, the concessionaire or permittee distributes

continuously audio and video programming associated.

IV.

Restricted audio service, understood as that by

which, through contract and the periodic payment of a predetermined and

reviewable amount, the concessionaire or permittee distributes continuously

audio programming.

V.

Specialized fleet mobile radiocommunication service (Trunking), understood as the terrestrial mobile radiocommunication service of

voice and data to groups of determined users, using the

semi-duplex transmission mode.

For the purposes of paragraphs 1 and 2 of this criterion, public switched traffic is understood as any emission, transmission or reception of signs,

signals, data, writings, images, voice, sounds, or information of any

nature that is carried out through a public telecommunications network that uses for its routing both central offices and numbering assigned and

administered by the Federal Telecommunications Commission, in accordance

with the Fundamental Technical Plan of Numbering.

Therefore, the following are considered improper tax practices:

I.

Considering that the set of services mentioned above, by

including the Internet access service, is exempt according to Article 8, Section IV, subsection d) of the IEPS Law.

II.

Advising, counseling, providing services, or participating in the realization or the

implementation of the aforementioned practice.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2010

Published in the DOF on December 3

of 2010, Annex 3, published in the DOF on December 7

of 2010.

3/IEPS/NV

Products that by their ingredients are located in the definition of

chocolate or products derived from cocoa, regardless of their

commercial denomination or the way in which they are suggested to be

consumed, are taxed for IEPS purposes.

Article 2, Section I, subsection J), numeral 3 of the IEPS Law establishes that

an 8% rate will be applied to the value of the sale or, if applicable, the

importation of chocolate and other products derived from cocoa, with a

caloric density of 275 kilocalories or greater per 100 grams.

Article 3, Sections XXVIII and XXIX of the aforementioned Law, provide that

chocolate is understood as the product obtained by the homogeneous mixture of

variable amounts of cocoa paste, or cocoa butter, or cocoa with

sugars or other sweeteners, optional ingredients, and food additives

for foods, regardless of its presentation; and products derived from cocoa, cocoa butter, cocoa paste or liquor, cocoa cake, among others,

respectively.

In this sense, the existence of various products is observed that are

sold or imported under commercial denominations such as chocolate powder, powdered food to prepare a chocolate-flavored beverage,

extracts, modifiers, among others, whose ingredients correspond to those

identified by the IEPS Law as characteristic of chocolate or products

derived from cocoa, so that regardless of their commercial denomination they must be considered taxed in accordance with Article 2,

Section I, subsection J), numeral 3 of the aforementioned law, provided that at the time of their

sale or importation they contain a caloric density of 275 kilocalories

or greater per 100 grams.

Therefore, the following are considered improper tax practices:

I.

Selling or importing chocolate or products derived from cocoa, with a

caloric density of 275 kilocalories or greater per 100 grams and not

paying or passing on the IEPS by considering that:

a)

The name or commercial denomination of the foods that

they sell or import is not that of chocolate or products derived

from cocoa or;

b)

Once the final consumer mixes, dilutes, or combines

said foods with other substances or ingredients, the resulting product

has a caloric density less than 275 kilocalories per

100 grams or because its nature is modified from

solid to liquid.

II.

Advising, counseling, providing services, or participating in the realization or the

implementation of the aforementioned practice.

Origin

First antecedent

Fifth Resolution of

Modifications to the RMF for

2014

Published in the DOF on October 16

of 2014, Annex 3, published in the DOF on October 17

of 2014.

4/IEPS/NV

Taxable base of IEPS in the provision of games with

betting and lottery services.

Article 18 of the IEPS Law establishes that to calculate the tax for the

carrying out of the activities referred to in subsection B) of Section II of

Article 2 of the same, the total amount of amounts

effectively received from participants for said activities will be considered as value. In

games or lotteries in which a bet is placed, the total amount

of the bets will be considered as value.

Article 5, second paragraph of the CFF allows the application of supplementary

dispositions of common federal law, in this sense, Article 3, Section

I of the Regulation of the Federal Law on Games and Lotteries establishes that by

bet is understood the amount susceptible of being appreciated in national currency

that is risked in a game with the possibility of obtaining or winning a prize,

whose amount, added to the amount risked, must be greater than this.

In this sense, in the carrying out of games or lotteries in which a bet is implied,

the value that must be considered for IEPS calculation purposes

will be the total amount wagered, including cash and any other amount that

is granted to participants regardless of the denomination given to it (promotions, memberships, access to facilities, among others), in

virtue of which these concepts can also be wagered by the

participants.

As a result, in the central betting system and the system of

cash and cash control referred to in Article 20, Section I of the

IEPS Law, the total amount wagered must be registered and this moment

occurs when the game or lottery is carried out.

Therefore, regarding games or lotteries in which a bet is placed,

it is considered that an improper tax practice is carried out by whoever:

I.

Considers only cash to calculate the taxable base for

IEPS purposes.

II.

Registers in the central betting system and in the cash and

cash control system, the amounts received before the

game or lottery is carried out.

III.

Does not include as value for calculating the tax, any other amount

that is granted to participants regardless of the

denomination given to it (promotions, memberships, access to

facilities, among others) that is granted to participants.

IV.

Those who advise, counsel, provide services, or participate in the realization or

the implementation of any of the aforementioned practices.

Origin

First antecedent

Third Resolution of

Modifications to the RMF for

2016

Published in the DOF on July 14

of 2016, Annex 3, published in the DOF on July 15

of 2016.

5/IEPS/NV

Amounts to be decreased as prizes to determine the taxable base

of IEPS in the provision of games with betting and lottery services.

Article 2, Section II, subsection B) in relation to 18, fourth paragraph,

Section I of the IEPS Law considers within the concepts that may be

decreased from the tax base, the prizes effectively paid or

delivered in accordance with the applicable provisions.

For tax purposes, the prizes that participants obtain in games

with betting and lotteries are the remuneration obtained by the winner of a game

with betting and lotteries, and that are paid by those who have permission from the

competent authority to consider them as such, not so, those

amounts that do not fall under the previous concept because they are

promotions, memberships, access to facilities, among others.

Therefore, the following are considered improper tax practices:

I.

Decreasing the IEPS base by promotions, memberships, access to

facilities, among others, as they do not correspond to the remuneration that

the winner of a game with betting and lotteries obtains.

II.

Advising, counseling, providing services, or participating in the realization or the

implementation of the aforementioned practice.

Origin

First antecedent

RMF for 2017

Published in the DOF on December 23

of 2016, Annex 3, published in the DOF on

December 27, 2016.

V.

Criteria of the LISH

1/LISH/NV

Condensates and natural gas. They are distinct concepts for

determining the base of the fees for shared utility and

extraction of hydrocarbons for assignees.

Articles 39, first paragraph; 42, first paragraph, and 44, first paragraph of the

LISH obligate assignees to pay the fees for shared utility and

extraction of hydrocarbons, whose base is integrated with the value of the

hydrocarbons extracted in the period corresponding.

For such purposes, Article 48, Section I of the LISH considers as value of

the extracted hydrocarbons, among other concepts, the sum of the value of the

natural gas and the value of the condensates, as applicable, extracted in the

region in question, in the period for which the payment of the

respective fee is obligated.

Article 3, Section IV of the LISH defines condensates as the liquids

of natural gas constituted mainly by pentanes and components of

heavier hydrocarbons; for its part, Article 4, Section XVII of the Hydrocarbons Law establishes that natural gas is the mixture of gases that is

obtained from extraction or industrial processing and that is constituted

mainly by methane.

Thus, and for the purposes of calculating the fees provided for in the

Articles 39, first paragraph; 42, first paragraph, and 44, first paragraph of the LISH,

the concept of condensates is distinct from that of natural gas.

Therefore, the following are considered improper tax practices:

I.

Not including in the base of the fees for shared utility and

extraction of hydrocarbons, the value of the condensates extracted or

produced in the assignment area.

II.

Considering condensates as another type of hydrocarbon to

calculate the base of the fees for shared utility and

Hydrocarbon extraction.

II I.

Advising, counseling, providing services, or participating in the carrying out or implementation of the aforementioned practices.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2015

Published in the DOF on July 2, 2015, Annex 3, published in the DOF on July 10 of 2015.

2/LISH/NV

Permanent establishment for the purposes of the LISH. Exploration and hydrocarbon extraction are not the only activities through which a permanent establishment can be constituted.

Article 64, first paragraph of the LISH establishes that, for the purposes of said law, as well as the Income Tax Law (ISR), a permanent establishment is considered to be constituted when a resident abroad carries out the activities referred to in the Hydrocarbons Law, in national territory or in the exclusive economic zone over which Mexico has rights, in a period that sums together more than 30 days in any period of 12 months.

Article 2 of the Hydrocarbons Law indicates that this law has the object of regulating the following activities in national territory:

I.

Surface recognition and exploration, and exploration and extraction of hydrocarbons;

II.

Treatment, refining, sale, marketing, transport and storage of petroleum;

III.

Processing, compression, liquefaction, decompression and regasification, as well as transport, storage, distribution, marketing and retail sale to the public of natural gas;

IV.

Transport, storage, distribution, marketing and retail sale to the public of petroleum products, and

V.

Pipeline transport and storage linked to pipelines, of petrochemicals.

Unlike Article 64, fourth paragraph of the LISH which only contemplates the activities of contractors or assignees, the first paragraph of said article includes all activities referred to in the Hydrocarbons Law.

For the above reason, the following is considered an improper tax practice:

I.

Considering that Article 64, first paragraph of the LISH only refers to the activities of contractors or assignees provided for in the Law of Hydrocarbons.

II.

Advising, counseling, providing services, or participating in the carrying out or implementation of the aforementioned practice.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2015

Published in the DOF on September 29 of 2015, Annex 3, published on the same date as the Modification.

VI.

Criteria of the LIF

1/LIF/NV

Fiscal incentive for taxpayers who import or acquire diesel or biodiesel and their mixtures for automotive use in vehicles destined exclusively to transport. Its amount must be determined considering the IEPS that has actually been incurred.

Article 16, section A, fraction IV, first paragraph of the LIF grants a fiscal incentive to taxpayers who import or acquire diesel or biodiesel and mixtures for their final consumption and which is for automotive use in vehicles destined exclusively to public and private transport, of persons or cargo, as well as tourism, consisting of allowing the crediting of an amount equivalent to the IEPS that persons who sell diesel or biodiesel and their mixtures in national territory have incurred by the sale of these fuels in terms of Article 2nd, fraction I, subsection D), numeral 1, sub-subsection c) or numeral 2 of the IEPS Law, according to the type of fuel, with the adjustments that correspond in each case, as well as the crediting of the tax referred to in the cited numeral, that they have paid in their importation.

The Sole Article of the " Decree modifying the decree establishing fiscal incentives in the matter of IEPS applicable to the indicated fuels, published on December 27, 2016 ", published in the DOF on December 28, 2018, states that a fiscal incentive is granted during the fiscal years of 2018 and 2019 to taxpayers who import and sell gasolines, diesel and non-fossil fuels referred to in Article 2nd, fraction I, subsection D), numerals 1 and 2 of the IEPS Law, consisting of an amount equivalent to a percentage of the quotas applicable to said fuels and that the fiscal incentive will be applied directly on the quotas that correspond, in order to reduce the latter.

The application of Article 16, section A, fraction IV, first paragraph of the LIF implies the determination of an amount equivalent to the IEPS that persons who sell diesel or biodiesel and their mixtures in national territory have incurred by the sale of these fuels in terms of Article 2nd, fraction I, subsection D), numeral 1, sub-subsection c) or numeral 2 of the IEPS Law. In this sense, if the taxpayers who sold in national territory diesel or biodiesel and their mixtures, incurred the IEPS in accordance with the Sole Article of the " Decree modifying the decree establishing fiscal incentives in the matter of special tax on production and services applicable to the indicated fuels, published on December 27, 2016 ", published in the DOF on December 28, 2018, that is, applying reduced quotas, these are the ones that according to the cited Decree must be considered for the application of the incentive established in Article 16, section A, fraction IV, first paragraph of the LIF. To this effect, it has been detected that some taxpayers who apply the incentive to which Article 16, section A, fraction IV, first paragraph of the LIF refers, determine the amount of the same considering the updated quotas established in the IEPS Law, without any adjustment, carrying out a calculation that results in a higher amount compared to what would have been obtained using the reduced quotas according to which the IEPS was actually incurred, as expressly stated in the cited article.

For the above reason, it is considered that the following constitute an improper tax practice:

I.

Taxpayers who determine the amount of the incentive referred to in Article 16, section A, fraction IV, first paragraph of the LIF, considering the updated quotas established in the IEPS Law instead of those according to which the IEPS was incurred by the sale of diesel, biodiesel and their mixtures in accordance with the Sole Article of the " Decree modifying the decree establishing fiscal incentives in the matter of special tax on production and services applicable to the indicated fuels, published on December 27, 2016 ", published in the DOF on December 28, 2018.

II.

Those who advise, counsel, provide services or participate in the carrying out or implementation of the aforementioned practice.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29 of 2019, Annex 3, published on January 9 of 2020.

VII.

Criteria of the LFD

1/LFD/NV

Extraordinary Right on Mining. The recognition of income must be made at the time of the sale or transfer of gold, silver and platinum, regardless of the moment when the consideration is received.

Articles 2nd, fraction IV of the CFF and 1st of the LFD state that the rights established in said Law will be paid for the use or exploitation of the goods of public domain of the Nation.

In turn, Article 270, first paragraph of the LFD establishes that the holders of mining concessions and assignments will pay annually the extraordinary right on mining, applying a rate of 0.5% to the income derived from the sale of gold, silver and platinum, through a declaration that will be presented to the offices authorized by the SAT no later than the last business day of the month of March of the year following that to which the payment corresponds.

From the harmonious and systematic interpretation of the analyzed provisions, it is derived that the extraordinary right on mining is a levy that was created by the legislator for the use or exploitation of the goods of public domain of the Nation, which is materialized with the sale of gold, silver and platinum.

In this sense, the activity taxed by the extraordinary right on mining is configured with the sale of gold, silver and platinum, so that at the moment this occurs, the hypothesis of taxation is updated, with independence of whether the delivery of the consideration for said sale is made at a later moment. To this effect, it has been detected that some taxpayers of the extraordinary right on mining defer their payment until the moment when they receive the corresponding consideration for the sale of gold, silver and platinum, instead of considering the moment of their sale.

For the above reason, it is considered that the following constitutes an improper tax practice:

I.

The taxpayer who does not make the payment of the extraordinary right on mining, no later than the last business day of the month of March of the year following that in which they have carried out the sale of gold, silver and platinum, regardless of whether the delivery of the consideration for said sale is made at a later moment.

II.

Those who advise, counsel, provide services or participate in the carrying out or implementation of any of the aforementioned practices.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29 of 2019, Annex 3, published on January 9 of 2020.

2/LFD/NV

Extraordinary Right on Mining. The base for calculating the payment of the right corresponds to the total income of the period without any deduction.

Article 270, first paragraph of the LFD establishes the base for calculating the payment of the extraordinary right on mining, applying a rate of 0.5% to the income derived from the sale of gold, silver and platinum.

The second paragraph of the aforementioned article indicates that said right will be calculated considering the total income of the mining concessionaire or assignee from the sale or transfer of gold, silver and platinum, regardless of the number of concessions or assignments of which they are the holder.

From the reading of the cited paragraphs, it is evident that the legislator provided that the payment of the extraordinary right on mining must be calculated on the total income, without considering any type of subtractive element or deduction from them. To this effect, it has been detected that some taxpayers of the extraordinary right on mining reduce from the total income derived from the sale or transfer of gold, silver and platinum, concepts not provided for in the LFD.

For the above reason, it is considered that the following constitutes an improper tax practice:

I.

The taxpayer who in the determination of the extraordinary right on mining, reduces, in any way, the total income derived from the sale or transfer of gold, silver and platinum.

II.

Those who advise, counsel, provide services or participate in the carrying out or implementation of any of the aforementioned practices.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29 of 2019, Annex 3, published on January 9 of 2020.

3/LFD/NV

Special Right on Mining and Extraordinary Right on Mining. The acquirers of the ownership of a concession or of the rights relative to this, who obtain income from the extractive activity or sell gold, silver and platinum, are obliged to its payment.

Article 262 of the LFD establishes that all natural or legal persons holders of a concession or who carry out works related to the exploration or exploitation of substances or minerals subject to the application of the Mining Law are obliged to pay the rights on mining that Chapter XIII " Mining " of said Law establishes.

On the other hand, Articles 268, first paragraph and 270, first paragraph of the LFD indicate that the holders of mining concessions and assignments will pay annually the special right on mining and the extraordinary right on mining, respectively, applying a rate of 7.5% to the positive difference that results from reducing from the income derived from the sale or transfer of the extractive activity, the deductions allowed in the aforementioned Article 268, as well as a rate of 0.5% to the income derived from the sale of gold, silver and platinum, respectively, through a declaration that will be presented to the offices authorized by the SAT, no later than the last business day of the month of March of the year following that to which the payment corresponds.

The statement of reasons that gave rise to the reform of the LFD, published in the DOF on December 11, 2013, justified the inclusion of Article 268 of the LFD with the purpose that the State obtains a fair retribution for the exploitation of the non-renewable resources of the Nation, through the establishment of a reasonable percentage in accordance with the net profit obtained that directly reflects the benefit derived from extraction.

This reform also gave rise to the addition of Article 270 of the LFD, indicating that the right referred to in said article has the objective of retributing the State for the extraction of precious minerals that have a value in the international market considerably higher than that of other metals, whose extractive processes affect the environment in which they are located, in addition to the depletion of non-renewable resources.

On its part, Article 19, fraction VII of the Mining Law indicates that mining concessions confer the right to transmit their ownership or the rights established by fractions I to VI of said article to persons legally qualified to obtain them.

Article 23, first paragraph of said Law specifies that the transmission of the ownership of mining concessions or of the rights derived from them will take legal effect against third parties from their registration in the Public Mining Registry.

From the harmonious and systematic interpretation of the analyzed provisions, it is concluded that the acquirers of rights relative to mining concessions who obtain income derived from the sale or transfer of the extractive activity, or who sell or transfer gold, silver and platinum, are located, respectively, in the hypotheses of taxation provided for in Articles 268 and 270 of the LFD, regardless of whether the transmission of the ownership of said concessions or of the rights derived from them, takes effect against third parties from their registration in the Public Mining Registry. To this effect, it has been detected that some taxpayers who carried out the acquisition of the ownership of a concession or of the rights relative to this, who obtain income derived from the extractive activity or carry out the sale or transfer of gold, silver and platinum extracted from the respective mine, do not make the payment of the special right on mining and the extraordinary right on mining, arguing that they are not obligated subjects to the payment of said rights because they do not have the ownership of the mining concession, or well that the transmission of the ownership of the concession or the rights has not yet taken legal effect against third parties, due to the fact that their registration is in process in the Public Mining Registry.

For the above reason, it is considered that the following constitutes an improper tax practice:

I.

The acquirers of the ownership of a concession or of the rights relative to this, who obtain income derived from the extractive activity or those who sell or transfer gold, silver and platinum, and do not pay the special and extraordinary rights on mining referred to in Articles 268 and 270 of the LFD, respectively.

II.

Those who advise, counsel, provide services or participate in the carrying out or implementation of any of the aforementioned practices.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29 of 2019, Annex 3, published on January 9 of 2020.

4/LFD/NV

Special Right on Mining. Deduction of fixed asset investments.

Article 268, first paragraph of the LFD establishes that the holders of concessions and mining assignments will pay annually the special right on mining, applying a rate of 7.5% to the positive difference that results from reducing from the income derived from the sale or transfer of the extractive activity, the deductions allowed in said article.

The third paragraph of the mentioned article indicates that for the determination of the base of said right, the deductions authorized according to the Income Tax Law (ISR) may be reduced, with the exception, among others, of investments, except those made for mining prospecting and exploration or those that substitute them.

Article 32, first and second paragraphs of the Income Tax Law (ISR) specifies that investments are considered, among other concepts, fixed assets, defined as the collection of tangible goods that taxpayers use for the carrying out of their activities and that depreciate due to use in the service of the contributor and due to the passage of time. Likewise, the second paragraph referred establishes that the acquisition or manufacture of these goods will always have as its purpose the use of them for the development of the activities of the contributor, and not that of being sold within the normal course of their operations. To this effect, it has been detected that some taxpayers of the special right on mining, transfer fixed assets that were their property to their related parties through the sale, spin-off or any other legal figure and, subsequently, agree on their use, enjoyment or exploitation, in exchange for a payment that they consider a deductible expense for the purposes of the special right on mining, thereby avoiding the impossibility of deducting the value of fixed asset investments, which are not allowed according to Article 268, third paragraph of the LFD.

Therefore, it is considered that the following constitutes an improper tax practice:

I.

The taxpayer who in the determination of the special right on mining deducts expenses for the use, enjoyment or exploitation of goods that derive from fixed asset investments that had been their property and, subsequently, have been transferred to their related parties, to whom they make the corresponding payments for said use, enjoyment or exploitation of goods.

II.

Advising, counseling, providing services, or participating in the carrying out or implementation of the aforementioned practice.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29 of 2019, Annex 3, published on January 9 of 2020.

5/LFD/NV

Special Right on Mining. For its determination, the deduction of fixed asset investments, deferred expenses and deferred charges is inappropriate.

Article 268, first paragraph of the LFD establishes that the holders of concessions and mining assignments will pay annually the special right on mining, applying a rate of 7.5% to the positive difference that results from reducing from the income derived from the sale or transfer of the extractive activity, the deductions allowed in said article.

The third paragraph, subsection a) of the mentioned article indicates that, for the determination of the base of said right, the deductions authorized according to the Income Tax Law (ISR) may be reduced, with the exception, among others, of that contemplated in Article 25, fraction IV of said legal instrument, except if it is about the investments made for mining prospecting and exploration or those that substitute them.

From the above, it is concluded that for the determination of the special right on mining, the deduction of investments other than those made for mining prospecting and exploration or those that substitute them is inappropriate. Regarding this, it has been detected that some taxpayers subject to the payment of the special right on mining carry out expenditures that correspond to investments in fixed assets, deferred expenses or deferred charges, to which they inappropriately give the fiscal treatment of expenditures made in pre-operational period or as cost of goods sold or expense of the exercise, as referred to in Articles 32, last paragraph and 25 of the Income Tax Law (ISR), respectively, thereby evading the prohibition to deduct investments other than those made for mining prospecting and exploration or those that substitute them, established in Article 268, third paragraph, subsection a) of the LFD, which leads to the reduction or non-payment of the special right on mining.

Therefore, it is considered that the following constitutes an improper tax practice:

I.

The taxpayer who, in the determination of the special right on mining, deducts the value of investments corresponding to fixed assets, deferred expenses or deferred charges, characterizing them as expenditures made in pre-operational period or as concept of cost of goods sold, expenses of the exercise or any other concept, regardless of the name by which it is designated.

II.

Advising, counseling, providing services, or participating in the carrying out or implementation of the aforementioned practice.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2020

Published in the DOF on November 18 of 2020, Annex 3, published on November 23 of 2020.

6/LFD/NV

Special Right on Mining. The acquisition of mining concessions is not the nature of an investment made for mining prospecting and exploration, so its deduction is inappropriate for the determination of the cited right.

Article 268, first paragraph of the LFD establishes that the holders of concessions and mining assignments will pay annually the special right on mining, applying a rate of 7.5% to the positive difference that results from reducing from the income derived from the sale or transfer of the extractive activity, the deductions allowed in said article.

The third paragraph, subsection a) of the mentioned article indicates that, for the determination of the base of said right, the deductions authorized according to the Income Tax Law (ISR) may be reduced, with the exception, among others, of that contemplated in Article 25, fraction IV of said legal instrument, except if it is about the investments made for mining prospecting and exploration or those that substitute them.

Articles 16 of the General Law of National Goods and 3, fraction I, 15 and 19 of the Mining Law establish that a mining concession title is one that confers rights to private individuals to explore and exploit a mining lot, and that exploration consists of the works and tasks carried out on the land with the object of identifying mineral deposits or substances, as well as of quantifying and evaluating the economically exploitable reserves.

Article 32, first and third paragraphs of the Income Tax Law (ISR) establish that investments are considered, among other concepts, deferred expenses, being these the intangible assets that allow the exploitation of goods of public domain

public or the provision of a concessioned public service.

In relation to the above, in the Executive's initiative regarding the explanatory statement that gave rise to the reform of the referred paragraph, published in the DOF on December 31, 1999, it was indicated: "(...) it is proposed to that Sovereignty to expressly establish the deduction of expenditures for the acquisition of the concession title as a deferred expense, (...).", under the following considerations: "(...) the Income Tax Law does not expressly establish how to deduct expenditures made for the acquisition of concession titles. This has generated uncertainty among taxpayers and the application of percentages that in some cases are much higher than what corresponds to their useful life. This could lead to companies benefiting from concessions not paying income tax for long periods of time improperly (...)".

In this sense, the acquisition of rights for the exploration and exploitation of minerals, known as mining concessions, do not constitute the works and tasks carried out on the land with the object of identifying mineral deposits, quantifying or evaluating economically exploitable reserves, but rather constitute an intangible asset that allows its buyer to exploit a public domain asset.

Therefore, the acquisition of said rights, regardless of the stage in which the mining lot is located at the time the acquisition takes place, has the nature for tax purposes of a deferred expense, not that of an investment carried out for mining prospecting and exploration referred to in Article 268, third paragraph, subsection a), last sentence of the LFD, since such acquisition grants individuals the right to exploit the mining lot.

Regarding this, it has been detected that there are taxpayers subject to the payment of the special mining duty who, when determining the base of said duty, deduct the values corresponding to the acquisition of the so-called mining concession, incorrectly considering it to be an expenditure made in the pre-operational period and not a deferred expense, thereby evading the prohibition to deduct investments other than those made for mining prospecting and exploration or those that replace them, established in Article 268, third paragraph, subsection a) of the LFD, which leads to the reduction or non-payment of the special mining duty.

Therefore, it is considered that an improper tax practice is carried out:

I.

The taxpayer who, in the determination of the special mining duty, deducts the values corresponding to the acquisition of rights for mineral exploration and exploitation.

II.

Advising, counseling, providing services, or participating in the realization or implementation of the previous practice.

Origin

First antecedent

Third Resolution of Modifications to the RMF for 2020

Published in the DOF on November 18, 2020, Annex 3, published on November 23, 2020.

B.

Repealed

The following criteria will continue to produce effects with respect to the legal situations or facts that they regulated at the time:

I.

Criteria of the Income Tax Law

10/ISR/NV

Investments made by civil organizations and trusts authorized to receive deductible donations.

Article 82, fraction IV of the Income Tax Law establishes that non-profit moral persons authorized to receive deductible donations must dedicate their income and assets exclusively to the purposes of their social object, without being able to grant benefits on the distributable remainder to any natural person or their members, unless they are moral persons or trusts authorized to receive deductible donations.

In this sense, by social object or authorized purpose is understood exclusively the activity that the tax authority verified is located in the scenarios contemplated in the tax provisions as allowable and that through the corresponding resolution was informed to the moral person or trust.

For the above, it is considered that an improper tax practice is carried out by the civil organization or trust that has authorization to receive deductible donations that directly, through the figure of the trust or through third parties, dedicates all or part of its patrimony or assets to:

I.

The constitution of other moral persons.

II.

The acquisition of shares, outside the recognized markets referred to in Article 16-C, fractions I and II of the CFF, or titles referenced to price indices referred to in fraction III of the same article, when these are not integrated by shares that are normally traded in recognized markets and are not defined and published by a stock exchange concessioned under the terms of the LMV.

III.

The acquisition of contribution certificates issued by national credit societies, social parts, participations in civil associations, and ordinary participation certificates issued based on trusts on shares that are authorized in accordance with the applicable legislation on foreign investment.

IV.

The acquisition of shares issued by persons considered related parties under Article 179, fifth paragraph of the Income Tax Law, both residents in Mexico and abroad.

It is not considered an improper tax practice to participate as a partner, associate, or settlor in civil organizations or trusts that have authorization to receive deductible donations.

Origin

First antecedent

RMF for 2013

Published in the DOF on December 28, 2012, Annex 3, published in the DOF on December 31, 2012, with non-binding criterion number 15/ISR.

Repeal

Second Resolution of Modifications to the RMF for 2016

Published in the DOF on May 6, 2016, Annex 3 published in the DOF on May 9, 2016.

Reason for repeal

It is repealed because the content has been replicated in Article 138 of the Regulations of the Income Tax Law, published in the DOF on October 8, 2015.

14/ISR/NV

Universal civil societies. Income in concept of alimony.

Article 93, fraction XXVI of the Income Tax Law establishes that ISR will not be paid on income received in concept of alimony by natural persons who have the status of "alimony creditors" under the applicable civil legislation.

Invariably, to have said status, civil legislation requires another natural person who has the quality of "alimony debtor" and a legal relationship between this and the "alimony creditor".

In this sense, a universal civil society - both of all present goods and of all gains - can never have the status of "alimony debtor" nor a natural person the status of "alimony creditor" of said society.

Furthermore, the obligation of a universal civil society to incur expenses necessary for the alimony of partners does not grant them the status of "alimony creditors" of said society, since the referred obligation does not have the characteristics of an alimony obligation, that is, it is not reciprocal, irrenounceable, intransmissible, and intransigible.

For the above, it is considered that an improper tax practice is carried out by:

I.

Whoever, to omit total or partial payment of any contribution, or to obtain a benefit to the detriment of the federal treasury, constitutes or contracts directly or through an intermediary a universal civil society, in order for it to provide services identical, similar, or analogous to those that its workers or service providers provided or provide.

II.

The partner of a universal civil society who considers the amounts received from said society as income for which they are not obligated to pay ISR.

III.

Whoever advises, counsels, provides services, or participates in the realization or implementation of any of the previous practices.

This criterion is also applicable to societies in collective name or in simple commandite.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2010

Published in the DOF on December 3, 2010, Annex 3, published on December 7, 2010, with non-binding criterion number 19/ISR.

Repeal

First Resolution of Modifications to the RMF for 2019

Published in the DOF on August 20, 2019, Annex 3 published in the DOF on August 21, 2019.

Reason for repeal

It is repealed because the legal and factual conditions that motivated its creation have changed.

19/ISR/NV

Deduction of frozen inventories.

Taxpayers who, in the determination of the accumulative inventory, in accordance with fraction V of the Third Transitory Article for 2005, had decreased the value of pending deductable inventories from the years 1986 or 1988, under the terms of fractions II and III of the Sixth Transitory Article of the Decree that Reforms, Adds, and Repeals Various Provisions of the Income Tax Law, published in the DOF on December 31, 1988, and of rule 106 of the Resolution that establishes general rules and other tax provisions published in the DOF on May 19, 1993, may not consider them as an authorized deduction for purposes of determining the ISR base from the year 2005 up to the amount they had applied in the calculation of said accumulative inventory.

Therefore, it is considered that an improper tax practice is carried out when, to determine the ISR base from the year 2005, the value of pending deductable inventories from the years 1986 or 1988 is deducted, when they have already been decreased for the determination of accumulative inventory in accordance with fraction V of the Third Transitory Article for 2005.

Origin

First antecedent

Fourteenth Resolution of Modifications to the RMF for 2006

Published in the DOF on March 28, 2007, Annex 26, published on the same date as the Modification, with non-binding criterion number 14/ISR.

Repeal

RMF for 2017

Published in the DOF on December 23, 2016, Annex 3 published in the DOF on December 27, 2016.

Reason for repeal

It is repealed because the content of the criterion has already fulfilled its objective in accordance with Article 3, fractions IV and V of the Transitory Provisions of the LISR of 2005, in which the treatment is established for taxpayers to determine the base inventory until the year 2016.

20/ISR/NV

Negative Inventories.

In the case where the taxpayer obtains a negative amount in the calculation of the adjustment to the amounts that must be accumulated in the exercise for the concept of accumulative inventory, in the event that the inventory at the close of the year 2005 had decreased with respect to the base inventory, it is considered an improper tax practice to decrease the accumulative income of the exercise with the resulting negative amounts, since it is an accumulative inventory and not an authorized deduction.

This same criterion will be applicable in the case of decreases in inventories in subsequent exercises.

Origin

First antecedent

Fourteenth Resolution of Modifications to the RMF for 2006

Published in the DOF on March 28, 2007, Annex 26, published on the same date as the Modification, with non-binding criterion number 15/ISR.

Repeal

RMF for 2017

Published in the DOF on December 23, 2016, Annex 3 published in the DOF on December 27, 2016.

Reason for repeal

It is repealed because the content of the criterion has already fulfilled its objective in accordance with Article 3, fractions IV and V of the Transitory Provisions of the LISR of 2005, in which the treatment is established for taxpayers to determine the base inventory until the year 2016.

21/ISR/NV

Free provision of a service to civil organizations and trusts authorized to receive deductible donations.

Article 27, fraction I of the Income Tax Law establishes as a requirement for a donation to be deductible that it is not onerous nor remunerative, that it satisfies the requirements provided in said Law and in the general rules established for this effect by the SAT; likewise, fraction VIII of the aforementioned article mentions that donations will be deductible when, in the exercise in question, they have been effectively expended, that is, when they have been paid in cash, through electronic fund transfers from accounts opened in the name of the taxpayer in institutions that make up the financial system and the entities that the Bank of Mexico authorizes for such effect, or in other goods that are not credit titles. In this context, Article 130 of the Regulations of the Income Tax Law establishes that the donation of services will not be deductible, while the diverse Article 2332 of the CCF of supplementary application, provides that donation is a contract by which a person transfers to another, gratuitously, a part or all of their present goods.

For the above, it is considered that an improper tax practice is carried out by natural or moral persons who consider as a deductible donation for ISR purposes, the free provision of a service to a civil organization or trust that has authorization to receive deductible donations, regardless of whether they have a receipt that intends to support that operation. By way of example but not limitative, the free provision of guidelines regarding the obligation to project certain information (images and sound) for a certain period of time by natural or moral persons dedicated to all kinds of services related to the film exhibition industry, operating exhibition halls, cinemas, auditoriums, and any other activity related to the mentioned industry, as well as the free provision of services provided through one or more public telecommunications networks, by transmission means, such as channels or circuits, that use frequency bands of the radioelectric spectrum, satellite links, wired, electrical transmission radios, or any other means of transmission, as well as, in their case, central stations, switching devices, or any necessary equipment in accordance with what is established in the Federal Telecommunications Law, among others.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2013

Published in the DOF on May 31, 2013, Annex 3, published on the same date as the Modification, with non-binding criterion number 29/ISR.

Repeal

RMF for 2017

Published in the DOF on December 23, 2016, Annex 3 published in the DOF on December 27, 2016.

Reason for repeal

It is repealed because the content of the criterion has been replicated in Article 130 of the RLISR, published in the DOF on October 8, 2015.

25/ISR/NV

Expenses made for commercial activities contracted to a Union.

Article 378 of the Federal Labor Law states that unions are prohibited from exercising the profession of merchants with profit motive.

Article 3o., fraction I of the Commercial Code states that persons who, having legal capacity to exercise commerce, make it their ordinary occupation are reputed merchants in law; and Article 75 of said legal order lists those considered acts of commerce.

In this sense, unions, which fulfill their tax obligations in accordance with Title III of the Income Tax Law, do not have the legal capacity to exercise commerce.

For the above, it is considered an improper tax practice:

I.

To deduct for ISR purposes, with the fiscal receipt issued by a Union, derived from the contracting made to it, product of any commercial activity they carry out.

II.

To credit, for IVA purposes, the tax contained in the fiscal receipt referred to in the previous fraction.

III.

To advise, counsel, provide services, or participate in the realization or implementation of any of the previous practices.

The aforementioned in the previous fractions does not result applicable when the union, for the acts of commerce it carries out, fulfills its tax obligations in terms of Article 80, sixth paragraph of the Income Tax Law.

Origin

First antecedent

Fifth Resolution of Modifications to the RMF for 2014

Published in the DOF on October 16, 2014, Annex 3, published on October 17, 2014.

Repeal

Fourth Resolution of Modifications to the RMF for 2018

Published in the DOF on November 30, 2018, Annex 3, published on the same November 30, 2018.

Reason for repeal

It is repealed because the legal and factual conditions for which it was created have changed.

II.

Criterion of the Law of General Taxes on Imports and Exports

1/LIGIE/NV

General Rule 2 a). Import of unassembled merchandise.

Improper tax practices have been detected derived from the non-observance of General Rule 2 a), contained in Article 2o., fraction I of the Law of General Taxes on Imports and Exports. This is because the import of disassembled or unassembled merchandise has led various assembly companies to evade the payment of contributions, the fulfillment of non-tariff regulations and restrictions, and even official standards, as well as the improper obtaining of tariff benefits derived from Free Trade Agreements and Commercial Agreements of which Mexico is a part.

In this vein and in order to avoid such practices, it is necessary to point out that for the purposes of General Rule 2 a), contained in Article 2o., fraction I of the Law of General Taxes on Imports and Exports, the merchandise imported into national territory disassembled, even when it is not totally complete but already presents the essential characteristics of a complete or finished article, is classified in the tariff fraction that corresponds to the article, product, machinery, or equipment, "complete or finished". Therefore, it is improper to classify individually the elements that constitute said merchandise.

By way of example, the following are cited:

I.

Television receiver apparatus whose components are imported separately (flat screen assemblies, circuit or modular circuits), even at different times and/or by different customs, are considered for the purposes of the General Import Tax, in the tariff classification that corresponds to the finished apparatus.

II.

Incomplete or unfinished television receiver apparatus, that present interconnected various modular circuits and electrical harnesses, including flat screen assemblies, are considered for the purposes of the General Import Tax, in the tariff classification that corresponds to the finished apparatus.

The above is applicable to foreign trade operations regardless of the customs regime to which the merchandise is destined, in one or several acts.

Origin

First antecedent

Fifth Resolution of Modifications to the RMF for 2014.

Published in the DOF on October 16, 2014, Annex 3, published on October 17, 2014.

Reason for Relocation

It is relocated in the RGCE for 2017 published in the DOF on January 27, 2017, Annex 5 published in the DOF on February 9, 2017, in virtue of the content being matter of Foreign Trade and Customs.

Sincerely.

Mexico City, December 15, 2023. - In substitution for the absence of the Head of the Tax Administration Service, based on Article 4, first paragraph of the Internal Regulations of the Tax Administration Service, the General Legal Administrator, Lic. Ricardo Carrasco Varona signs. -

Rubric.

ANNEX 7 OF THE 2024 FISCAL MISCELLANEOUS RESOLUTION

Compilation of normative tax criteria

For the purposes of Articles 33, penultimate paragraph, and 35 of the CFF, in relation to rule 1.9., fraction VI, the normative criteria in the matter of internal taxes are made known, as follows:

Content

A.

Current:

I.

Criteria of the CFF

1/CFF/N

Tax credit. It is firm when the legal terms for its challenge have elapsed, there is a withdrawal of the challenge, or its resolution no longer admits any means of defense.

2/CFF/N

Substantive norms. Those applicable to determine fiscal loss have this characteristic.

3/CFF/N

Generally accepted accounting principles and financial information norms. Their application.

4/CFF/N

Moment in which the merger takes place, for purposes of presenting the cancellation notice in the RFC by merger of societies.

5/CFF/N

Royalties for the use or temporary enjoyment of copyright on literary, artistic, or scientific works. Payments made by virtue of any legal act that has as its object the distribution of a work have this character.

6/CFF/N

Sport fishing. The tourist services provided by vessels are considered commercial activities.

7/CFF/N

Application of amounts paid in refunds in amounts less than the requested amount.

8/CFF/N

Coercive measures. It is necessary to exhaust them in strict order, before proceeding criminally for the crimes of disobedience or resistance to an authority mandate.

9/CFF/N

Home visits to verify compliance with tax obligations. It is not required that partial minutes and final minutes be drawn up.

10/CFF/N

Tax discrepancy. The result of the verification will be made known through an official letter and, if applicable, in the last partial or complementary minute.

11/CFF/N

Guarantee of fiscal interest. Institutions that make up the Mexican Banking System are exempt from granting it.

12/CFF/N

Suspension of the statute of limitations term when means of defense are asserted.

13/CFF/N

Expiration of the tax authority's powers. The suspension of the term due to the filing of an administrative appeal or lawsuit must be considered independent of the ten-year term.

14/CFF/N

Infringements. Application of the fines established in the CFF.

15/CFF/N

A declaration of plain nullity or the revocation of the corresponding resolution does not disprove spontaneous compliance.

16/CFF/N

Imposition of fines. Determination of the applicable fine for the omission in the payment of various contributions and in the presentation of declarations.

17/CFF/N

Infringement scenarios related to the obligation to present the corresponding information on the payment, withholding, credit, and transfer of IVA in operations with suppliers.

18/CFF/N

Administrative remedies. Multiple payment form, invitation or summons letters. They are not resolutions that affect the legal interest of taxpayers.

19/CFF/N

Removal of the depositary. The revocation appeal is inadmissible.

20/CFF/N

Notification by certified mail. For its validity, the provisions of the Mexican Postal Service Law must be followed.

21/CFF/N

Notification in accordance with Article 134, fraction I of the CFF. It establishes three alternative means.

22/CFF/N

Seizure in the administrative route. It is not necessary to seize the asset again.

23/CFF/N

Suspension of the statute of limitations period derived from the filing of an administrative appeal or lawsuit.

24/CFF/N

Withheld contributions. When the withholding agent does not make the payment and assumes the debt or pays it, they may obtain the legal benefits specific to taxpayers.

25/CFF/N

Undue refunds, since they originate from a contribution, retain the legal nature of said contribution.

26/CFF/N

Definitions of credit balance and payment of undue amounts.

27/CFF/N

Conclusive Agreement. Concept of the qualification of facts or omissions.

II.

Criteria of the Income Tax Law

1/ISR/N

Permanent establishment. The examples that may be considered constitutive of a permanent establishment must be analyzed in accordance with the essential characteristics of said concept.

2/ISR/N

Benefits of treaties to avoid double taxation. Compliance with the procedural provisions for their application is necessary.

3/ISR/N

Benefits of the treaty to avoid double taxation between Mexico and Barbados. Interpretation of the texts in Spanish and English.

4/ISR/N

Order in which the credit for ISR paid abroad will be made.

5/ISR/N

Credit for ISR paid abroad. Taxpayers may only credit the excess when the mutual agreement procedure concludes with an agreement and they accept it.

6/ISR/N

Refund of amounts made by the tax authority. If interest is paid, it must be accumulated for ISR purposes.

7/ISR/N

Gain from the alienation of fiduciary securities, placed among the general investing public. Interest must be considered.

8/ISR/N

ISR on dividends or profits. Cases in which legal entities should not calculate the tax on amounts considered as distributed dividends or profits.

9/ISR/N

ISR on dividends or profits. Order in which the credit will be made.

10/ISR/N

ISR exercise declaration. The trustee is not obligated to file it for activities carried out through a trust.

11/ISR/N

Determination of the additional profit-sharing distribution to workers of companies. Tax authorities are not obligated to verify the existence of any labor relationship.

12/ISR/N

Taxable income from the provision of voucher or electronic wallet issuance services.

13/ISR/N

Authorization to alienate shares at fiscal cost. The condition for granting it is not met regarding those that do not have an average cost per share.

14/ISR/N

Beverage bottles. Cases in which they must be considered fixed assets or merchandise.

15/ISR/N

Deduction of losses due to fortuitous event or force majeure.

16/ISR/N

Accrued interest. The condition in which the deductibility requirement is credited.

17/ISR/N

Acts or operations prohibited by the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin. The commission of said acts or operations implies the non-deductibility of expenditures related to them.

18/ISR/N

Legal entities that concentrate their treasury transactions. Exception to the deductibility requirement provided for the source of the VAT credit.

19/ISR/N

Losses from uncollectible credits. Notorious practical impossibility of collection.

20/ISR/N

Interest is not considered amounts paid on behalf of third parties for ISR purposes.

21/ISR/N

Gifts to public officials. They are not deductible for ISR purposes.

22/ISR/N

Commercial credit. The premium paid by the taxpayer for the acquisition of a good is not deductible.

23/ISR/N

Thin capitalization. The exchange loss, accrued due to the fluctuation of foreign currency, which derives from the amount of debts exceeding three times the capital of the taxpayers and comes from debts contracted with related parties abroad, is not deductible.

24/ISR/N

ISR deductions. Vehicles designated as pickup trucks are cargo trucks.

25/ISR/N

Calculation of the annual inflation adjustment. Creditable VAT should not be considered.

26/ISR/N

Financial operations derived from capital referenced to the exchange rate of a currency. The fact that they are provided for in a provision regulating the non-withholding of interest payments does not alter their nature.

27/ISR/N

Update of fiscal losses. Applicable factor.

28/ISR/N

Increase in fiscal loss in supplementary declarations.

29/ISR/N

Consumer cooperative societies. They are not obligated to pay ISR when they alienate goods other than their fixed assets.

30/ISR/N

Educational institutions. They must have official validity recognition of studies to obtain authorization to receive deductible donations and be considered non-profit legal entities.

31/ISR/N

Educational institutions authorized to receive deductible donations. Enrollment fees and tuition paid by their students are considered recovery fees.

32/ISR/N

Prizes for attendance and punctuality. They are not benefits of a nature analogous to social security.

33/ISR/N

Social Security. Compliance with the generality requirement.

34/ISR/N

Income from the alienation of real estate intended for a primary residence.

35/ISR/N

Tips. They constitute income for the worker.

36/ISR/N

Employment subsidy. It is feasible to recover the uncredited remainder via refund.

37/ISR/N

Shares issued by foreign societies listed on stock exchanges. Their alienation is subject to a 10% rate.

38/ISR/N

Distributed dividends or profits. Accumulation to other income by individuals.

39/ISR/N

Distributed dividends or profits paid by a society. Accumulation to other income of individuals.

40/ISR/N

Distributed dividends or profits. Moment of accumulation of income of individuals.

41/ISR/N

Refund of credit balances to individuals. Credit for ISR paid by the person who distributed the dividends.

42/ISR/N

Loans to partners and shareholders. They are considered dividends.

43/ISR/N

Distribution of dividends. Amount of the ISR credit that individuals have the right to apply in the exercise declaration when they receive dividends from a legal entity dedicated exclusively to agricultural, livestock, fishing, or forestry activities.

44/ISR/N

Individuals. Income received from tax incentives is considered received at the moment the patrimony increases.

45/ISR/N

Financial derivative operations in which differences are settled during their validity. It is considered that there is a maturity at each settlement regarding the amount of the settled difference.

46/ISR/N

Deductible from medical expense insurance. It is not a personal deduction.

47/ISR/N

Income from fees and generally from the provision of a professional service, for the purposes of Title V of the Income Tax Law.

48/ISR/N

Maquiladora operation for the purposes of the Income Tax Law. Scope of the concept of transformation.

49/ISR/N

Maquiladora operation for the purposes of the Income Tax Law. Merchandise with which the transformation or repair processes must be carried out.

50/ISR/N

Maquiladora operation for the purposes of the IMMEX Decree. Percentage of machinery and equipment used.

51/ISR/N

Update. It is not considered taxable income for ISR calculation purposes.

52/ISR/ IETU/N

Credit of ISR against IETU at the taxpayer's request, when there are determining resolutions.

53/ISR/N

Moment when a dividend or profit distributed through the delivery of shares of the same legal entity is considered received for the purposes of accumulation to other income of individuals and the application of the additional 10% tax.

54/ISR/N

Packaging gas. The gas used in natural gas transportation services has the nature of a fixed asset.

55/ISR/N

Business benefits for the purposes of treaties to avoid double taxation and their relationship with Article 175, fraction VI of the Income Tax Law.

56/ISR/N

Authorization. Requirements to be an authorized donee.

57/ISR/N

Donations granted by Authorized Donees to foreign organizations.

58/ISR/N

Benefits of the treaty to avoid double taxation between Mexico and Qatar. Interpretation of the texts in Spanish and English.

III.

Criteria of the VAT Law

1/IVA/N

The consideration paid with shares or partnership interests for in-kind contributions to commercial societies is considered effectively collected upon delivery of the same.

2/IVA/N

Indemnification for unpaid check. The amount thereof is not subject to VAT.

3/IVA/N

VAT withholdings. They do not apply to services provided as a business activity.

4/IVA/N

Courier and package services. They are not subject to VAT withholding.

5/IVA/N

Transfer of debts. Moment when the consideration is considered effectively collected and the tax paid.

6/IVA/N

Alienation of pollinating beehives.

7/IVA/N

Alienation of fresh skins.

8/IVA/N

Patent medicines.

9/IVA/N

Supply of medicines as part of hospital services. The general VAT rate must be considered.

10/IVA/N

Products intended for human and animal food.

11/IVA/N

Food supplements. They are not considered products intended for food.

12/IVA/N

Concept of milk for VAT purposes.

13/IVA/N

Prepared foods.

14/IVA/N

Prepared foods for consumption at the place of alienation.

15/IVA/N

Alienation of spare parts for agricultural equipment.

16/IVA/N

Equipment integrated into hydroponic greenhouses.

17/IVA/N

Books contained in electronic, tactile, or auditory media. Treatment in VAT matters.

18/IVA/N

Charges between airlines.

19/IVA/N

Provision of services to societies dedicated to agricultural and livestock activities.

20/IVA/N

Provision of services in hydroponic greenhouses. Application of the 0% rate.

21/IVA/N

VAT on imports carried out by the Federation, the States, the Municipalities, as well as their decentralized agencies and public social security institutions.

22/IVA/N

Calculation of the credit proportion when exempt activities are carried out gratuitously.

23/IVA/N

VAT credit balances. The remainder of a credit balance, if the latter was previously credited against a payment subsequent to the declaration in which it was determined, must continue to be credited until exhausted.

24/IVA/N

Reimbursements or in-kind refunds. They constitute alienation.

25/IVA/N

Alienation of stone, sand, and earth. They are not real estate.

26/IVA/N

Alienation of primary residence. The provision establishing that VAT will not be paid does not cover partial services in its construction.

27/IVA/N

Exemption. Commissions for the granting of mortgage credits for housing.

28/IVA/N

Penalty interest.

29/IVA/N

Interest in financing of acts taxed at the 0% rate or exempt.

30/IVA/N

Tips. They do not form part of the VAT taxable base.

31/IVA/N

VAT. Tax base for the provision of voucher and electronic wallet issuance services.

32/IVA/N

VAT. The import of goods taxed at the 0% rate is exempt.

33/IVA/N

Applicable provision to determine gold imports for which VAT will not be paid.

34/IVA/N

Payment and credit of VAT on imports, when the importer's activities are taxed at the 0% rate.

35/IVA/N

0% VAT rate. It is applicable and IEPS will not be paid when national goods are destined to the fiscal deposit regime for exhibition and sale in stores designated as "Duty Free".

36/IVA/N

Insurance. Vehicles of residents abroad that temporarily enter the country.

37/IVA/ IEPS/N

Transferred taxes. When the taxpayer pays them without having made the corresponding charge or collection to the economic subject, they may obtain legal benefits without the exclusions applicable to said taxes.

38/IVA/N

Alienation of salt. Applicable VAT rate.

39/IVA/N

Film rolls or plastic cushioning. They are not herbicides or pesticides.

40/IVA/N

Digital Services. Definition of intermediary services for the purposes of Article 18-B, fraction II of the VAT Law.

IV.

Criteria of the IEPS Law

1/IEPS/N

Subsequent alienations of alcohol or denatured alcohol. Those who carry them out are IEPS taxpayers.

2/IEPS/N

Pesticides. Credit for the acute toxicity hazard category of pesticides.

3/IEPS/N

IEPS taxable base. The exempt customs processing fee should not be considered.

4/IEPS/N

Concept of milk for IEPS purposes.

5/IEPS /N

Dairy products and combined dairy products. They are subject to the IEPS applicable to flavored beverages when sugars are dissolved in water during their manufacturing process.

6/IEPS/N

Food preparations that require an additional process for consumption.

7/IEPS/N

Confectionery and ice cream products whose ingredient is chewing gum or gum base.

8/IEPS/N

Edible-grade gelatin or gelatin. Its alienation or import is subject to the payment of IEPS when it contains sugars or other sweeteners with a caloric density of 275 kilocalories or greater per 100 grams.

9/IEPS/N

Credit balance derived from the calculation of IEPS in accordance with Article 2, fraction I, subsections D) and H) of the IEPS Law. It can only be offset against the tax established in the same article, fraction, and subsections.

V.

Criteria of the LFD

1/LFD/N

Rights. When the certification of files or records is requested, the corresponding right must be paid for each letter or folio size sheet.

2/LFD/N

Rights for use or enjoyment of federal real estate. Cases in which the exemption does not apply.

VI.

Criteria of the LISH

1/LISH/N

Refunds, discounts, and bonuses from periods prior to January 1, 2015. They are not applicable to the rights provided in title three of the LISH for assignees.

2/LISH/N

Deduction percentages for contractors and assignees. Their application does not constitute an option.

3/LISH/N

Deduction percentages for contractors and assignees. They are not applicable to other types of taxpayers.

4/LISH/N

Expenditures necessary for the exploration, extraction, transportation, or delivery of hydrocarbons. They constitute deductible costs and expenses for the determination of the right to shared profit.

5/LISH/N

Hydrocarbon exploration right. Deductibility for the determination of the base for the right to shared profit.

6/LISH/N

Thin capitalization. Its exception is only applicable to the assignees and contractors referred to in the Hydrocarbons Law.

7/LISH/N

Permanent establishment for the purposes of the activities referred to in the Hydrocarbons Law.

8/LISH/N

Accounting operations register of assignees and contractors. The national or registration currency must be used.

9/LISH/N

Alienation of fixed assets used in petroleum activities. Fiscal treatment in ISR matters.

10/LISH/N

Transmission to the State of assets generated or acquired under the Exploration and Extraction Contracts. Fiscal treatment in ISR matters.

11/LISH/N

Contributions to investment trusts to fund abandonment operations in the contractual area. The amount equivalent to the interest that is decreased to calculate the quarterly contributions constitutes taxable income for the contractor.

12/LISH/N

Abandonment reserve provision. It is not deductible for ISR purposes.

13/LISH/N

Deduction percentages for contractors and assignees. They are only applicable to investments destined for the activities indicated in them.

B.

Repealed:

I.

Criteria of the CFF

7/CFF/N

Update of contributions, revenues, and compensation of taxpayer credit balances.

9/CFF/N

Resolution of consultations regarding the methodology used in the determination of prices or amounts of considerations, in operations with related parties. Subjects who can formulate them.

II.

Criteria of the Income Tax Law

4/ISR/N

Tax residence. Ways to prove it.

14/ISR/N

Taxable income of persons other than exchange houses dedicated to the purchase and sale of currencies. Only the gain effectively received should be taken into consideration.

15/ISR/N

Authorization to alienate shares at fiscal cost. The issuing society of the shares does not need to be constituted in Mexico.

32/ISR/N

Legal entities that carry out operations with related parties resident in Mexico. Documentation and supporting information they must keep.

33/ISR/N

Legal entities. Concept of related parties.

34/ISR/N

Legal entities that carry out operations with related parties regardless of their tax residence. Compliance with obligations.

35/ISR/N

Legal entities that carry out operations with related parties. Application of the OECD Guidelines.

36/ISR/N

Net fiscal profit of the exercise. In its determination, the workers' participation in the company's profits should not be subtracted from the fiscal result of the exercise.

45/ISR/N

Refund of credit balances. It is not an indispensable requirement the presentation by the worker of the notice to the employer.

57/ISR/N

Simulation of legal acts in operations between related parties. It can be determined for income from wealth source in the country, from any person obligated to pay the tax.

64/ISR/N

Interest paid to residents abroad by multiple-object financial societies in operations between related persons, deriving from loans or other credits.

III.

Criteria of the VAT Law

3/IVA/N

Transfer of tax at an incorrect rate.

25/IVA/N

VAT compensation. Cases in which it proceeds.

30/IVA/N

Insurance agent commissions. The considerations to legal entities that do not have the character of insurance agents are not located in the VAT exemption case.

35/IVA/N

Tax on the import of services provided in national territory by residents abroad. It arises when the service provision occurs.

41/IVA/N

In the alienation of articles placed on board of aircraft. Application of the Convention on Air Transport between the Government of the United Mexican States and the Government of the United States of America and other equivalents.

45/IVA/N

VAT credit regarding taxpayers who obtain income from activities other than those established in Article 1 of the VAT Law.

46/IVA/N

6% VAT withholding referred to in fraction IV of Article 1-A of the VAT Law.

IV.

Criterion of the IEPS Law

3/IEPS/N

All types of gasoline that are imported pay the IEPS, even 100 to 115 octane, used only for special racing sports vehicles.

V.

Criterion of the LIF

1/LIF/N

Previously covered and challenged tax credits.

VI.

Criterion of the LISH

2/LISH/N

Considerations in favor of contractors in contracts for the exploration and extraction of hydrocarbons. Moment of accumulation for ISR purposes.

A.

In Force

I.

Criteria of the CFF

1/CFF/N

Tax credit. It is final when the legal terms for its challenge have elapsed, there is a withdrawal from it, or its resolution no longer admits any means of defense.

In accordance with the effects provided in various articles of the CFF, a tax credit is final when it has been consented to by individuals, by not having been challenged within the legal deadlines for it; when having been challenged, the individuals withdraw from the respective means of defense; or when in the means of defense a resolution is issued that confirms the validity of the challenged act, dismisses or stays the appeal or lawsuit, and this does not admit another means of defense or procedural appeal or, admitting them, they have not been promoted within the legal deadlines.

Origin

First antecedent

2008

Office 600-04-02-2008-75872 of September 1, 2008, through which the approved normative criteria are made known as of August 2008. Office 600- 04-02-2009-73416 of January 7, 2009, through which the Bulletin 2008 is made known, with criterion number normative 1/2008/CFF.

2/CFF/N

Substantive norms. Those applicable for determining the fiscal loss meet this characteristic.

In accordance with Article 6 of the CFF, contributions are determined in accordance with the provisions in force at the time of their accrual.

The provisions that establish the right to a credit or to a fiscal credit form part of the mechanism to determine contributions.

Since the Income Tax Law establishes the faculty to decrease the fiscal loss of the fiscal profit to effect determine the fiscal result, and equally the update the fiscal loss, the provisions related to the calculation of said decreaseable fiscal loss, including its update, are norms that form part of the determination mechanism and the process to integrate the tax base.

Therefore, the decreaseable fiscal loss will be calculated in accordance with the provisions in force at the time the ISR accrues.

Origin

First antecedent

1

Office 325-A-VII-10960 of October 14 1996, through which the criteria approved by the Normativity Committee in its session No. 21, held on October 10, 1996.

3/CFF/N

Generally accepted accounting principles and norms of financial information. Their application.

Articles 58-A, fraction III, second paragraph, subsection b) and 60, second paragraph of the CFF refer to generally accepted accounting principles; articles 28, fraction XXVII, sixth paragraph, 76-A, fraction III, second paragraph, subsection a), numbers 2 and 4; 78, second paragraph; 180, last paragraph and 182, fraction II, first paragraph, numbers 3 and 5 of the Income Tax Law, refer to financial information norms, and articles 28 and 56, second paragraph of the Regulations of the Income Tax Law refer to both.

Article 40, fraction IV of the LISH refers to Mexican financial information norms, likewise Article 182, first paragraph, fraction I, subsection a), third

paragraph, numeral 1, of the Income Tax Law (ISR) alludes to generally accepted accounting principles in the United States of America or to generally accepted international accounting principles.

In the cases referred to in the first paragraph, tax provisions do not distinguish whether the principles or standards are those issued by a national or international body; in this sense, it is sufficient that they are those in force in the place and at the time of their application, and that they are applicable to the taxpayer in question.

In the cases referred to in the second paragraph of this criterion, tax provisions differentiate between Mexican standards; Financial Information Standards (Normas de Información Financiera), United States principles, United States Generally Accepted Accounting Principles, and international principles, International Financial Reporting Standards; therefore, with respect to the legal provisions under analysis, it is necessary to apply those issued by the corresponding body, whether Mexican, Mexican Council of Financial Information Standards, A.C., American, Financial Accounting Standards Board, or international, International Accounting Standards Board, that are in force at the time the contribution must be determined and that are applicable to the taxpayer in question.

Origin

First antecedent

2013

Official Letter 600-04-02-2013-11156 of April 22, 2013, through which the normative criteria approved in the first quarter of 2013 are made known.

Official Letter 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with the normative criterion number 3/2013/CFF.

4/CFF/N

Moment when the merger takes place, for the purposes of filing the cancellation notice in the Taxpayer Registry (RFC) due to the merger of companies.

Article 14-B, fraction I, subsection a) of the Federal Code of Fiscal Procedures (CFF) establishes the obligation to file the notice of merger of companies, and Article 30, fraction XIII of its Regulations states that with the filing of the cancellation notice in the RFC due to the merger of companies, the provisions of the aforementioned Article 14-B shall be deemed fulfilled.

Consequently, for the purposes of filing the cancellation notice in the RFC due to the merger of companies, it is considered that the merger of legal entities takes place on the date the respective agreement is adopted or, if applicable, on the date set forth in the agreement adopted in the ordinary or extraordinary general assembly of shareholders, as this is the supreme body of commercial companies.

The foregoing, based on Articles 11, second paragraph of the CFF; 178, 182, fraction VII, 200, 222 and 223 of the General Law of Commercial Companies (LGSM) and 21, fraction V of the Code of Commerce.

Origin

First antecedent

57/2002/CFF

Official Letter 325-SAT-IV-B-75015 of December 16, 2002.

5/CFF/N

Royalties for the use or temporary enjoyment of copyright on literary, artistic, or scientific works. Payments made pursuant to any legal act whose object is the distribution of a work have this character.

Article 15-B, first paragraph of the CFF establishes that royalties include, among others, payments of any kind for the use or temporary enjoyment of copyright on literary, artistic, or scientific works.

Article 5, second paragraph of the CFF allows the supplementary application of federal common law provisions; in this sense, the concepts referred to in the previous paragraph can be interpreted in accordance with the Federal Copyright Law.

From Article 27 of the cited law, the circumstances through which copyright holders can exploit their property rights over a work are derived, within which is included the power to grant a third party the use or temporary enjoyment of the aforementioned rights.

Fraction IV of the aforementioned last article establishes, as one of the modalities through which the use or temporary enjoyment of copyright can be granted to a third party, the distribution of the work, including the sale or other forms of transmission of ownership of the physical media containing it, as well as any form of transmission of use or exploitation. Likewise, the cited fraction provides that when distribution is carried out through sale, this right of opposition shall be deemed exhausted upon the first sale, except in the case expressly contemplated in Article 104 of the cited law.

In this sense, payments made pursuant to any legal act whose object is the distribution of a work referred to in Article 27, fraction IV of the Federal Copyright Law, have the character of royalties in accordance with Article 15-B, first paragraph of the CFF.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 4/2012/CFF.

6/CFF/N

Sport fishing. Tourist services provided by vessels are considered commercial activities.

Article 16, fraction I of the CFF establishes that commercial activities are those that, in accordance with federal laws, have that character and are not included in the following fractions of the same article.

Article 75, fractions VIII and XV of the Code of Commerce provides that acts of commerce are activities for the transport of people or goods, by land or water, tourism companies, and contracts relating to maritime commerce and inland and foreign navigation.

Article 2, fraction III of the Law of Navigation and Maritime Commerce establishes that maritime commerce is the activity carried out through the commercial and maritime exploitation of vessels with the object of transporting people, goods, or things by water, or to carry out in the aquatic medium activities of exploration, exploitation, or capture of natural resources, construction, or recreation.

Therefore, the services provided to tourists consisting of facilitating elements to carry out recreational activities in the aquatic medium related to sport fishing are a commercial activity, since tourism companies, by concluding contracts relating to maritime commerce and by providing services to carry out recreational activities in the aquatic medium, are considered acts of commerce in accordance with the aforementioned laws.

Origin

First antecedent

5/2002/CFF

Official Letter 325-SAT-A-31676 of May 24, 2002.

7/CFF/N

Application of amounts paid in refunds of amounts less than the requested amount.

Article 22-A of the CFF states that the amount of the refund shall be applied first to interest and, subsequently, to amounts paid unduly; in this virtue, this provision must be understood to refer to the interest that had been generated up to the moment the refund payment is made and not to future interest.

Thus, in the event that tax authorities make a refund in an amount less than requested, the refunded portion shall be applied first to the accrued interest that had been generated, if any, up to the date the partial payment was made and subsequently applied against the principal.

In no case shall the amount of the refund made in an amount less than requested be applied against interest generated after the payment, corresponding to the portion omitted in said refund.

Origin

First antecedent

50/2003/CFF

Official Letter 325-SAT-IV-F-84632 of November 28, 2003, through which the Compilation of Normative Criteria is issued. Criteria are made known.

8/CFF/N

Enforcement measures. It is necessary to exhaust them in strict order before proceeding criminally for the crimes of disobedience or resistance to an authority mandate.

Article 40 of the CFF states that when taxpayers, jointly liable parties, or third parties related to them prevent in any way or by any means the initiation or development of the exercise of the powers of tax authorities, these may apply as enforcement measures those indicated in said article, strictly in the following order:

I.

Request the assistance of the public force;

II.

Impose the corresponding fine in accordance with the Code;

III.

Carry out the precautionary seizure of the assets or of the business of the taxpayer or jointly liable party, regarding the acts, information requests, or documentation requirements directed at them, in accordance with what is established in Article 40-A of the CFF.

IV.

Request the competent authority to proceed for disobedience or resistance on the part of the taxpayer, jointly liable party, or third party related to them, to a legitimate mandate of the competent authority.

Enforcement measures shall not be applied when taxpayers, jointly liable parties, or third parties related to them, manifest in writing to the authority that they are prevented from fully or partially attending to the request due to force majeure or fortuitous event and they prove it by exhibiting the corresponding evidence.

The tax authority may proceed criminally for the crime of disobedience or resistance, provided for in Article 178 of the Federal Penal Code, when the enforcement measures referred to in Article 183 of the aforementioned Federal Penal Code have been exhausted.

In this sense, if the CFF provides enforcement measures to sanction disobedience or resistance to a tax authority mandate, it is a requirement to proceed criminally that the means of enforcement established in Article 40, fractions I, II, and III of the CFF have been exhausted previously.

For the crime of resistance provided for in Article 180 of the Federal Penal Code, it is not necessary to exhaust previously the enforcement measures contained in Article 40 of the CFF, in virtue of the fact that the penal type does not require such a situation, so one may proceed criminally for this crime, at any time when resistance by the individual to the fulfillment of a legitimate mandate executed in a legal manner is observed during the exercise of verification powers.

Origin

First antecedent

4/2002/CFF

Official Letter 325-SAT-A-31676 of May 24, 2002.

9/CFF/N

Home visits to verify compliance with tax obligations. It is not required that partial acts and a final act be drawn up.

Article 42, fraction V of the CFF states that tax authorities, in order to verify that taxpayers, jointly liable parties, or third parties related to them have complied with tax and customs provisions, are empowered to conduct home visits to taxpayers, in order to verify compliance with tax obligations regarding the issuance of CFDI (electronic invoices) and the presentation of requests or notices in matters of the RFC; those relative to the operation of machines, systems, and electronic records that taxpayers are obliged to keep, carried out in accordance with tax provisions; those consisting of ensuring that packages or containers containing alcoholic beverages have labels or seals, or in their case, that the containers containing said beverages have been destroyed; those relative to cigarette packs for sale in Mexico containing the printed security code, or in their case, that it is authentic; those of having the documentation or receipts that prove the legal ownership, possession, stay, custody, or importation of foreign goods, which must be exhibited to the authority during the visit, and those inherent and derived from authorizations, concessions, registers, or patents established in the Customs Law, its Regulations, and the General Rules for Foreign Trade (RGCE) issued by the SAT.

Article 49, fraction IV of the cited order provides that in every home visit, an act or acts shall be drawn up in which the facts or omissions known to the visitors or, in their case, the irregularities detected during the inspection are recorded in detail, without expressly mentioning that partial acts and a final act must be drawn up.

Therefore, home visits carried out in terms of Article 42, fraction V of the CFF shall have full validity whenever an act or acts detailing the facts are drawn up that meet the requirements of Article 49 of said Code, since the aforementioned numeral does not oblige the authority to draw up partial acts and a final act and, therefore, it is sufficient to record the facts in an act or acts.

Origin

First antecedent

43/2003/CFF

Official Letter 325-SAT-IV-B-56119 of October 15, 2003, through which the Compilation of Normative Criteria is issued. Criteria are made known.

10/CFF/N

Fiscal discrepancy. The result of the verification shall be made known through an official letter and, if applicable, in the last partial or complementary act.

In accordance with Articles 46, fraction IV and 48, fraction IV of the CFF, as a result of the exercise of verification powers, the facts or omissions that entail non-compliance with tax obligations shall be recorded, as the case may be, in the last partial act or in the observations letter.

Article 91, in its first and seventh paragraphs, fractions I and II of the Income Tax Law (ISR), establishes that natural persons may be subject to fiscal discrepancy when it is verified that the amount of expenditures in a calendar year is higher than the income declared by the taxpayer, or than that which should have been declared, for which tax authorities will proceed to notify by official letter the amount of the detected expenditures, the information used to know them, the means by which it was obtained, and the resulting discrepancy, as well as the deadline provided for in fraction II of the legal provision in question, to inform in writing to the tax authority the origin or source of the resources with which the detected expenditures were made, and will offer, if applicable, the evidence deemed suitable to prove that the resources do not constitute taxable income in the terms established by the Law itself.

Likewise, in terms of the aforementioned provisions, tax authorities may, on one occasion, request additional information and documentation from the taxpayer, which must be provided within the deadline provided for in Article 53, subsection c) of the CFF.

From the harmonious interpretation of the aforementioned legal provisions, it is derived that regardless of the official letter delivered in terms of the second paragraph of this criterion, when tax authorities have detected omissions in a home visit, a partial act must be drawn up where the delivery of said document is recorded.

In this sense, the delivery of the official letter referred to in Article 91 of the ISR Law is independent of the drawing up of the last partial act or the observations letter, documents in which the delivery of the aforementioned official letter must be recorded.

Origin

First antecedent

20/2001/CFF

Official Letter 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

11/CFF/N

Fiscal interest guarantee. Institutions that make up the Mexican Banking System are exempt from granting it.

Article 65 of the CFF establishes that omitted contributions determined by tax authorities as a consequence of the exercise of their verification powers, as well as other tax credits, must be paid or guaranteed, along with their accessories, within thirty days following the one in which its notification takes effect.

Article 141 of the same Code indicates the ways in which taxpayers can guarantee the fiscal interest and provides that tax authorities may in no case dispense with the granting of the fiscal interest guarantee; likewise, Article 142 of the cited legal order refers to the cases in which it is appropriate to guarantee the fiscal interest.

From the analysis of Articles 65, 141, and 142 of the CFF, the general rule is derived regarding that all tax credits due in favor of the federal treasury, pending payment by obligated taxpayers, must be guaranteed, and that in no case may tax authorities dispense with the granting of the fiscal interest guarantee, which is only applicable to subjects who are legally obliged to provide guarantees, not to those subjects who by express legal provision have been relieved of this obligation.

Article 86 of the Law of Credit Institutions provides that while members of the Mexican Banking System are not in liquidation or bankruptcy proceedings, they shall be considered to have proven solvency and shall not be obliged to constitute deposits or legal bonds, even when seeking the suspension of the acts claimed in amparo trials or to guarantee the fiscal interest in the respective procedures. Likewise, Article 3 of the aforementioned law states that the Mexican Banking System is composed of the Bank of Mexico, multiple and development banking institutions, as well as public trusts constituted by the Federal Government for economic promotion that carry out financial activities and self-regulatory banking bodies.

Therefore, the institutions that are part of the Mexican Banking System referred to in the Law of Credit Institutions are relieved of the obligation to grant the fiscal interest guarantee.

Origin

First antecedent

2010

Official Letter 600-04-02-2010-70388 of December 14, 2010, through which the normative criteria approved in the second half of 2010 are made known.

Official Letter 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with the normative criterion number 25/2010/CFF.

12/CFF/N

Suspension of the limitation period when means of defense are asserted.

In accordance with Article 67 of the CFF, the period for the expiration of the verification powers of tax authorities is suspended when any means of defense is asserted, regardless of the outcome of the resolution issued by tax authorities or the jurisdictional body.

Therefore, in the case indicated in the previous paragraph, if the tax authority determines to exercise verification powers again, it must verify that said powers have not expired and compute the five-year period established in the aforementioned numeral, excluding the time of suspension generated by the filing of the respective appeal or lawsuit.

Origin

First antecedent

9/2002/CFF

Official Letter 325-SAT-A-31676 of May 24, 2002.

13/CFF/N

Expiration of the tax authority's powers. The suspension of the period due to the filing of an administrative appeal or lawsuit must be considered independent of the ten-year period.

Article 67, sixth paragraph of the CFF specifies that the expiration period that is suspended due to the exercise of verification powers, added to the period during which said expiration is not suspended, may not exceed ten years.

In this virtue, this suspension only applies regarding the exercise of verification powers by the authority, which begins with the notification of its exercise and concludes when the final resolution is notified by the tax authority; therefore, the ten-year period referred to in Article 67 of said Code must be computed by adding the period during which expiration is not suspended to the suspension period.

Consequently, the suspension of the expiration period due to the filing of an administrative appeal or lawsuit must be considered independent of the ten years referred to in Article 67, penultimate paragraph of the cited Code.

Origin

First antecedent

2/2005/CFF

Official Letter 325-SAT-09-IV-B-118532 of September 19, 2005, through which the Compilation of Normative Criteria is issued. Release of the first part of Bulletin 2005.

14/CFF/N

Infringements. Application of fines established in the CFF.

Article 70, penultimate paragraph of the CFF provides that when the fine applicable to the same infringing conduct is subsequently modified by reform to the legal provision containing it, tax authorities will apply the lesser fine between the one existing at the time the infringement was committed and the fine in force at the time of its imposition.

Article 6, first paragraph of the aforementioned Code establishes that contributions are incurred as the legal or factual situations provided for in the tax laws in force during the period in which they occur are realized.

From the strict interpretation of both tax provisions, the application of the fines that said Code provides must be according to the legal provision in force in the fiscal year in which the legal or factual situations being sanctioned are realized, regardless of whether they are imposed subsequently.

However, the benefit referred to in Article 70, penultimate paragraph of the aforementioned Code, must be understood to mean that it only proceeds in accordance with the law in force, and it is not possible for the authority, based on this legal provision, to modify the sanction after it has been notified to the infringer, if the legal provision establishing a lesser sanction is subsequently reformed.

In the event that a reform to tax legislation has completely suppressed any infringement, tax authorities will not apply the corresponding fines for said repealed infringements when issuing their resolution, since according to the provision in question, the lesser fine between the one existing at the time the infringement was committed and the one in force at the time of its imposition will be applied, and in the case indicated, since the infringement has been suppressed, there is no sanction in force to apply.

Origin

First antecedent

110/2001/CFF

Official Letter 325-SAT-A-31373 of December 12, 2001. Compilation of Normative Criteria. Criteria are made known.

15/CFF/N

A declaration of absolute nullity or the revocation of the corresponding resolution does not disprove spontaneous compliance.

Article 73, fraction II of the CFF establishes that the fulfillment of tax obligations is not considered to have been done spontaneously when the omission has been corrected by the taxpayer after the

tax authorities had notified a home visit order, or there had been a requirement or any other action notified by them, aimed at verifying compliance with tax provisions.

The home visit order, the requirement, or any action aimed at verifying compliance with tax obligations, may become ineffective as a result of a resolution issued by the competent authority when resolving an administrative appeal, or by reason of a judgment issued by the competent Court, and subsequently the taxpayer may comply with the omitted obligation, provided that the authority has not notified a new visit order, requirement, or carried out action aimed at verifying the taxpayer's compliance with tax obligations.

Consequently, the imposition of fines will not proceed, as compliance is considered to have been done spontaneously, with respect to the act or resolution declared null; however, in the event that the legality of the home visit order, the requirement, or the authority's action aimed at verifying compliance with tax obligations is recognized in the administrative appeal or lawsuit, the subsequent imposition of the fine is indeed appropriate.

Origin

First antecedent

113/2001/CFF

Office 325-SAT-A-31373 of December 12, 2001 Compilation of Normative Criteria. Criteria are made known.

16/CFF/N

Imposition of fines. Determination of the applicable fine for the omission in the payment of various contributions and in the filing of declarations.

Article 75, first paragraph of the CFF establishes that the authorities, when applying fines for infringement of tax provisions, including those related to contributions to foreign trade, must substantiate and motivate their resolution; on the other hand, in its section VI, it states that they must take into consideration that when a single act or omission infringes various formal tax provisions to which several fines correspond, only the one corresponding to the infringement whose fine is greater shall be applied.

Likewise, the second paragraph of the aforementioned section provides that when a single act or omission infringes various tax provisions that establish formal obligations and the payment of contributions is omitted in whole or in part, to which several fines correspond, only the one corresponding to the infringement whose fine is greater shall be applied.

This is regardless of whether the corresponding fines are contained in different legal instruments.

On the other hand, it must be interpreted that the last paragraph of section VI of the aforementioned article contemplates that, regarding the filing of declarations, notices, or corresponding customs documentation, when the same official form must be filed for different contributions and it is omitted for any of them, including when there is a total absence of documentation, a fine shall be applied for each undeclared contribution or unfulfilled obligation.

In this order of ideas, considering the nature of the obligation, not making a payment implies the commission of an infringement, such that with the omission of various payments, several infractions are incurred.

Consequently, not properly making the payments of a contribution or of various contributions, even though they are presented through the same format, declaration, or corresponding customs documentation, represents a multiplicity of unfulfilled obligations and the commission of an infringement for each payment not made, so Article 75, section VI, first paragraph cited is not applicable.

Nevertheless, if in addition to infringing provisions of a formal nature, the payment of contributions is omitted in whole or in part, what is stated in Article 75, section VI, second paragraph of the CFF will be followed to apply the greater fine.

Origin

First antecedent

37/2004/CFF

Office 325-SAT-IV-B-91597 of August 31, 2004, through which the release of the first part of Bulletin 2004 is issued.

17/CFF/N

Scenarios of infringement related to the obligation to present information corresponding to the payment, withholding, crediting, and transfer of VAT in operations with suppliers.

Article 81, section XXVI of the CFF establishes that infringements related to the obligation to file declarations are the failure to provide the information referred to in Article 32, section VIII of the VAT Law through the means, electronic formats, and deadlines established in said law, or to present the information incomplete or with errors.

From Article 32, section VIII of the VAT Law, the following infringing behaviors are derived:

I.

Not providing the information through the corresponding electronic means and formats;

II.

Not presenting the information within the deadlines established in said instrument;

III.

Presenting the information incomplete or with errors; and,

Consequently, when taxpayers incur in any of the behaviors indicated in the previous sections, the infringement established in Article 81, section XXVI of the aforementioned Code is considered committed, without it being necessary for all the mentioned behaviors to be updated.

On the other hand, Article 81, section I of the CFF provides as an infringing behavior, among others, failing to comply with the requirements of tax authorities to present the declarations, requests, notices, or certificates that tax provisions require.

Therefore, it is considered that the failure to comply with an authority's requirement for the presentation of the information provided for in Article 32, section VIII of the VAT Law constitutes a behavior different from those indicated in Article 81, section XXVI of the cited Code, which warrants an independent sanction.

Origin

First antecedent

2010

Office 600-04-02-2010-70388 of December 14, 2010, through which the normative criteria approved in the second half of 2010 are made known.

Office 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with the normative criterion number 33/2010/CFF.

18/CFF/N

Administrative appeals. Multiple payment forms, invitation letters, or summons. They are not resolutions that affect the legal interest of taxpayers.

Article 117, section I, subsection d) of the CFF establishes that the appeal for revocation proceeds, among other scenarios, against definitive resolutions issued by tax authorities that cause harm to the individual in tax matters.

Multiple payment forms, invitation letters, and summons are not resolutions that fall within the scenarios for the proceeding of the appeal for revocation established in the aforementioned article, as they do not affect the legal interest of the taxpayers and do not constitute definitive resolutions that end a procedure; therefore, the resolution issued will dismiss the appeal as inadmissible.

Origin

First antecedent

8/2001/CFF

Office 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

19/CFF/N

Removal of the depositary. The appeal for revocation is inadmissible.

Article 117, section I, subsection d) of the CFF establishes that the appeal for revocation proceeds, among other scenarios, against definitive resolutions issued by tax authorities that cause harm to the individual in tax matters.

Article 153 of the aforementioned Code states that the heads of executive offices, under their responsibility, will freely appoint and remove depositaries; therefore, once the position is assumed, the depositary acts as the guardian of the seized assets, and consequently, their removal does not affect their legal interest.

For the above reason, the challenge of the act consisting of the revocation of the position of depositary or inspector is inadmissible, as it falls within the discretionary powers of the authority to freely remove them, and said act does not imply an affectation to the legal interest of the depositary or the inspector; therefore, it is not a resolution that causes harm for which the filing of the appeal for revocation is appropriate.

Origin

First antecedent

60/2002/CFF

Office 325-SAT-IV-B-75015 of December 16, 2002.

20/CFF/N

Notification by certified mail. For its validity, the provisions of the Mexican Postal Service Law must be followed.

Article 134, section I of the CFF establishes, among other possibilities, that the notification of administrative acts may be carried out by certified mail with acknowledgment of receipt; however, there is no regulation within the tax legislation to carry out this type of notification.

In relation to the above, Article 42 of the Mexican Postal Service Law, applicable subsidiarily in terms of Article 5 of the aforementioned Code, establishes that the service of acknowledgment of registered shipments or correspondence consists of collecting the recipient's signature or their legal representative's signature on a special document.

Regarding legal entities, it will be sufficient for them to have an office for receiving and distributing correspondence, a clerk's office, or a correspondence office, to consider the aforementioned requirement satisfied, when the acknowledgment of receipt bears the "received" stamp that taxpayers use for this purpose, since the existence of such departments in said legal entities presupposes the legal authorization granted to the employees of the cited departments to receive correspondence.

In effect, tax notifications sent by certified mail to public or private legal entities must be considered correct if they are delivered to the respective clerk's office or correspondence office, and are evidenced with the corresponding stamps, since the existence of such departments in said legal entities presupposes the legal authorization granted to the employees of the cited departments to receive correspondence.

Origin

First antecedent

2/2002/CFF

Office 325-SAT-A-31676 of May 24, 2002.

21/CFF/N

Notification in terms of Article 134, section I of the CFF. Establishes three alternative means.

Article 134, section I of the CFF provides that the notification of summonses, requirements, requests for reports or documents, and administrative acts that may be appealed, shall be made personally or by certified mail or data message with acknowledgment of receipt in the tax mailbox; that is, the cited provision contemplates three alternative means of notification; in this sense, in various articles of the CFF, personal notification, by certified mail, or to the tax mailbox is indicated indistinctly as the means to carry out the notification of certain administrative acts, and in other articles, a single means of notification is indicated.

In accordance with doctrine and criteria issued by the Judicial Branch of the Federation, a notification is an act alien and independent of the administrative act that is made known through it; its legal essence is to guarantee that the taxpayer has notice of the act intended to be notified so that they are in a position to give a timely response in defense of their interests.

Thus, considering that personal notification, by certified mail, or that carried out through the tax mailbox has the consequence of making the administrative act known to the taxpayer in a reliable manner, it is concluded that tax authorities may carry out the notification in one way or another, regardless of the type of notification that the CFF provides for each case, as long as it is understood with the taxpayer or their legal representative, in the case of personal notification, or if the acknowledgment of receipt is generated, in the case of notification via the tax mailbox.

Origin

First antecedent

2014

Office 600-04-07-2014-6961 of October 2, 2014, through which the normative criteria approved in the third quarter of 2014 are made known.

Office 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with the normative criterion number 23/2014/CFF.

22/CFF/N

Seizure in the administrative route. It is not necessary to re-seize the asset.

Article 141, section V of the CFF states that taxpayers may guarantee the fiscal interest through seizure in the administrative route.

Article 143 of the aforementioned Code establishes that the guarantees constituted to secure the fiscal interest referred to in Article 141, sections II, IV, and V of the same legal instrument, shall be made effective through the administrative execution procedure.

In this sense, from the harmonious interpretation of the cited provisions, in cases where an asset is seized in the administrative route, at the time of making the fiscal interest guarantee effective through the administrative execution procedure, it will not be necessary to re-seize said assets because they are formally seized and in the custody of the taxpayer or their legal representative; therefore, the administrative execution procedure will proceed.

Origin

First antecedent

41/2004/CFF

Office 325-SAT-IV-B-91597 of August 31, 2004, through which the release of the first part of Bulletin 2004 is issued.

23/CFF/N

Suspension of the statute of limitations period derived from the filing of an administrative appeal or lawsuit.

Article 67, first paragraph of the CFF states that the powers of tax authorities to determine omitted contributions and their accessories, as well as to impose sanctions for infringement of tax provisions, expire within a period of five years.

On the other hand, the fourth paragraph of the aforementioned article establishes that said period is not subject to interruption and will only be suspended in certain scenarios, among which is the filing of an administrative appeal or lawsuit.

Consequently, the suspension by reason of the filing of an administrative appeal or lawsuit referred to in Article 67, fourth paragraph of the cited CFF, occurs with the filing of defense mechanisms against acts issued by tax authorities, and not against acts issued by authorities other than these acting in matters other than tax.

Regarding the suspension derived from the filing of an administrative appeal or lawsuit, the period for which said period is suspended begins with the presentation of the defense mechanism in question and concludes until a definitive resolution or enforceable judgment is issued, and for such effect, the legislation regulating the defense mechanism in question must be attended to.

Origin

First antecedent

First Resolution of Modifications to the FMF for 2015 Published in the DOF on March 3, 2015, Annex 7, published in the DOF on March 6, 2015.

24/CFF/N

Withheld contributions. When the withholding agent does not make it and assumes the debt or pays it, they may obtain the legal benefits of taxpayers.

Article 6 of the CFF establishes that in the case of contributions that must be paid through withholding, when the person who should make it does not do so, they will be obligated to pay an amount equivalent to what should have been withheld.

Article 66, first paragraph of the CFF provides for the authorization of payment in installments, and Article 70-A, first and third paragraphs of the CFF establishes the reduction of fines and surcharges. In both scenarios, the benefits cannot be granted when it comes to withheld contributions, as established by Articles 66-A, section VI, subsection c), following paragraph, and 70-A, first paragraph, both of the CFF.

Article 26, section I of the CFF states that those responsible jointly with the taxpayers are the withholding agents and the persons to whom the laws impose the obligation to collect contributions on behalf of the taxpayers, up to the amount of said contributions.

From the analysis of the provisions summarized in the previous paragraphs, it is derived that withholding agents have the obligation to perform the withholding on the taxpayers; that is, they must deduct or charge the amount provided for in the Law, since if they do not do so, in terms of Article 6 of the CFF and by their condition of joint responsible parties, the payment of the contributions must be made directly or charged to their assets.

In such considerations, the withholding agent who does not charge or deduct the contributions on behalf of the taxpayer and assumes the responsibility for payment or pays them directly or with their assets, will not be impeded from requesting the authorization for payment in installments provided for in Article 66, first paragraph of the CFF and the reduction of fines and surcharges indicated in Article 70-A, first and third paragraphs of the CFF.

Origin

First antecedent

Second Resolution of Modifications to the FMF for 2015 Published in the DOF on May 14, 2015, Annex 7, published in the DOF on May 21, 2015.

25/CFF/N

Improper refunds, having their origin in a contribution, retain its legal nature.

Article 1 of the CFF establishes that natural persons and legal entities are obligated to contribute to public expenses in accordance with the respective tax laws; Article 2, first paragraph of the same CFF provides that contributions are classified into taxes, social security contributions, improvement contributions, and fees, which are incurred as the legal or factual situations provided for in the tax laws are carried out in terms of Article 6, first paragraph of said Code.

Article 22, first paragraph of the CFF establishes that tax authorities will return amounts paid improperly and those that proceed in accordance with tax laws. Nevertheless, the fifteenth paragraph of the aforementioned article also states that if the refund had been made and did not proceed, surcharges will be incurred on the updated amounts, both for the improperly returned amounts and for the possible interests paid by the tax authorities, from the date of the refund.

From the analysis of the cited provisions, it is derived that amounts returned as improper credits constitute improper expenditures, which the State must receive as they originate from the tax obligations of individuals, which arise from the moment they are placed in the taxable event provided for in the law.

Consequently, tax credits for refunds of improper credits retain the legal nature of the contributions established in the law that originated them.

Origin

First antecedent

Fourth Resolution of Modifications to the FMF for 2015 Published in the DOF on September 29, 2015, Annex 7, published on the same date as the Modification.

26/CFF/N

Definitions of credit balance and payment of what is improper.

In accordance with Article 22 of the CFF, tax authorities are obligated to return amounts paid improperly and those that proceed in accordance with the laws; that is, the authority must reimburse the amounts made for the concept of an improper payment of contributions, as well as those indicated as a credit balance in the declarations filed by taxpayers.

The First Chamber of the Supreme Court of Justice of the Nation, through Thesis 1a. CCLXXX/2012, visible in the Judicial Federal Seminary and its Gazette, Book XV, December 2012, Volume 1, page 528, Tenth Era, determined that the payment of what is improper refers to all those amounts that the taxpayer paid in excess; that is, amounts that the individual does not owe to the Federal Treasury, but that occurred because a larger amount than what the subject matter law imposes was paid.

On the other hand, the credit balance does not derive from a calculation, arithmetic, or appreciation error of the elements that constitute the tax obligation on the taxpayer, but rather this results from the application of the mechanism established in the subject matter law.

In such virtue, when amounts must be returned, to determine if their nature corresponds to payment of what is improper or credit balance, the conceptualization issued by the First Chamber of the Supreme Court of Justice of the Nation must be followed; however, when the refund is a consequence of the compliance with a judgment of the Federal Judicial Branch or the Federal Court of Administrative Justice, the tax authority must attend to the indications specified in the judgment itself, regarding the nature of the amount to be returned.

Origin

First antecedent

FMF for 2016 Published in the DOF on December 23, 2015, Annex 7, published in the DOF on January 12, 2016.

27/CFF/N

Conclusive Agreement. Concept of qualification of facts or omissions.

Article 69-C, first paragraph of the CFF establishes that when taxpayers are subject to the exercise of verification powers referred to in Article 42, sections II, III, or IX, of the aforementioned Code and are not in agreement with the facts or omissions recorded in the last partial record, the final record, the observations letter, or the provisional resolution, which may entail non-compliance with tax provisions, they may opt to request the adoption of a conclusive agreement.

Article 69-C, second paragraph of the CFF establishes that, without prejudice to what is stated in the first paragraph, taxpayers may request the adoption of the conclusive agreement at any time, from the start of the exercise of verification powers and until within the twenty days following the day in which the final record was drawn up, the observations letter was notified, or the provisional resolution was issued, as the case may be, provided that the reviewing authority has already carried out a qualification of facts or omissions.

Therefore, when the adoption of a conclusive agreement is requested in accordance with what is established in the second paragraph of Article 69-C of the CFF, it will be necessary for the reviewing authority to have carried out a qualification of facts or omissions; understanding by said qualification that comparison or confrontation between what the substantive law provides and the legal or factual situations of the taxpayer, which the authority carries out at any time during the exercise of its powers, in order to determine if there is connection and correlation or not between the legal provision and the factual circumstances, provided that said qualification is made known to the taxpayer by any means in

the terms of the procedure that corresponds to the exercise of the faculty exercised.

In other words, the aforementioned qualification of facts and omissions is the affirmation of the authority which states that a certain circumstance or fact of the taxpayer triggered the legal hypothesis, for example, that a certain situation of the taxpayer entails non-compliance with tax provisions, in accordance with the information contained in the files, documents, databases, working papers, and information provided by the taxpayer and third parties related to it, in accordance with Article 63 of the aforementioned Code.

Origin

First antecedent

Second Resolution of Modifications to the RMF for 2016

Published in the DOF on May 6, 2016, Annex 7, published in the DOF on May 9, 2016.

I I.

Criteria of the ISR Law

1/ISR/N

Permanent establishment. The examples that may be considered constitutive of a permanent establishment must be analyzed in accordance with the essential characteristics of said concept.

Article 2, first paragraph, first sentence of the ISR Law establishes that for the purposes of said Law, a permanent establishment is considered to be any place of business where business activities or independent personal services are carried out, partially or totally.

The second sentence of said paragraph states that a permanent establishment will be understood to include, among others, branches, agencies, offices, factories, workshops, installations, mines, quarries, or any place of exploration, extraction, or exploitation of natural resources.

In this sense, the first sentence of the analyzed paragraph gives a definition of permanent establishment that contains the essential characteristics of this concept for the purposes of the Law; that is, a different site, a place of business. The second sentence of said paragraph enunciates a non-exhaustive list of examples that may be considered constitutive of a permanent establishment.

Consequently, the examples contained in Article 2, first paragraph, second sentence of the ISR Law, must be understood in light of the definition given in the first sentence of said paragraph, so that these examples are considered permanent establishments when they meet the essential characteristics of said concept established in the first sentence.

Origin

First antecedent

40/2013/ISR

Official Letter 600-04-02-2013-11156 of April 22, 2013, through which the normative criteria approved in the first quarter of 2013 are made known.

Official Letter 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with the normative criterion number 40/2013/ISR.

2/ISR/N

Benefits of treaties to avoid double taxation. Compliance with procedural provisions is necessary for their application.

Article 4, first paragraph of the ISR Law establishes that the benefits of treaties to avoid double taxation will only be applicable to taxpayers who prove that they are residents of the country in question and comply with the provisions of the treaty itself and the other procedural provisions contained in said Law, including the obligations to present information on their tax situation in the terms of Article 32-H, first paragraph of the CFF, or the obligation to present a statement of financial statements when obliged or when the option referred to in Article 32-A of said Code has been exercised, and to designate a legal representative.

Now, as a general rule, treaties to avoid double taxation do not establish procedural provisions, so each State is empowered to specify in its internal legislation the requirements for the application of the benefits referred to by said treaties. This is recognized by the Comments to the articles of the "Model Tax Convention on Income and on Capital", to which the recommendation adopted by the OECD Council on October 23, 1997 refers.

Therefore, for the purposes of Article 4, first paragraph of the ISR Law, persons who intend to apply the benefits of the mentioned treaties must comply with the procedural provisions contained in said Law for such effect.

Consequently, persons who do not comply with the aforementioned provisions will not be able to apply the benefits of the treaties to avoid double taxation.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 40/2012/ ISR.

3/ISR /N

Benefits of the treaty to avoid double taxation between Mexico and Barbados. Interpretation of the texts in Spanish and English.

Article 4, first paragraph of the ISR Law provides that the benefits of treaties to avoid double taxation will only be applicable to taxpayers who comply, among others, with the provisions of the treaty itself.

The authentic text in Spanish of Article 13, paragraph 3 of the Agreement between the Government of the United Mexican States and the Government of Barbados to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Tax, published in the DOF on January 15, 2009, establishes that gains obtained by a resident of a Contracting State derived from the alienation of shares, participations, or other rights in the capital of a company or legal entity resident in the other Contracting State, may be subject to taxation in that other State if the recipient of the gain has been, directly or indirectly, at any time during a period of twelve months prior to the alienation, the owner of a participation of at least 25 percent of the capital of said company or legal entity.

In the authentic text in English, which is registered by the Ministry of Foreign Affairs, the paragraph in question provides that such gains may be subject to taxation in the other State "... if the recipient of the gain, at any time during the twelve month period preceding such alienation, together with all persons who are related to the recipient, had a participation of at least 25 percent in the capital of that person or other legal person".

From the authentic texts in Spanish and English of the aforementioned paragraph, a divergence emerges, as the text in English contains the phrase "together with all persons who are related to the recipient", while the text in Spanish does not contain a translation of said phrase. However, the final part of the authentic texts in Spanish and English of the cited Agreement establishes that, in the event of any divergence, the English text will prevail.

Therefore, for the purposes of Article 4, first paragraph of the ISR Law, compliance with the provisions of Article 13, paragraph 3 of the cited Agreement must be carried out in accordance with the authentic text in English of paragraph 3 of the aforementioned article.

Origin

First antecedent

41/2012/ISR

Official Letter 600-04-02-2012-68776 of October 22, 2012, through which the normative criteria approved in the third quarter of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 41/2012/ ISR.

4/ISR/N

Order in which the credit for ISR paid abroad will be made.

Article 5, sixth paragraph of the ISR Law establishes that, in the case of corporations, the amount of ISR that they have paid abroad on income from sources located abroad, creditable against the tax that corresponds to them to pay in accordance with said Law, will not exceed the amount resulting from applying the rate referred to in Article 9 of said Law, to the fiscal profit resulting in accordance with the applicable provisions for the income received abroad, also stating that deductions that are exclusively attributable to income from wealth sources located abroad will be considered at one hundred percent.

This provision does not establish the order in which the credit for ISR paid abroad must be made; therefore, it is considered that the same can be credited against the ISR that corresponds to them to pay in the country to said corporations, before crediting the provisional payments of the exercise.

Origin

First antecedent

46/2007/ISR

Official Letter 325-SAT-09-04-B-90015 of December 14, 2007, through which Bulletin 2007 is made known.

5/ISR/N

Credit for ISR paid abroad. Taxpayers may only credit the excess when the amicable procedure concludes with an agreement and they accept it.

Article 5, fifteenth paragraph of the ISR Law establishes that taxpayers who have paid ISR abroad in an amount exceeding that provided in the treaty to avoid double taxation that, if applicable, is applicable to the income in question, may only credit the excess in the terms of said article once the controversy resolution procedure contained in that same treaty has been exhausted.

Article 25, paragraph 2, or its similar or analogous provision, of the treaties to avoid double taxation that Mexico has in force, provides that the competent authorities will do their best to resolve the issue in order to avoid imposition that does not conform to the treaty, through an amicable agreement.

In accordance with what is stated in the previous paragraph, this is only an amicable procedure; that is, it constitutes the execution of a pact that implies for the parties the mere obligation to negotiate, but not the obligation to reach an agreement.

In this sense, an amicable procedure may conclude with or without an agreement, whose execution, if any, would normally be subordinate to the acceptance of such amicable agreement by the taxpayer.

Consequently, taxpayers will not be able to credit the excess referred to in Article 5, fifteenth paragraph of the ISR Law, when the amicable procedure concludes without an agreement, or when it ends with an amicable agreement that is not accepted by said taxpayers; on the contrary, they may carry out such credit when the amicable procedure concludes with an agreement and they accept it.

Origin

First antecedent

45/2013/ISR

Official Letter 600-04-02-2013-12915 of June 25, 2013, through which the normative criteria approved in the second quarter of 2013 are made known.

Official Letter 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with the normative criterion number 45/2013/ISR.

6/ISR/N

Refund of amounts made by the tax authority. If interest is paid, it must be accumulated for ISR purposes.

Article 8 of the ISR Law establishes that interest is considered, whatever name it is designated by, to be the yields of credits of any kind.

Article 18, fraction IX of the cited Law provides that, in the case of corporations, accrued interest earned in the exercise are considered accumulative income, among others, without any adjustment.

For the case of natural persons, Articles 133 and 135 of the ISR Law specify that interest established in Article 8 of said Law and others that according to said Law have the treatment of interest are considered income; and that those who pay said interest are obliged to withhold and pay the ISR applying the rate established for effect in the exercise in question, the LIF.

Article 22-A of the CFF provides for the cases in which the tax authority must pay interest for late refunds, which will be calculated from the moment established for each case, calculated in accordance with the rate provided in Article 21 of said Code which will be applied to the updated refund.

Therefore, when the tax authority proceeds to refund amounts where it pays interest, in its resolution it must indicate that they will be accumulative for ISR purposes, additionally, in the case of natural persons, the tax authority will proceed to withhold and pay the corresponding ISR.

Origin

First antecedent

2009

Official Letter 600-04-02-2009-75488 of July 13, 2009, through which the normative criteria approved in the first half of 2009 are made known.

Official Letter 600-04-02-2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with the normative criterion number 49/2009/ISR

7/ISR/N

Gain in the alienation of fiduciary commercial certificates, placed among the general investing public. It must be considered interest.

Article 14, first paragraph, fraction VI, subsection b), second paragraph of the CFF establishes that the alienation of participation certificates will be considered as an alienation of credit titles that do not represent the ownership of goods and will have the tax consequences established by tax laws for the alienation of such titles.

Article 8, first paragraph of the ISR Law provides that interest is considered for the purposes of said Law, among others, the gain in the alienation of bonds, securities, and other credit titles, provided that they are those that are placed among the general investing public, in accordance with the general rules issued for this effect by the SAT.

Rule 3.2.12., or that which replaces it, establishes that, for the purposes of the ISR Law and its Regulations, value titles that are placed among the general investing public are those registered in accordance with Articles 85 and 90 of the LMV, in the National Securities Registry under the CNBV; as well as values listed in the international quotation system of the Mexican Stock Exchange or the Institutional Stock Exchange.

Articles 62 and 63, first paragraph of the LMV, state that commercial certificates are credit titles that represent the individual participation of their holders in a collective credit owed by corporations or by an estate subject to trust, and that those issued for this effect under a trust must be called fiduciary commercial certificates. Some fiduciary commercial certificates are known commercially as development capital certificates or CCD by their acronym.

Consequently, for the purposes of the ISR Law and in accordance with Rule 3.2.12., or that which replaces it, the gain in the alienation of fiduciary commercial certificates placed among the general investing public is considered interest.

Origin

First antecedent

2010

Official Letter 600-04-02-2010-70388 of December 14, 2010, through which the normative criteria approved in the second half of 2010 are made known.

Official Letter 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with the normative criterion number 45/2010/ISR.

8/ISR/N

ISR on dividends or profits. Cases in which corporations will not have to calculate the tax on amounts considered as distributed dividends or profits.

Article 10, first paragraph, first sentence of the ISR Law establishes that corporations that distribute dividends or profits must calculate and pay the corresponding tax on them.

The same article, in its last paragraph, provides that corporations that distribute the dividends or profits referred to in Article 140, fractions I and II of the cited Law, will calculate the tax on said dividends or profits.

In this sense, corporations that meet the conditions provided in Article 140, fractions III, IV, V, and VI of the ISR Law, will not have to calculate the aforementioned tax on the amounts considered as distributed dividends or profits, since Article 10, last paragraph of the cited Law does not confer this obligation on them.

Origin

First antecedent

2010

Official Letter 600-04-02-2010-70388 of December 14, 2010, through which the normative criteria approved in the second half of 2010 are made known.

Official Letter 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with the normative criterion number 46/2010/ISR.

9/ISR/N

ISR on dividends or profits. Order in which its credit will be made.

Article 10, fifth paragraph, fraction I, first paragraph of the ISR Law provides that when corporations distribute dividends or profits and as a consequence thereof, pay the tax established in the cited article, they may carry out the corresponding credit only against the ISR of the exercise that results due to the corporation in the exercise in which the payment of the tax corresponding to the distributed dividends or profits was made.

It should be noted that the cited provision is a repetition of the text of Article 11, sixth paragraph, fraction I, first paragraph of the ISR Law in force until December 31, 2013. In relation to this provision, it is commented that in the Report of the Commission of Finance and Public Credit to reform said Law for 2003, it was considered convenient to modify the credit scheme, to allow taxpayers to carry out the credit of the ISR paid by the distribution of dividends or profits, against the tax caused in the same exercise and in the following two.

In this sense, it is observed that the legislator equated the concept of ISR of the exercise that results due to, referred to in Article 10, fifth paragraph, fraction I, first paragraph of the current ISR Law, with that of tax caused, which is determined in accordance with Article 9 of the referred Law; this consideration was reflected in the text of the aforementioned Article 10, which corresponds to the identical reproduction of Article 11, sixth paragraph, fraction I, first paragraph of the ISR Law in force until December 31, 2013, so the reasons that gave rise to the provision prevail.

Consequently, for the purposes of Article 10, fifth paragraph, fraction I, first paragraph of the ISR Law, the tax that results due, against which corporations can credit the tax paid by the distribution of dividends or profits, is that which results from applying the mechanism provided in Article 9 of the Law in question, before crediting the corresponding provisional payments.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 48/2012/ ISR.

10/ISR/N

Declaration of the ISR exercise. The fiduciary is not obliged to present it for activities carried out through a trust.

Article 13, first paragraph of the ISR Law establishes that when business activities are carried out through a trust, the fiduciary will determine, in the terms of Title II of said Law, the result or fiscal loss of said activities in each exercise and will fulfill on behalf of the set of beneficiaries the obligations indicated in said Law, including that of making provisional payments.

The same article in its third paragraph, provides that beneficiaries will accumulate to their other income of the exercise, the part of the fiscal result of said exercise derived from the business activities carried out through the trust that corresponds to them, in accordance with what is stipulated in the trust contract and will credit in that proportion the amount of the provisional payments made by the fiduciary. It also states that the fiscal loss derived from the business activities carried out through the trust can only be reduced from the fiscal profits of subsequent exercises derived from the activities carried out through that same trust in the terms of Title II, Chapter V of the ISR Law.

The penultimate paragraph of the aforementioned article determines that in cases where beneficiaries have not been designated or they cannot be identified, it will be understood that the business activities carried out through the trust are carried out by the settlor.

Article 76, fraction XIII of the legal order in question provides that corporations must present, no later than February 15 of each year, a declaration in which they provide information on the operations carried out in the previous calendar year, through trusts in which they participate in business activities.

Articles 117, second and third paragraphs and 118, second paragraph of the aforementioned Law indicate, among others, the obligations of the fiduciary in trust operations where the temporary use or enjoyment of real estate is granted, specifying that the fiduciary institution will make provisional payments on the yields and must provide no later than January 31 of each year to those entitled to the yields, the fiscal receipt of the same, of the provisional payments made and of the corresponding deductions, for the previous calendar year, and that it will be the fiduciary institution that keeps the accounting books, issues the fiscal receipts and makes the provisional payments.

Article 158, fourth paragraph of the aforementioned Law contemplates that it will be the fiduciary institution that issues the CFDI and makes the withholding referred to in said article, in the case of income of residents abroad who receive it for granting the temporary use or enjoyment of real estate located in national territory.

Likewise, Articles 187, 188, 192, and 193 of the ISR Law establish the tax treatment applicable to certain operations carried out through trusts without imputing to the fiduciary the obligation to present the annual declaration.

From Article Ninth, fraction X of the Transitional Provisions of the ISR Law, of the Decree by which various provisions of the VAT Law; the IEPS Law; the LFD, are reformed, added, and repealed; the ISR Law is issued, and the Law on the Single Rate Corporate Income Tax, and the IDE Law are abrogated, published in the DOF on December 11, 2013, it is understood that the fiduciary institution will present before the authorized offices, no later than February 15 of each year, a declaration providing information on the name, RFC key, yields, provisional payments

made and deductions, related to each of the persons to whom the earnings correspond during the previous calendar year.

Article 32-B, fraction VIII of the Federal Tax Code (CFF), establishes the obligation of financial entities and savings and loan cooperative societies when they participate as trustees in trusts that generate income, to present various information for each of said trusts.

In this regard, since the legal provisions quoted above do not expressly state the obligation, the trustee is not required to file the income tax (ISR) exercise declaration for business activities carried out through a trust.

Origin

First antecedent

2009

Office 600-04-02-2009-75488 of July 13, 2009, through which the normative criteria approved in the first half of 2009 are made known.

Office 600-04-02-2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with normative criterion number 50/2009/ISR.

11/ISR/N

Determination of the additional profit-sharing distribution to workers of companies. Tax authorities are not obligated to verify the existence of any labor relationship.

Articles 9, penultimate and last paragraphs, and 109, antepenultimate, penultimate, and last paragraphs of the Income Tax Law (Ley del ISR) establish the procedure to determine the taxable income for workers' participation in company profits.

In accordance with Articles 121 and 122 of the Federal Labor Law, the determination of profit-sharing by the tax authority is appropriate, without it being a requirement that it be proven that the person visited at their domicile has workers.

This is because Articles 523 and 526 of the aforementioned Law establish the competence of the Tax Administration Service (SAT) for the application of labor standards and to intervene in matters related to workers' participation in company profits, granting it the authority to determine additional distributions, without stating that the tax authority must verify the existence of workers.

Indeed, if it is determined that the taxable base of the companies is higher, the liquidation of the omitted tax and the appropriateness of making an additional profit-sharing distribution to workers will be ordered. It is not the competence of the tax authority to verify the existence of any labor relationship or the payment of the additional profit-sharing.

However, when, in accordance with applicable legal provisions, the employer and workers agree in collective labor contracts on various conditions related to profit-sharing, tax authorities must take these stipulations into account when exercising their verification powers related to workers' participation in company profits.

Origin

First antecedent

13/2001/CFF

Office 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

12/ISR/N

Accruals from the provision of the electronic voucher or wallet issuance service.

Article 16, first paragraph of the Income Tax Law provides that resident legal entities will accrue the total of income in cash, in goods, in services, in credit, or of any other type that they obtain during the exercise; that is, it establishes a concept of income that is broad and inclusive of all concepts that positively modify the taxpayer's equity.

Given the above, it is considered that the equity of legal entities that provide the service of issuing electronic vouchers or wallets is positively modified when they receive income under the following concepts:

I.

The amount of the consideration for said service, known as the commission;

II.

The amount or nominal value received from their clients, other than the commission, which supports the issuance of vouchers or deposit in electronic wallets, and which are not definitively refunded to affiliated commercial establishments, clients, or users.

III.

The earnings generated in favor of the issuer of vouchers or electronic wallets, regarding the amount or nominal value of these.

Origin

First antecedent

2010

Office 600-04-02-2010-68009 of July 26, 2010, through which the normative criteria approved in the first half of 2010 are made known.

Office 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with normative criterion number 49/2010/ISR.

13/ISR/N

Authorization to alienate shares at fiscal cost. The condition for granting it is not met regarding those that do not have an average cost per share.

Article 24, first paragraph of the Income Tax Law establishes that tax authorities will authorize the alienation of shares at fiscal cost in cases of restructuring of resident societies in Mexico belonging to the same group, provided that the requirements indicated in said article are met.

Fraction I of the cited article indicates as a requirement that the average cost of the shares regarding which the request is made be determined at the date of alienation, in accordance with Articles 22 and 23 of the Income Tax Law, distinguishing them by alienator, issuer, and acquirer.

Article 22, fraction III, third paragraph, second sentence of the Income Tax Law provides for the hypothesis in which shares will not have an average cost per share; that is, the situation in which they will not have a fiscal cost.

Consequently, the condition for granting the authorization provided for in Article 24 of the Income Tax Law is not met regarding shares that do not have an average cost per share in accordance with Article 22, fraction III, third paragraph, second sentence of said Law.

Origin

First antecedent

2013

Office 600-04-02-2013-12915 of June 25, 2013, through which the normative criteria approved in the second quarter of 2013 are made known. Office 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 57/2013/ISR.

14/ISR/N

Containers for bottled beverages. Situations in which they must be considered fixed assets or merchandise.

According to Article 25, fraction II of the Income Tax Law, taxpayers may deduct the cost of goods sold, within which they may consider finished or semi-finished products that form part of the merchandise, in accordance with Article 39, third paragraph, item a) of the aforementioned Law.

In this context, the containers used in the alienation of bottled beverages must be considered as part of the cost of goods sold, since these containers are part of the finished product that bottlers use to alienate their beverages.

On the other hand, Article 32, second paragraph of the Income Tax Law considers fixed assets to be the set of tangible goods that taxpayers use for the realization of their activities and that depreciate due to use in the taxpayer's service and the passage of time, whose purpose is the utilization for the development of the taxpayer's activities, and not that of being alienated within the normal course of their operations.

Consequently, regarding containers that do not form an integral part of the final product that bottling companies alienate, since these are exchanged for others of the same species and quality at the time of alienation, it must be considered that they form part of the company's fixed assets, as they are tangible goods that are used multiple times, and due to this use, they depreciate with the passage of time. Likewise, their main purpose is the development of the bottler's activities, since they are a means to commercialize their beverages and do not have the purpose of being alienated within the normal course of operations.

Origin

First antecedent

16/2002/ISR

Office 325-SAT-A-31676 of May 24, 2002.

15/ISR/N

Deduction of losses due to fortuitous event or force majeure.

A.

A loss of cash derived from theft or fraud may be deducted under Article 25, fraction V of the Income Tax Law, as a case of force majeure, provided the following requirements are met:

I.

That the lost amounts, the deduction of which is sought, had been accrued for Income Tax purposes, and

II.

That the existence of the fact that the law identifies as a crime is proven. To this end, the taxpayer must file a complaint or lawsuit as appropriate and possess an authentic copy of the order linking to process, issued by the competent Control Judge.

This authentic copy must be presented upon request by the tax authority.

Amounts recovered by insurance, bonds, or third-party liabilities will be accrued in accordance with Article 18, fraction VI of the Income Tax Law.

The taxpayer will re-accrue the amounts deducted under this criterion if the Judicial Authority decrees the dismissal of the criminal proceedings, in accordance with what is provided in the National Code of Criminal Procedures and the corresponding resolution is final.

In cases where the loss of cash, theft, or fraud is not proven, the amount declared by the taxpayer as a loss must be accrued, after updating in accordance with Article 17-A of the Federal Tax Code (CFF), from the day the deduction was made until the date it is accrued.

B.

In the event that the loss of goods referred to in Article 37 of the Income Tax Law derives from the commission of a crime, the taxpayer, to make the corresponding deduction, must comply with the requirement referred to in fraction II of section A above.

Origin

First antecedent

3.2.5.

Office 325-A-VII-B-23300 of December 20, 1995.

16/ISR/N

Accrued interest. Situation in which the deductibility requirement is proven.

Article 25, fraction VII of the Income Tax Law establishes that accrued interest charged during the exercise is deductible without any adjustment, except in the case of default interest.

Article 27, fraction III, first paragraph of the Income Tax Law provides that authorized deductions must be supported by a fiscal receipt; however, this provision does not limit the authorized deduction in the diverse Article 25, fraction VII of the invoked legal instrument, to accrued interest having been paid, except for those referred to in Article 27, fraction VIII of the cited Law.

Now, among other requirements for authorized deductions, Article 27, fractions I, IV, and VII of the Income Tax Law require that these be strictly indispensable for the purposes of the taxpayer's activity; that they are duly registered in accounting; and, in the case of interest on borrowed capital, that these have been invested in business purposes.

In view of the above, taxpayers who intend to deduct accrued interest, except in the case of default interest and those referred to in Article 27, fraction VIII of the Income Tax Law; must comply with the deductibility requirements provided in the cited Law, such as proving that the expense is strictly indispensable for the purposes of the taxpayer's activity, that it is duly registered in accounting, that they possess instruments containing the support of the debt in which the interest rate agreed upon by the parties is stated, as well as appearing in documents that generate legal certainty that the operation was real, the operations are recorded in working papers; and, in the case of interest on borrowed capital, proving that these have been invested in business purposes.

Origin

First antecedent

2012

Office 600-04-02-2012-68776 of October 22, 2012, through which the normative criteria approved in the third quarter of 2012 are made known.

Office 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 57/2012/ ISR.

17/ISR/N

Acts or operations prohibited by the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin. The performance of said acts or operations implies the non-deductibility of expenditures related to them.

Articles 27, fraction I, and 105, fraction II of the Income Tax Law establish that the authorized deductions provided for in Articles 25 and 103 of the cited Law must meet, among other requirements, being strictly indispensable for the purposes of the taxpayer's activity or for the obtaining of income for which they are obliged to pay Income Tax, respectively.

Article 32 of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin prohibits fulfilling obligations and, in general, liquidating or paying, as well as accepting the liquidation or payment, of acts or operations through the use of coins and banknotes, in national currency or foreign exchange and precious metals, in the situations referred to in said article.

In this sense, performing any of the acts or operations referred to in the aforementioned Article 32 of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin implies that the expenditures made by the taxpayer related to said acts and operations have been made in contravention of a public order law.

This, in accordance with Articles 1830 and 1831 of the Federal Civil Code, in relation to Article 8 of said Code, which establish that the fact that is contrary to public order laws is illicit and that the determining purpose or motive of the will must also not be contrary to said laws, resulting in their nullity as a sanction; therefore, expenditures, to be considered authorized deductions, must not be contrary to public order laws.

Therefore, expenditures related to acts or operations prohibited by Article 32 of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, will not be strictly indispensable for the purposes of the taxpayer's activity nor for the obtaining of income for which they are obliged to pay Income Tax and, therefore, will not be deductible under Articles 27, fraction I, and 105, fraction II of the Income Tax Law, respectively.

Origin

First antecedent

2013

Office 600-04-07-2013-16027 of November 19, 2013, through which the normative criteria approved in the fourth quarter of 2013 are made known.

Office 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 61/2013/ISR.

18/ISR/N

Legal entities that concentrate their treasury transactions.

Exception to the deductibility requirement provided for the eligibility of VAT credit.

In accordance with Article 27, fraction III of the Income Tax Law, authorized deductions must be supported by a fiscal receipt and that payments whose amount exceeds $2,000.00 be made through electronic funds transfer from accounts opened in the name of the taxpayer at institutions that compose the financial system and the entities that the Bank of Mexico authorizes for this purpose; bearer check from the taxpayer's account, credit, debit, or service card, or the so-called electronic wallets authorized by the SAT.

Similarly, Article 5, fraction I of the Value Added Tax Law states that to consider VAT as creditable, it must correspond to goods, services, or the temporary use or enjoyment of goods strictly indispensable, considering as such the expenditures made by the taxpayer that are deductible for Income Tax purposes.

Likewise, Rule 3.3.1.3. states that what is provided in Article 27, fraction III of the Income Tax Law is only applicable to obligations that are fulfilled or extinguished with the delivery of a sum of money.

In some cases, legal entities that belong to a group of companies that carry out reciprocal operations, have signed agreements to concentrate their treasury transactions through a company from the same group that acts as a centralizer, which operates payment processes by canceling accounts receivable against accounts payable between group companies, and consequently, no cash flows are carried out to settle this type of operation.

In this sense, when the situation indicated in the previous paragraph occurs, the deductibility requirement provided in Article 27, fraction III of the Income Tax Law will be considered fulfilled and, therefore, the requirement related to the credit mentioned in Article 5, fraction I of the Value Added Tax Law will also be considered fulfilled.

Origin

First antecedent

2008

Office 600-04-02-2008-75872 of September 1, 2008, through which the normative criteria approved as of August 2008 are made known. Office 600-04-02-2009-73416 of January 7, 2009, through which Bulletin 2008 is made known, with normative criterion number 3/2008/ISR.

19/ISR/N

Losses from uncollectible credits. Notorious practical impossibility of collection.

Article 27, fraction XV of the Income Tax Law establishes as a requirement to deduct losses from uncollectible credits that these be considered realized in the month in which the corresponding statute of limitations period is consummated or earlier if there is a notorious practical impossibility of collection.

For the effects of the same article, item b) of the cited fraction considers that there is a notorious practical impossibility of collection, among other cases, regarding credits whose principal amount on the day of their maturity is greater than 30,000 UDIS, when the creditor obtains a final resolution issued by the competent authority demonstrating that collection efforts have been exhausted or, if applicable, that the execution of the favorable resolution was impossible, in addition, complying with what is provided in the final paragraph of item a) of the same fraction.

The last paragraph of item a) of the cited fraction provides that when the debtor of the credit in question is a taxpayer who carries out business activities and the creditor informs the debtor in writing that they will deduct the uncollectible credit, in order for the debtor to accrue the income derived from the uncovered debt under the terms of the Income Tax Law, and that taxpayers who apply the cited paragraph must inform by February 15 of each year of the uncollectible credits they deducted under the terms of that paragraph in the immediately preceding calendar year.

In this sense, the expression "comply" used in item b), when referring to the final paragraph of item a), alludes to an obligation.

Therefore, the duty provided in item b) is only applicable to the second part of the final paragraph of item a), regarding the creditor's obligation to inform the debtor in writing that they will deduct the loss from the uncollectible credit, so that this person accrues the income derived from the uncovered debt, and to inform by February 15 of each year of the losses from uncollectible credits they deducted in the immediately preceding year.

Origin

First antecedent

2009

Office 600-04-02-2009-75488 of July 13, 2009, through which the normative criteria approved in the first half of 2009 are made known.

Office 600-04-02-2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with normative criterion number 57/2009/ISR.

20/ISR/N

Interest is not considered amounts paid on behalf of third parties for Income Tax purposes.

Article 28, fraction I, first paragraph, of the Income Tax Law establishes that payments for Income Tax charged to third parties will not be deductible for the effects of Title II of said Law.

Article 153, fourth paragraph of the cited Law provides that when the person making any of the payments referred to in Title V of the Income Tax Law covers the tax corresponding to the taxpayer on their behalf, the amount of said tax will be considered income included in the referred Title.

Article 166, seventh paragraph of the Income Tax Law provides that the tax will be paid through withholding that will be made by the person making the payments and will be calculated by applying to the interest obtained by the taxpayer, without any deduction, the rate corresponding in each case.

In this order of ideas, if the person who made the payments referred to in the previous paragraph contractually obligated themselves to pay the additional amounts necessary to ensure that the net amount, effectively received by the recipient, is equal to the total amount that the foreign resident would have received had no withholding been made, it is considered that these additional amounts retain the nature of interest agreed upon in favor of said resident.

Consequently, for the effects of Article 28, fraction I of the Income Tax Law, the additional amounts indicated in the previous paragraph are not considered payment of Income Tax charged to a third party.

This is because these additional amounts, for the effects of Title V of the Income Tax Law, are interest income and, therefore, must be considered as such for the determination of the corresponding Income Tax withholding charged to the foreign resident.

Origin

First antecedent

2013

Office 600-04-02-2013-12915 of June 25, 2013, through which the normative criteria approved in the second quarter of 2013 are made known.

Office 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 64/2013/ISR.

21/ISR/N

Gifts to public officials. Not deductible for Income Tax purposes.

Article 28, fraction III of the Income Tax Law establishes that gifts, attentions, and other expenses of an analogous nature will not be deductible, with the exception of those referred to in the provision itself.

From Articles 222 and 222 bis of the Federal Penal Code, it is derived that the crimes of bribery and bribery of foreign public officials consist of giving, directly or through an intermediary, any kind of gift such as money, goods, or services, to public officials, even foreign ones, or to third parties so that the public official does or refrains from doing something just or unjust related to their functions.

Such conduct implies that any expenditure made by the taxpayer that falls under the criminal offenses indicated, has been made in contravention of public order laws.

The foregoing, pursuant to Articles 1830 and 1831 of the Federal Civil Code, in relation to Article 8 of said Code, which establish that the act contrary to public order laws is illicit and that the determining purpose or motive of the will must also not be contrary to said laws, resulting in its nullity as a sanction.

In this sense, expenditures, to be considered authorized deductions, must not be contrary to public order laws, even when carried out abroad.

Due to the foregoing considerations, expenditures consisting of giving, directly or through an intermediary, money, goods, or services to public officials, even foreign ones, or to third parties, do not constitute authorized deductions for Income Tax (ISR) purposes, because they fall under the scenario provided for in Article 28, Section III of the ISR Law and are carried out in contravention of public order laws, regardless of whether such expenditures are related or not to the investigation or sanction for the aforementioned criminal offenses.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 60/2012/ISR.

22/ISR/N

Commercial credit. The overprice paid by the taxpayer for the acquisition of a good is not deductible.

Pursuant to Article 28, Section XII of the ISR Law, commercial credit is not deductible, even when acquired from third parties.

Now, commercial credit must be understood as the overprice that, with respect to its real, nominal, or market value, the taxpayer pays for an acquisition.

Therefore, the overprice paid by the taxpayer for the acquisition of a good, above its real, nominal, or market value, is not deductible for ISR purposes.

Origin

First antecedent

2008

Official Letter 600-04-02-2008-75872 of September 1, 2008, through which the normative criteria approved up to August 2008 are made known. Official Letter 600-04-02-2009-73416 of January 7, 2009, through which Bulletin 2008 is made known, with normative criterion number 5/2008/ISR.

23/ISR/N

Thin capitalization. Exchange losses accrued due to foreign currency fluctuation, derived from the amount of debts exceeding three times the capital of taxpayers and arising from debts contracted with related parties abroad, are not deductible.

Article 28, Section XXVII, first paragraph of the ISR Law establishes that, for the purposes of Title II of said Law, interest derived from the amount of the taxpayer's debts that exceed three times their book capital, which come from debts contracted with related parties resident abroad within the meaning of Article 179 of the cited Law, will not be deductible.

Article 8, sixth paragraph of the ISR Law states that the treatment provided by said Law for interest will be given to gains or exchange losses, accrued due to foreign currency fluctuation, including those corresponding to the principal and the interest itself.

Consequently, exchange losses accrued due to foreign currency fluctuation that derive from the amount of the taxpayer's debts that exceed three times their book capital, which come from debts contracted with related parties resident abroad within the meaning of Article 179 of the ISR Law, are not deductible in accordance with Article 28, Section XXVII, first paragraph of said Law.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 62/2012/ISR.

24/ISR/N

ISR Deductions. Vehicles known as pickups are cargo trucks.

Article 36, Section II of the ISR Law establishes that investment in automobiles will only be deductible up to an amount of $175,000.00.

In the case of investments made in automobiles whose propulsion is through rechargeable electric batteries, as well as electric automobiles that also have an internal combustion engine or an engine powered by hydrogen, they will only be deductible up to an amount of $250,000.00.

Article 34, Section VI of the same Law provides that, in the case of automobiles, buses, cargo trucks, tractor-trailers, forklifts, and trailers, the maximum percentage authorized as a deduction is 25%.

Article 3-A of the Regulations of the ISR Law defines an automobile as a land vehicle for the transport of up to ten passengers, including the driver, specifying in its second paragraph that motorcycles, whether with two to four wheels, are not considered included in the previous definition.

However, neither the ISR Law nor its Regulations define what should be understood by vehicles or cargo trucks, so in accordance with what is provided in Article 5, second paragraph of the Federal Tax Code (CFF), the Regulations for Transit on Highways and Federal Bridges are applied suppletorily, which in its Article 2, Sections IX and X, in relation to Article 24, Section A, Section II, subsections a) and b), second paragraph, numeral 6, defines pickup vehicles as light unit trucks and heavy unit trucks.

In this sense, vehicles known as pickups are cargo trucks intended for the transport of merchandise, so they should not be considered as automobiles for the purposes of the ISR Law.

Origin

First antecedent

2009

Official Letter 600-04-02-2009-77370 of November 25, 2009, through which the normative criteria approved in the second half of 2009 are made known.

Official Letter 600-04-02-2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with normative criterion number 60/2009/ISR.

25/ISR/N

Calculation of annual inflation adjustment. Recoverable VAT should not be considered.

The annual inflation adjustment of credits is determined in accordance with what is established by Articles 44 and 45 of the ISR Law.

Pursuant to Article 4 of the VAT Law, recoverable tax is understood as the amount equivalent to the VAT that would have been passed on to the taxpayer and the tax itself that this taxpayer would have paid by reason of the importation of goods or services, in the corresponding month.

In this sense, the VAT Law, according to Articles 1, fourth paragraph and 4, only gives the right to subtract, compare, or credit recoverable VAT against the VAT that the same taxpayer would have passed on, in order to periodically determine a balance in favor or tax to pay; that is, recoverable VAT is not a concept due to the tax authority and, therefore, does not constitute a credit in its favor or an account receivable.

Therefore, recoverable VAT, not being a credit, should not be considered in the determination of the annual inflation adjustment.

Origin

First antecedent

Official Letter 325-A-VII-10973 of December 3, 1996, through which various normative criteria are made known.

26/ISR/N

Financial operations derived from capital referenced to the exchange rate of a currency. The fact that they are provided for in a provision that regulates non-withholding for the payment of interest does not alter their nature.

Article 16-A, second paragraph of the CFF establishes that debt financial derivative operations are those that are referenced to interest rates, debt titles, or the INPC, and that capital financial derivative operations are those that are referenced, among other scenarios, to currencies.

Article 54, second paragraph, Section VII of the ISR Law establishes that withholding will not be effected for the payment of interest regarding gains obtained in capital financial derivative operations referenced to the exchange rate of a currency that are carried out in the recognized markets referred to in Article 16-C, Section I of the CFF.

Article 20, fourth paragraph of the said Law provides that the treatment established in said Law for interest will be given to the gain or loss from debt financial derivative operations; however, such treatment is not extended to capital financial derivative operations within the meaning of the referred provisions.

Therefore, the fact that Article 54, second paragraph, Section VII of the ISR Law provides a scenario of non-withholding regarding gains obtained in capital financial derivative operations referenced to the exchange rate of a currency, does not grant them the nature of debt financial derivative operations or of interest.

Origin

First antecedent

2014

Official Letter 600-04-07-2014-3066 of May 6, 2014, through which the normative criteria approved in the first quarter of 2014 are made known.

Official Letter 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 29/2014/ISR.

27/ISR/N

Update of fiscal losses. Applicable factor.

Pursuant to Article 57 of the ISR Law, the amount of the fiscal loss occurring in a fiscal year must be updated by multiplying it by the factor corresponding to the period from the first month of the second half of the year in which it occurred, up to the last month of said year.

Article 6, Section II of the cited Law establishes that to determine the value of a good or an operation at the end of a period, the update factor will be obtained by dividing the INPC of the most recent month of the period, by the cited index corresponding to the oldest month of the period.

Therefore, in terms of Article 6, Section II of the ISR Law, the factor to update the fiscal loss referred to in the aforementioned Article 57 of the ISR Law, will be obtained by dividing the INPC of the month of December of the year in which the loss occurred, by the corresponding one for the month of July of the same year.

Origin

First antecedent

Official Letter 325-A-VII-10973 of December 3, 1996, through which various normative criteria are made known.

28/ISR/N

Increase of fiscal loss in complementary declarations.

Pursuant to Article 57, third paragraph of the ISR Law, when the taxpayer does not decrease in a fiscal year the fiscal loss of the previous year, being able to have done so in accordance with the aforementioned Article, they will lose the right to do so in subsequent years and up to the amount in which they could have done so.

The second paragraph of the aforementioned Article refers that the fiscal loss occurring in a year can only be decreased against the fiscal profit of the following ten years until exhausted.

Therefore, if through a normal declaration, correction declaration by audit, and correction declaration, in cases where the tax authority has exercised its verification powers, the taxpayer increases the declared fiscal profit or converts the declared fiscal loss into fiscal profit, it is considered that the right to decrease an amount equal to the increased fiscal profit is not lost, or to additionally decrease an amount equal to the loss converted into fiscal profit, since the corresponding amortization could not have been made in accordance with the same Article 57 of the ISR Law.

Origin

First antecedent

X/95

Bulletin of Normativity 1 May-June 1995.

29/ISR/N

Consumer cooperative societies. They are not obligated to pay ISR when alienating goods other than their fixed assets.

Article 80, sixth paragraph of the ISR Law states that non-profit legal entities will be obligated to determine said tax when any of the following legal or factual situations occur: a) they alienate goods other than their fixed assets, or b) they provide services to persons other than their members, provided that the income derived from said operations exceeds 5% of the total income of the legal entity in the fiscal year in question.

Nevertheless, from a harmonious interpretation of Articles 79, Section VII and 80 of the cited Law, the aforementioned scenario must be excluded for consumer cooperative societies of goods, in cases where these alienate goods other than their fixed assets to their members, since they are created with a social purpose, without profit motive, acquiring or producing goods and services for the consumption of their partners, in exchange for a consideration that the society uses to continue fulfilling its purpose; therefore, only the income that this type of cooperative obtains, from the alienation of those goods to its members, should not cause ISR.

Origin

First antecedent

18/2001/ISR

Official Letter 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

30/ISR/N

Educational institutions. They must have official recognition of validity of studies to obtain authorization to receive deductible donations and be considered non-profit legal entities.

Pursuant to Article 79, Section X of the ISR Law, non-profit legal entities are considered to be societies or associations of a civil nature dedicated to teaching, with authorization or official recognition of validity of studies in terms of the General Education Law, provided that they are considered as institutions authorized to receive deductible donations in terms of the referred Law.

Article 146 of the General Education Law states that private parties may impart education in all its types and modalities, and that with regard to preschool, primary, secondary, normal, and other education for the training of basic education teachers, private parties must previously obtain, in each case, the express authorization of the State; in the case of studies other than those mentioned above, they may obtain the official recognition of validity of studies.

Article 5 of the CFF establishes that tax provisions that establish burdens on private parties referring to the subject, object, base, rate, or tariff of a contribution and the exceptions to this, must be applied strictly, so the rest of the tax provisions will be interpreted applying any method of legal interpretation.

In view of the foregoing, for societies or associations of a civil nature dedicated to teaching to be considered non-profit legal entities and obtain authorization to receive deductible donations, they must have the official recognition of validity of studies for each educational level they impart, regardless of that, in accordance with the General Education Law, it is not mandatory to obtain such recognition, since it is a requirement expressly provided for in the ISR Law.

Origin

First antecedent

52/2002/ISR

Official Letter 325-SAT-IV-B-75015 of December 16, 2002.

31/ISR/N

Educational institutions authorized to receive deductible donations.

Enrollment fees and tuition paid by their students are considered recovery quotas.

Article 79, Section X of the ISR Law establishes that they are not taxpayers of the tax are societies or associations of a civil nature dedicated to teaching, with authorization or with official recognition of validity of studies in terms of the General Education Law, provided that they are considered as institutions authorized to receive deductible donations in terms of the ISR Law.

Article 80, seventh paragraph of the ISR Law establishes that legal entities and trusts authorized to receive deductible donations may obtain income from activities other than the purposes for which they were authorized to receive deductible donations, provided that they do not exceed 10% of their total income in the fiscal year in question and that in the case that their unrelated income exceeds the stated limit, they must determine the tax corresponding to said excess. For this effect, income received by concept of recovery quotas are not considered income from activities other than the authorized purposes.

From a harmonious interpretation of the aforementioned provisions, what is provided in Article 80, seventh paragraph of the ISR Law, will not be applicable regarding the provision of teaching services carried out by institutions with authorization or official recognition of validity of studies in terms of the General Education Law and that have authorization to receive deductible donations, in accordance with the referred ISR Law, provided that the income received corresponds to payments by concept of enrollment fee and tuition made by students who are enrolled in the educational institutions in question, since said income is considered recovery quotas.

Origin

First antecedent

53/2002/ISR

Official Letter 325-SAT-IV-B-75015 of December 16, 2002.

32/ISR/N

Prizes for attendance and punctuality. They are not benefits of a nature analogous to social security.

Article 93, Section VIII of the ISR Law establishes that no tax will be paid for the obtaining of income received by reason of subsidies for incapacity, educational scholarships for workers or their children, daycares, cultural and sports activities, and other social security benefits, of an analogous nature, that are granted generally, in accordance with the laws or by employment contracts.

Article 7, penultimate paragraph of said Law provides that social security is considered to be expenditures made by employers in favor of their workers, which have the object of satisfying present or future contingencies or needs, as well as granting benefits in favor of said workers tending to their physical, social, economic, or cultural improvement, which allow them the improvement of their quality of life and that of their family.

In such virtue, prizes granted to workers by concept of punctuality and attendance, being conferred as an incentive to those workers who are in such scenarios, do not have an analogous nature to the exempt incomes established in Article 93, Section VIII of the ISR Law, because their purpose is not to face future contingencies nor are they conferred generally.

Origin

First antecedent

118/2001/ISR

Official Letter 325-SAT-A-31373 of December 12, 2001. Compilation of Normative Criteria. Criteria are made known.

33/ISR/N

Social Security. Compliance with the generality requirement.

Article 93, Section VIII of the ISR Law establishes that no ISR will be paid for those incomes obtained by reason of subsidies for incapacity, educational scholarships for workers or their children, daycares, cultural and sports activities, and other social security benefits, of an analogous nature, that are granted generally, in accordance with the laws or by employment contracts.

It is considered that the generality requirement referred to in the aforementioned Article, is fulfilled when certain social security benefits are granted to all workers who fall into the scenario that gave rise to said benefit.

Consequently, taxpayers will not pay ISR for incomes obtained by reason of social security benefits, when they are granted to all workers who have the right to said benefit, in accordance with the laws or by employment contracts.

Origin

First antecedent

2008

Official Letter 600-04-02-2008-77251 of December 12, 2008, through which the normative criteria approved up to December 2008 are made known. Official Letter 600-04-02-2009-73416 of January 7, 2009, through which Bulletin 2008 is made known, with normative criterion number 7/2008/ISR.

34/ISR/N

Incomes from alienation of real estate intended as a primary residence.

Article 93, Section XIX, subsection a) of the ISR Law establishes that no ISR will be paid for the obtaining, among others, of incomes derived from the alienation of a primary residence, provided that the amount of the consideration obtained does not exceed seven hundred thousand UDIS and the transfer is formalized before a public notary.

The exemption provided in Article 93, Section XIX, subsection a) of the ISR Law, refers to the scenario where only part of the surface of the real estate is intended as a primary residence and the other is used for a diverse purpose or is not exclusively intended for residential use; ISR will be paid only for the part that does not correspond to the surface intended as a primary residence.

Article 129 of the Regulations of the ISR Law provides that, for the purposes of this same exemption, the primary residence also includes the land where it is built, provided that the surface of said land does not exceed three times the area covered by the constructions that integrate the primary residence.

For the foregoing, to carry out the calculation of the surface of the land specified in the previous paragraph, the area covered by constructions intended for a purpose diverse from residential use should not be taken into account.

Origin

First antecedent

Official Letter 325-A-VII-10973 of December 3, 1996, through which various normative criteria are made known.

35/ISR/N

Tips. They constitute an income for the worker.

Article 94, first paragraph of the ISR Law establishes that incomes from the provision of a subordinate personal service are considered to be salaries and other benefits that derive from an employment relationship, including the participation of workers in the profits of the companies and the benefits received as a consequence of the termination of the employment relationship.

In accordance with Article 96 of the ISR Law, regarding the tax that results to the charge of the worker, the withholding will be calculated by applying to the total of the incomes obtained in a calendar month the tariff referred to in said legal provision.

Article 346 of the Federal Labor Law states that tips received by workers in hotels, assisted living homes, restaurants, diners, cafes, bars, and other analogous establishments, are part of the salary of the

worker.

For the above reason, the aforementioned tips granted to workers must be considered by the employer to calculate and withhold the ISR (Income Tax) that, if applicable, is owed by the worker, under the terms of Article 96 of the ISR Law.

Origin

First antecedent

9/93

Office 325-A-VII-5840 of June 25, 1993.

36/ISR/N

Subsidy for employment. It is feasible to recover the uncredited balance via refund.

Article Tenth, fraction III, first paragraph of the Decree by which various provisions of the VAT Law; the IEPS Law; the LFD are reformed, added to, and repealed; the ISR Law is issued; and the Law on the Corporate Income Tax at a Single Rate and the IDE Law are abrogated, published in the DOF on December 11, 2013, establishes for those making payments to taxpayers entitled to the employment subsidy, the option to credit against the ISR owed by them or withheld from third parties, the amounts they deliver to taxpayers for this concept, when they comply with the requirements established for this purpose by said numeral.

Article 22 of the CFF states that tax authorities will refund amounts paid improperly and those that proceed in accordance with tax laws.

The Supreme Court of Justice of the Nation, through thesis 2a. XXXVIII/ 2009 visible in the Judicial Seminary of the Federation and its Gaceta Tomo: XXIX, April 2009, Page: 733, Ninth Era, determined that the mechanism chosen by the legislator to recover amounts paid by the employer tends to prevent the employer from absorbing them affecting its patrimony, on the condition that the corresponding credit is made only against the ISR, hence that tax figure is only provided with respect to amounts paid for the concept of employment subsidy and, therefore, the difference arising from its subtraction is not regulated in said legal provisions but in Article 22 of the CFF, which establishes the proceeding of refund of amounts paid improperly or in excess; therefore, if within the deadlines in which the tax owed or withheld from third parties must be paid, the employer has a credit balance derived from exhausting the ISR credit scheme, they can request it under the terms of the indicated Article 22.

Under this context, in cases where there is a remaining balance of employment subsidy paid to workers resulting from exhausting the ISR credit scheme owed or withheld from third parties, it will be subject to refund, in accordance with Article 22 of the cited Code.

Origin

First antecedent

2009

Office 600-04-02-2009-77370 of November 25, 2009, through which the normative criteria approved in the second semester of 2009 are made known. Office 600- 04-02-2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with normative criterion number 73/2009/ISR.

37/ISR/N

Shares issued by foreign societies listed on concessioned stock exchanges. Their alienation is subject to a rate of 10%.

Article 129, fraction I of the ISR Law provides that natural persons will be obligated to pay the ISR, the payment of which will be considered definitive, applying a rate of 10% to the gains obtained in the exercise derived from the alienation of shares issued by foreign societies listed on concessioned stock exchanges or recognized derivative markets under the terms of the LMV.

Article 9, third paragraph of the LMV, of supplementary application to tax provisions in accordance with Article 5th, second paragraph of the CFF, indicates that intermediation activities with securities operated abroad or issued under foreign laws, susceptible of being listed in the International Quotation System of a stock exchange, can only be provided through said system.

In accordance with its regulations, the Mexican Stock Exchange and the Institutional Stock Exchange, respectively, have a list integrated by the section of securities authorized to quote in the International Quotation System.

In this sense, the gains obtained in the exercise derived from the alienation of shares issued by foreign societies listed in the section of securities authorized to quote in the International Quotation System of the Mexican Stock Exchange or the Institutional Stock Exchange, respectively, are subject to a rate of 10% under the terms of Article 129, fraction I of the ISR Law, regardless of whether their alienation is not carried out through an intermediary of the Mexican securities market.

Origin

First antecedent

2014

Office 600-04-07-2014-6961 of October 2, 2014, through which the normative criteria approved in the third quarter of 2014 are made known. Office 600-04-07- 2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 46/2014/ISR.

38/ISR/N

Distributed dividends or profits. Accumulation to other income by natural persons.

Article 140, first paragraph of the ISR Law establishes that natural persons must accumulate to their other income, those received by dividends or profits.

The same article, in its fifth paragraph, provides that for the effects of said numeral, distributed dividends or profits are also considered the fiscal profit determined, even presumptively, by the tax authorities, as established by Article 140, fraction V of the ISR Law.

In this sense, it is considered that natural persons are obligated to accumulate to their other income, as distributed dividends or profits, all the scenarios provided in the different fractions of Article 140 of the ISR Law, including those provided in the referred fraction V.

Origin

First antecedent

2010

Office 600-04-02-2010-70388 of December 14, 2010, through which the normative criteria approved in the second semester of 2010 are made known. Office 600- 04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with normative criterion number 72/2010/ISR.

39/ISR/N

Distributed dividends or profits paid by a society. Accumulation of other income of natural persons.

Article 140, first and fourth paragraphs of the ISR Law establish that natural persons must accumulate to their other income, those received by distributed dividends or profits and that this income is received by the owner of the security title or in case of social shares, the person who appears as the holder thereof.

The same Article 140, in its fifth paragraph, fractions IV, V and VI of the ISR Law determines that distributed dividends or profits are considered, among others, the omissions of income or purchases not made and improperly registered; the fiscal profit determined, even presumptively, by the tax authorities, as well as the modification to the fiscal profit derived from the determination of accumulative income and authorized deductions in operations carried out between related parties, made by said authorities.

Consequently, in cases where a legal entity is located in any of the scenarios provided in fractions IV, V or VI of the article cited in the previous paragraph, it must be considered income for each of the natural persons owning the security title or who appear as holders of the social shares of the legal entity to which distributed dividends or profits were determined, in the same proportion in which they are owners of said titles or social shares.

Origin

First antecedent

2011

Office 600-04-02-2011-57051 of July 25, 2011 through which the normative criteria approved in the first quarter of 2011 are made known. Office 600-04-02-2011-58911 of December 9, 2011 through which Bulletin 2011 is made known, with normative criterion number 69/2011/ISR.

40/ISR/N

Distributed dividends or profits. Moment of accumulation of income of natural persons.

Article 140, first and fourth paragraphs of the ISR Law establish that natural persons must accumulate to their other income, those received by distributed dividends or profits and that this income is received by the owner of the security title or holder of the social shares.

Article 140, in its fifth paragraph, fractions IV, V and VI of the cited Law, considers as distributed dividends or profits the omissions of income or purchases not made and improperly registered; the fiscal profit determined, even presumptively by the tax authorities; as well as the modification to the fiscal profit derived from the determination of accumulative income and authorized deductions in operations carried out between related parties made by said authorities.

Article 6th, first paragraph of the CFF provides that contributions are caused in accordance with the legal or factual situations realized, provided in the current tax laws during the period in which they occur.

Consequently, regarding income of natural persons by distributed dividends or profits, it is considered that they are accumulative at the moment when any or each one of them, in its case, of the legal scenarios provided in Article 140, fifth paragraph, fractions IV, V or VI, respectively, of the ISR Law is generated.

Origin

First antecedent

2011

Office 600-04-02-2011-57051 of July 25, 2011, through which the normative criteria approved in the first quarter of 2011 are made known. Office 600-04-02-2011-58911 of December 9, 2011, through which Bulletin 2011 is made known, with normative criterion number 70/2011/ISR.

41/ISR/N

Refund of credit balances to natural persons. Credit of ISR paid by the person who distributed the dividends.

In accordance with Article 140 of the ISR Law, natural persons who receive dividends can credit against the tax determined in their annual declaration, the ISR paid by the society that distributed dividends or profits.

Article 152, penultimate paragraph of the ISR Law establishes that, in cases where the tax owed by the taxpayer is less than the amount to be credited under the terms of said article, only the refund or compensation of the tax effectively paid or that would have been withheld can be requested.

Therefore, it is viable that natural persons who receive dividends or profits request, if applicable, the refund of the credit balance derived from the credit of ISR effectively paid by societies that distribute said dividends or profits.

Origin

First antecedent

22/2001/ISR

Office 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

42/ISR/N

Loans to partners and shareholders. Considered dividends.

Article 140, fractions II and III of the ISR Law considers as distributed dividends or profits, the loans made to partners or shareholders that do not meet the requirements indicated in the cited provision and the non-deductible expenditures made in favor of the same.

Under the terms of Article 10 of the same Law, legal entities that distribute dividends or profits that do not come from the Net Fiscal Profit Account, must calculate the tax corresponding.

Derived from the fact that the application of the income typified as distributed profits under the terms of Article 140, fractions II and III of the ISR Law, do not come from the Net Fiscal Profit Account, therefore, the provisions of Article 10 of the aforementioned Law must be followed.

Origin

First antecedent

3.5.6.

Office 102-SAT-13 of July 4, 1997, through which the Compilation of Substantive Internal Tax Normativity is issued.

43/ISR/N

Distribution of dividends. Amount of ISR credit that natural persons have the right to apply in the year declaration, when receiving dividends from a legal entity dedicated exclusively to agricultural, livestock, fishing or forestry activities.

Article 140 of the ISR Law establishes the obligation for natural persons to accumulate to their other income, those received by dividends or profits. The cited article provides that natural persons who accumulate and opt to credit against the tax determined in their annual declaration, the ISR paid by the society that distributed the dividends or profits, to calculate the tax paid by the society, will apply the rate indicated in Article 9 of the ISR Law and the factor indicated in Article 140 of said Law, without indicating any exception to such scenario.

For the above reason, notwithstanding that said dividend or profit may come from a legal entity dedicated exclusively to agricultural, livestock, fishing or forestry activities that to calculate the ISR corresponding to said dividend or distributed profit, has applied the reduced factor indicated in the second paragraph of Article 10 of the Law in question; the referred legal entities will calculate the tax paid by the society referred to in Article 140, first paragraph of said Law, in accordance with what is indicated in this provision.

Origin

First antecedent

63/2007/ISR

Office 325-SAT-09-04-B-90015 of December 14, 2007, through which Bulletin 2007 is made known.

44/ISR/N

Natural persons. Income received by fiscal incentives, considered received at the moment that patrimony is increased.

Article 141 of the ISR Law provides that natural persons who obtain income different from those indicated in Chapters I to VIII of Title IV of the same Law, will consider them received in the amount in which at the moment of obtaining them they increase their patrimony, with the exception of the cases indicated in the own article.

Article 1st, first paragraph of the CFF stipulates that the provisions of said order apply in defect of tax laws and without prejudice to what is provided by international treaties in which Mexico is a party.

Article 6th, first paragraph of the CFF provides that contributions are caused in accordance with the legal or factual situations realized, provided in the current tax laws during the period in which they occur.

Thus, regarding fiscal incentives, the corresponding tax is caused when in terms of what is provided by Article 141 of the ISR Law, the income obtained by this concept increases the patrimony of the taxpayer.

Origin

First antecedent

2009

Office 600-04-02-2009-75488 of July 13, 2009, through which the normative criteria approved in the first semester of 2009 are made known. Office 600-04-02- 2009-78112 of December 1, 2009, through which Bulletin 2009 is made known, with normative criterion number 78/2009/ISR.

45/ISR/N

Derivative financial operations in which differences are settled during their term. It is considered that there is a maturity in each settlement regarding the amount of the settled difference.

Article 146, fifth paragraph of the ISR Law establishes that for the effects of said article, it is understood that the gain obtained or the loss generated is that which, among others, is realized at the moment of the maturity of the derivative financial operation, regardless of the exercise of the rights established in the same operation.

Articles 16-A, fraction II of the CFF and 20, fraction VII and fifth and sixth paragraphs of the ISR Law, recognize that there are derivative financial operations in which differences are settled during their term. An effect of the settlement of such differences is that these operations do not have a single maturity, but a maturity in each settlement regarding the amount of the settled difference.

Consequently, for the effects of Article 146, fifth paragraph of the ISR Law, in derivative financial operations in which differences are settled during their term, it is considered that the derivative financial operation in question has a maturity in each settlement regarding the amount of the settled difference.

Origin

First antecedent

2013

Office 600-04-02-2013-11156 of April 22, 2013, through which the normative criteria approved in the first quarter of 2013 are made known, office 600-04-07- 2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 95/2013/ISR.

46/ISR/N

Deductible of medical expense insurance. Not a personal deduction.

Article 151, fractions I and VI of the ISR Law establishes as personal deductions payments for medical, dental, professional services in psychology and nutrition provided by persons with a professional title legally issued and registered by the competent educational authorities, as well as hospital expenses, and premiums for medical expense insurance.

In the insurance contract, the insurance company obligates itself, through a premium, to compensate for a damage or to pay a sum of money; likewise, the insurance policyholder is obligated to pay the deductible stipulated in said insurance contract in accordance with Articles 1 and 86 of the Law on the Insurance Contract.

Therefore, the payment of the deductible of medical expense insurance is not a medical expense, nor is it a premium for said insurance, in virtue of being expenditures made as a counter-performance of the services granted by the insurance company in accordance with the Law on the Insurance Contract and therefore, they cannot be considered as a personal deduction for ISR purposes.

Origin

First antecedent

117/2001/ISR

Office 325-SAT-A-31373 of December 12, 2001. Compilation of Normative Criteria. Criteria are made known.

47/ISR/N

Income from fees and in general from the provision of a professional service, for the effects of Title V of the ISR Law.

Article 175, fraction II of the ISR Law establishes that for the effects of Title V of said Law, income from fees and in general from the provision of a professional service are considered those indicated in Article 100 of the same law; this latter article, indicates what income will be considered for business activities - fraction I - and which, for the provision of a professional service - fraction II - .

Article 175, fraction VI of the ISR Law provides what, for effects of Title V of the cited law, is considered income from business activities.

Therefore, the referral of Article 175, fraction II of the ISR Law to the income indicated in Article 100 of the same legal order, must be understood as made to the income from the provision of a professional service, referred to in fraction II of the last article referred.

Origin

First antecedent

2012

Office 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known. Office 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 91/2012/ ISR.

48/ISR/N

Maquila operation for the effects of the ISR Law. Scope of the concept transformation.

Article 181, second paragraph of the ISR Law establishes that for the effects of said article, a maquila operation is considered that which fulfills, among other conditions, the established in fraction I, first paragraph of said article, consisting in that the merchandise referred to in said fraction that is subjected to a process of transformation or repair, is temporarily imported and returned abroad.

The third paragraph of the cited fraction establishes that transformation is considered, the processes that are carried out with the merchandise consisting of: dilution in water or other substances; washing or cleaning, including the removal of rust, grease, paint or other coatings; the application of preservatives, including lubricants, protective encapsulation or paint for conservation; adjustment, filing or cutting; dosing; packing, repacking, boxing or re-boxing; submission to tests, and marking, labeling or classification, as well as the development of a product, except when it comes to brands, commercial signs and trade names.

From the analysis of said paragraph, it emerges that it states that such processes are estimated as transformation processes; that is, they are additional to the industrial transformation process considered in itself referred to in the first paragraph of the analyzed fraction.

Therefore, the concept transformation referred to in Article 181, second paragraph, fraction I of the ISR Law, comprises the process by which an input is modified, altered, changes shape or is incorporated into another input, as well as the processes established in the third paragraph of said fraction.

Origin

First antecedent

2012

Office 600-04-02-2012-68776 of October 22, 2012, through which the normative criteria approved in the third quarter of 2012 are made known. Office 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 92/2012/ ISR.

49/ISR/N

Maquila operation for the effects of the ISR Law. Merchandise with which the transformation or repair processes must be carried out.

Article 181, second paragraph, fraction IV of the ISR Law establishes that the maquila operation must fulfill, among other conditions, that the transformation or repair processes are carried out with machinery and equipment owned by the resident abroad with which companies with a Maquila Program authorized by the Ministry of Economy have celebrated the maquila contract.

To carry out the manufacturing operation processes, Article 4, fraction III, inciso a) of the Decree for the Maquiladora Manufacturing and Export Services Industry, published in the DOF on November 1, 2006, refers to a list of merchandise that companies with said program can temporarily import to carry out the referred processes. Within this list are, in addition to machinery and equipment, the following merchandise: tools, instruments, molds and spare parts destined for the productive process.

Therefore, the machinery and equipment provided in Article 181, second paragraph, fraction IV of the ISR Law do not include tools, instruments, molds and spare parts destined for the productive process, to which

refers to article 4, fraction III, subsection a) of the aforementioned Decree.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-68776 of October 22, 2012, through which the normative criteria approved in the third quarter of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 93/2012/ ISR.

50/ISR/N

Maquila operations for the purposes of the IMMEX Decree. Percentage of machinery and equipment used.

Article two, first paragraph of the Decree granting tax incentives to the manufacturing, maquila, and export services industry, published in the DOF on December 26, 2013, provides that taxpayers who, as of December 31, 2009, had complied with their obligations regarding Income Tax (ISR), in accordance with article 216 Bis of the ISR Law, in effect until December 31, 2013, will have a period of two years counted from the entry into force of the aforementioned Decree, that is, January 1, 2016, so that, at least, 30% of the machinery and equipment used in the maquila operation referred to in article 181, fraction IV, first paragraph of the ISR Law, in effect from January 1, 2014, is owned by the foreign resident with whom the maquila contract has been celebrated and that has not been owned by the resident company in Mexico that carries out the maquila operation or any related party thereof.

In this sense, article two, first paragraph of the analyzed Decree does not condition that the remaining 70% of the machinery and equipment used in said maquila operation must be owned by the foreign resident with whom the maquila contract has been celebrated nor that said machinery and equipment has been owned by the resident company in Mexico that carries out the maquila operation or any related party thereof.

Therefore, in accordance with the aforementioned article two, first paragraph, the remaining 70% of the machinery and equipment used in the maquila operation of taxpayers who, as of December 31, 2009, had complied with their obligations regarding Income Tax in accordance with article 216 Bis of the ISR Law, in effect until December 31, 2013, may or may not be owned by them; by their related or independent parties; by the foreign resident with whom the maquila contract has been celebrated; or by the related or independent parties of said resident.

Origin

First antecedent

2014

Official Letter 600-04-07-2014-6961 of October 2, 2014, through which the normative criteria approved in the third quarter of 2014 are made known.

Official Letter 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 60/2014/ISR.

51/ISR/N

Update. Not considered taxable income for the purposes of calculating ISR.

In accordance with article 17-A of the CFF, the update has the purpose of recognizing the effects that values suffer due to the passage of time and changes in prices in the country.

Consequently, the amount of the update corresponding to refunds, benefits, and compensation of balances in favor of the taxpayer and owed to the federal treasury, should not be considered as taxable income for the purposes of calculating ISR.

Origin

First antecedent

2.1.2.

Official Letter 325-SAT-IV-C-7363 of September 23, 1997.

52 /ISR/IETU/N

Credit of ISR against IETU at the request of the taxpayer, when there are determining resolutions.

Article 8, first, second, and fifth paragraphs of the IETU Law, in effect until December 31, 2013, establishes that taxpayers may credit against the IETU of the exercise, an amount equivalent to the ISR of the same exercise, which has been effectively paid.

Therefore, if as a result of the authority's verification powers, the omission of payment of ISR is observed, the determination of said tax, as well as the IETU, without carrying out the credit provided for in the legal provision in question, is legal, considering that this proceeds on the ISR effectively paid.

Regarding this, it is specified that IETU as a complementary tax should only be paid in cases where, for any reason, ISR is not paid or a smaller amount than the IETU owed is paid; therefore, when the taxpayer has not credited the ISR effectively paid, it is considered that this does not lose the right to credit it against the IETU determined to their charge.

For the above, it is considered that when there are determining resolutions for the omission in the payment of ISR and IETU, the executing authority may carry out the credit of the ISR effectively paid against the IETU at the request of the taxpayer.

Origin

First antecedent

Fifth Resolution of Modifications to the RMF for 2015

Published in the DOF on November 19, 2015, Annex 7, published in the DOF on November 20, 2015.

53/ISR/N

Moment when a dividend or profit distributed through the delivery of shares of the same legal entity is considered received for the purposes of accumulation to other income of individuals and the application of the additional 10% tax.

Article 10, second paragraph of the ISR Law states that regarding the distribution of dividends or profits through the increase in social shares or the delivery of shares of the same legal entity or when reinvested in the subscription and payment of the capital increase of the same legal entity within the thirty natural days following their distribution, the dividend or profit will be understood as received in the calendar year in which the reimbursement is paid for the reduction of capital or for the liquidation of the legal entity in question, in accordance with article 78 of said Law.

For its part, article 140, first paragraph of the ISR Law establishes that resident individuals in Mexico must accumulate to their other income, those received as dividends or profits distributed by legal entities resident in Mexico.

Additionally, the second paragraph of said article establishes an additional tax of 10% that must be withheld by the legal entity resident in Mexico that distributes said dividend or profit. Likewise, article 164, fraction I, fifth paragraph of the ISR Law establishes that legal entities resident in Mexico must withhold the tax obtained by applying the 10% rate on the dividends or profits they distribute to residents abroad.

Consequently, since dividends or profits distributed in the manner provided for in article 10, second paragraph of the ISR Law, are considered received until the moment the reimbursement is paid for the reduction of capital or by the liquidation of the legal entity, the additional tax of 10% referred to in articles 140, second paragraph and 164, fraction I, fifth paragraph of the ISR Law, will not be incurred at the moment said distribution is made, but until they are considered received in accordance with the first provision mentioned. At this same moment, individuals will accumulate said income in accordance with the terms provided in article 140, first paragraph of the ISR Law.

It is specified that the shares received in accordance with the aforementioned paragraphs will not have a proven acquisition cost in accordance with article 23, penultimate paragraph of the ISR Law.

Origin

First antecedent

RMF for 2017

Published in the DOF on December 23, 2016, Annex 7, published in the DOF on December 27, 2016.

54/ISR/N

Packing gas. The gas used in the natural gas transportation service has the nature of a fixed asset.

Article 32, second paragraph of the ISR Law establishes that a fixed asset is considered to be the set of tangible goods that taxpayers use for the realization of their activities and that deteriorate due to use in the taxpayer's service and the passage of time; the acquisition or manufacture of these goods will always have as its purpose the use of said goods for the development of activities, and not that of being alienated within the normal course of their operations.

Article 35, fraction VI of the ISR Law establishes that, regarding fixed assets destined to fixed infrastructure for the transportation, storage, and processing of hydrocarbons, the maximum annual deduction rate applicable is 10%.

For its part, packing gas is part of the fixed infrastructure used in natural gas transportation, as its purpose is to establish the system in its operational capacity; likewise, packing gas must remain within the system to maintain said capacity, so it is not used as fuel or alienated within the normal course of its operations.

For the above, packing gas falls under the hypothesis provided for in article 35, fraction VI of the ISR Law, so it will be deducted at the maximum rate of 10% annually on the original amount of the investment.

Origin

First antecedent

RMF for 2018

Published in the DOF on December 22, 2017, Annex 7, published in the DOF on December 29, 2017.

55/ISR/N

Business benefits for the purposes of double taxation avoidance treaties and their relationship with article 175, fraction VI of the ISR Law.

Rule 2.1.32., for the purposes of article 7 of the double taxation avoidance treaties that Mexico has in force, the term "business benefits" will be understood as the income generated by the activities referred to in article 16 of the CFF.

For its part, the general definition articles of the double taxation avoidance treaties that Mexico has in force establish that for the application of said treaties, any term or expression not defined will have, unless a different interpretation can be inferred from its context, the meaning attributed to it by the internal legislation relating to the taxes that are the object of the treaty.

Regarding this, article 175, fraction VI of the ISR Law establishes that income from business activities will be considered those derived from the activities referred to in article 16 of the CFF and that income referred to in articles 153 to 173 of the aforementioned Law is not understood to be included. However, said provision expressly establishes in its first paragraph that this case is only applicable for the purposes of Title V of the same order.

Consequently, for the purposes of the double taxation avoidance treaties that Mexico has in force, rule 2.1.32. is the provision of the internal legislation that determines what will be understood by "business benefits".

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2018

Published in the DOF on November 30, 2018, Annex 7, published in the DOF on the same November 30, 2018.

56/ISR/N

Authorization. Requirements to be an authorized donee.

Article 82, fraction I of the ISR Law, provides that to be considered as institutions authorized to receive deductible donations, non-profit legal entities must exclusively carry out the activity of their social object that is located in any of the cases established by the ISR Law in accordance with what is established in articles 79, fractions VI, X, XI, XII, XVII, XIX, XX, and XXV, 82, penultimate paragraph of the ISR Law, as well as 36, second paragraph and 134 of its Regulation, that is, they will only have to carry out the assistance, educational, scientific or technological research, cultural, ecological, species preservation in danger of extinction, scholarships, public works or services, social development, economic support, private museums and libraries activity.

Additionally, said article 82, in its fraction IV states that non-profit legal entities must dedicate their assets exclusively to the purposes of their social object, for which they have been authorized to receive ISR deductible donations, not being able to grant benefits on the distributable remainder to any individual or any of its members, individuals or legal entities, unless it is, in the latter case, some of the legal entities or trusts authorized to receive tax-deductible donations or it is the remuneration of services effectively received.

Likewise, the same article 82, fraction V, determines that non-profit legal entities at the time of their liquidation or change of residence for tax purposes, must dedicate the entirety of their assets to other entities authorized to receive donations.

In the event that the authorization to receive deductible donations granted to the Association is revoked, its validity has concluded, or its cancellation has been requested and has not been obtained or renewed again, within twelve months following the date on which any of said events occur, the entirety of its assets must be dedicated to other entities authorized to receive deductible donations, within 6 months following, counted from when the term to obtain the authorization again concluded, provisions that must be recorded irrevocably in their social statutes.

Article 5 of the CFF establishes that tax provisions that establish burdens on individuals indicate the subject, object, base, rate or tariff of a contribution and the exceptions to it, must be applied strictly, while the interpretation of the rest of the tax provisions may be carried out applying any other method of legal interpretation. In this sense, the Supreme Court of Justice of the Nation considers that the circumstance that certain provisions of a tax nature are strictly applicable, does not prevent the interpreter from resorting to the various methods that allow knowing the true intention of the creator of the norms, when from their literal analysis the words used, whether technical or common usage, and uncertainty can be generated about their meaning.

From the interpretation of the aforementioned provisions, it is understood that the social object or authorized purpose corresponds to the activity that the tax authority verified is located in the cases contemplated in the tax provisions as susceptible to being authorized in accordance with the ISR Law, which is contained in the corresponding authorization letter.

In the social statutes or trust contract respectively, of non-profit legal entities or trusts, both activities susceptible to being authorized in accordance with the ISR Law and others not related to said purpose can be established; however, this does not prevent obtaining the authorization, provided that said activities do not have economic purposes and are carried out exclusively to achieve the authorized social object.

In this sense, when the case mentioned in the previous paragraph occurs, it can be considered that the requirements to be an authorized donee provided for in article 82, fraction I of the ISR Law are met, and therefore civil organizations and trusts can obtain authorization to receive deductible donations, provided that they do not carry out any act or activity that contravenes the non-economic nature of authorized donees or the applicable legal provisions to the regime of authorized donees.

Origin

First antecedent

RMF for 2020

Published in the DOF on December 29, 2019, Annex 7, published on January 9, 2020.

57/ISR/N

Donations granted by Authorized Donees to foreign organizations

Article 82, penultimate paragraph of the ISR Law, provides that foundations, trusts, and other entities may obtain authorization to receive deductible donations when their social object consists of economically supporting the activities of other authorized donees in terms of the Law itself, provided that they dedicate the entirety of their income to the authorized activities.

For its part, article 22, paragraphs 2 and 3 of the Agreement between the Government of the United Mexican States and the Government of the United States of America to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes, establishes complementary provisions to those of the internal legislation of Mexico and the United States of America, insofar as they regulate the elements for the reciprocal recognition of donees, which is subject to the limits established by the Agreement itself as well as the internal provisions of each country, this by allowing to consider deductible the donations that a resident of the United States of America makes to authorized donees of Mexico that meet certain requirements and those that residents of Mexico make to public charity institutions authorized in the United States of America, as deductible in Mexico.

In this sense, unlike what happens with the provisions of article 22, paragraph 2 of the Agreement, paragraph 3 of the aforementioned article does not establish the possibility that foundations, trusts, and other entities whose purpose is to economically support the activities of authorized donees referred to in article 82, penultimate paragraph of the ISR Law, can make donations to public charity institutions or private foundations of the United States of America, as in case they do so, it would be considered non-deductible expenditures which would involve the determination of the distributable remainder from which payment must be made in accordance with what is stated in article 79 of the LISR.

58/ISR/N

Benefits of the double taxation avoidance treaty between Mexico and Qatar. Interpretation of the Spanish and English texts.

Article 4, first paragraph of the ISR Law establishes that the benefits of double taxation avoidance treaties will only be applicable to taxpayers who comply, among others, with the provisions of the treaty itself.

The authentic text in Spanish of article 11, paragraph 3, subsection b) of the Agreement between the Government of the United Mexican States and the Government of the State of Qatar to Avoid Double Taxation and Prevent Fiscal Evasion in Matters of Income Taxes, published in the DOF on March 8, 2013, establishes that notwithstanding what is stated in paragraph 2 of said article, the interests referred to in paragraph 1 can only be subject to taxation in the Contracting State in which the beneficial owner resides if, in the case of Qatar, the entities indicated in said subsection or any other that is agreed upon between the competent authorities of the Contracting States, are wholly or partially owned by Qatar.

In the authentic text in English, which is registered by the Secretariat of Foreign Relations, the provision in question states that said interests can only be subject to taxation in the Contracting State in which the beneficial owner resides if, "... in the case of Qatar, the following entities as long as they are wholly owned by Qatar".

From the authentic texts in Spanish and English of the subsection mentioned, a divergence arises, as the text in English contains the phrase "as long as they are wholly owned by Qatar", from which it can be interpreted that the ownership in the entities indicated by the Government of Qatar must be total; however, the Spanish text refers "while they are wholly or partially owned by Qatar".

Likewise, the final part of the authentic texts in Spanish and English of the Agreement in question establishes that, in case of any divergence, the English text will prevail.

Therefore, for the purposes of article 4, first paragraph of the ISR Law, the compliance with what is established in article 11, paragraph 3, subsection b) of the aforementioned Agreement must be carried out in accordance with the authentic text in English of subsection b) of the paragraph and article mentioned.

III.

Criteria of the VAT Law

1/IVA/N

The consideration paid with shares or social parts for in-kind contributions to commercial societies is considered effectively collected with the delivery of the same.

Article 1, fraction I of the VAT Law establishes that individuals and legal entities that, within national territory, carry out, among other acts or activities, the alienation of goods are obligated to pay VAT.

In accordance with article 8 of the same law, in relation to article 14, fraction III of the CFF, the contribution to a society or association is understood as alienation.

Article 11 of the VAT Law states that the alienation of goods is considered carried out at the moment when the considerations are effectively collected and on the amount of each of them.

In this vein, article 1-B of the aforementioned law, provides that considerations are considered effectively collected when received in cash, in goods, or in services, even if they correspond to advances, deposits, or any other concept regardless of the name by which they are designated; or when the creditor's interest is satisfied through any form of extinction of the obligations that give rise to the considerations.

Likewise, it is presumed in terms of the third paragraph of said article, that credit titles other than checks subscribed in favor of taxpayers, by whom the good is acquired, the service is received, or the good is used or enjoyed temporarily, constitutes a guarantee of the payment of the agreed price or consideration, as well as the VAT corresponding to the operation in question. Understood as received both concepts by the taxpayers when they effectively collect them, or when the taxpayers transmit to a third party the documents pending collection, except when said transmission is in procuration.

Therefore, when a society issues shares or social parts in favor of the shareholder or partner who made the in-kind contribution, for the purposes of the VAT Law, said consideration will be effectively collected at the moment when the first legal act occurs that grants the quality of partner or shareholder regarding said contribution, due to the presumption established in article 1-B, third paragraph of the law in question, does not apply to shares or social parts, since they constitute goods by their nature for which they are not delivered as guarantee.

2/IVA/N

Indemnification for unpaid check. The amount thereof is not subject to VAT.

Article 1 of the VAT Law establishes that natural and legal persons who, within national territory, alienate goods, provide independent services, grant the temporary use or enjoyment of goods, or import goods or services are obligated to pay said tax.

Article 193 of the General Law of Negotiable Instruments and Credit Operations provides that the issuer of a check presented on time and unpaid, due to causes attributable to the issuer itself, shall compensate the holder for the damages and losses caused thereby, and that in no case shall the indemnification be less than twenty percent of the value of the check.

Consequently, in the event that a check issued to cover the value of acts or activities taxed by the VAT Law is not paid due to causes attributable to the issuer and, consequently, the holder receives the indemnification established in Article 193 of the General Law of Negotiable Instruments and Credit Operations, such indemnification will not form part of the base for the calculation of VAT, because it does not derive from the act or activity carried out by the holder, but from the application of the General Law of Negotiable Instruments and Credit Operations.

Origin

First antecedent

Supplement 38

Page 24 of the Manual of Legal Complementation of VAT 1988,

criteria 5.1.4 contained in office

325-SAT-IV-C-7363 of September 23,

1997, through which the

First Update of the Compilation of

Substantive Internal Taxes is issued.

3/IVA/N

VAT withholdings. They do not apply to services provided as a business activity.

Article 1o.-A, fraction II, subsection a) of the VAT Law establishes that legal persons who receive personal independent services, or use or temporarily enjoy goods provided or granted by natural persons, are obligated to withhold the tax transferred to them.

Article 14, last paragraph of the same law defines that the provision of independent services has the characteristic of being personal when it does not have the nature of a business activity.

Therefore, regarding the provision of services, the withholding of VAT will only be carried out when the service is considered personal, that is, it does not have the characteristic of a business activity, in terms of Article 16 of the Federal Tax Code (CFF).

Origin

First antecedent

25/2001/IVA

Office 325-SAT- A-31123 of September 14,

2001 through which the new Compilation of

Normative Criteria 2001 is made known.

4/IVA/N

Messenger and package services. They are not subject to VAT withholding.

Article 1o.-A, fraction II, subsection c) of the VAT Law establishes that taxpayers who are legal persons receiving land freight transport services provided by natural or legal persons are obligated to effect the withholding of the tax transferred to them.

Article 5o., second paragraph of the CFF provides that in the absence of an explicit tax norm, the provisions of federal common law will apply supplementarily when their application is not contrary to the proper nature of tax law.

Article 2o., fraction VII of the Federal Highways, Bridges and Federal Ground Transport Law determines that auxiliary services are those that, without forming part of the federal ground transport of passengers, tourism, or cargo, complement its operation and exploitation.

Article 52, fraction V of the Federal Highways, Bridges and Federal Ground Transport Law, identifies messenger and package services as an auxiliary service to federal ground transport.

Therefore, it is considered that legal persons who receive messenger or package services provided by natural or legal persons do not fall under the legal situation established in Article 1-A, fraction II, subsection c) of the VAT Law, regarding the obligation to effect the withholding of the tax transferred, since such messenger or package services do not constitute a federal ground freight transport service, but an auxiliary service to it, in accordance with the Federal Highways, Bridges and Federal Ground Transport Law.

Origin

First antecedent

138/2004/IVA

Office 325-SAT-IV-B-92423 of December 17, 2004, through which

the First Modification to the

compilation of normative criteria is issued,

Bulletin 2004.

5/IVA/N

Transmission of debts. Moment when the consideration is considered effectively collected and the tax paid.

Article 1o.-B, last paragraph of the VAT Law establishes that when, due to the alienation of goods, taxpayers receive documents or vouchers regarding which a third party assumes the payment obligation, it will be considered that the value of the respective activities, as well as the corresponding VAT, was effectively paid on the date such documents are received or accepted by the taxpayers.

Article 2055 of the Federal Civil Code states that the substitute debtor is obligated in the terms in which the original debtor was obligated; likewise, Article 2053 of the cited order establishes that the creditor who exempts the former debtor, accepting another in their place, cannot claim against the first if the new debtor is insolvent, unless otherwise agreed.

Article 2051 of the Federal Civil Code provides that for there to be substitution of debtor, it is necessary that the creditor expressly or tacitly consents, while Article 2052 states that it is presumed that the creditor consents to the substitution of the debtor when it allows the substitute to perform acts that the debtor must perform, provided that it does so in its own name and not on behalf of the original debtor.

From the harmonious interpretation of the provisions referred to in the preceding paragraphs, regarding the alienation of goods, when a third party assumes the payment obligation, it is considered that the value of the price or consideration, as well as the corresponding VAT, was effectively paid on the date the taxpayer expressly or tacitly accepts the substitution of the debtor, that is, accepts the execution by the substitute debtor of the obligations that would correspond to the original debtor, unless otherwise agreed in which the taxpayer reserves the right to claim against the original debtor.

Origin

First antecedent

72/2007/IVA

Office 325-SAT-09-04-B-90015 of December 14,

2007, through which Bulletin 2007 is made

known.

6/IVA/N

Alienation of pollinating hives.

Article 2o.-A, fraction I, subsection a) of the VAT Law establishes that to calculate said tax when animals and plants that are not industrialized are alienated, except rubber, dogs, cats, and small species used as household pets, the 0% rate is applied to their value.

Therefore, the alienation of pollinating hives would be taxed at the 0% rate, understanding that the entire group of bees is being alienated as such and that the hive, that is, the box with frames or supports, is merely a container.

This, however, is subject to the following clarification:

I.

A hive normally has two parts: the brood chamber or chambers and the storage chamber or chambers; the latter are also known as honey supers. Taking this distinction into account, only the alienation of the compartments with bees, which would correspond to the brood chamber, would be taxed at the 0% rate.

II.

The additional compartments and the corresponding frames or supports, since they would not be the container for the bees but for the consumption or exploitation of honey, would be taxed at the general rate.

Origin

First antecedent

5.2.11.

Office 325-SAT-IV-C-5320 of May 22,

1998. Second Update of the

Compilation of Substantive Tax Normativity.

7/IVA/N

Alienation of fresh skins.

Article 2o.-A, fraction I, subsection a) of the VAT Law establishes that to calculate said tax when animals and plants that are not industrialized are alienated, except rubber, dogs, cats, and small species used as household pets, the 0% rate is applied to their value.

Article 6 of the Regulations of said law establishes that animals and plants are not industrialized when they are presented cut, flattened, in pieces, fresh, salted, dried, refrigerated, frozen, or packaged.

In this regard, it is considered that skins are not industrialized when presented fresh or preserved in any form, provided they are not pre-tanned, tanned, parchment-like, or prepared in any other manner.

Origin

First antecedent

1996

Office 325-A-VII-10975 of December 4,

1996, through which the considerations in

matters of VAT on the alienation of skins

from animals not industrialized are made known.

8/IVA/N

Patent medicines.

For the purposes of Article 2o.-A, fraction I, subsection b) of the VAT Law and Article 7 of its Regulations, patent medicines shall be considered to include pharmaceutical specialties, stupefying agents, psychotropic substances, and antigens and vaccines, including homeopathic and veterinary ones, even when these can be ingested, injected, inhaled, or applied, without undergoing any other elaboration procedure.

In this sense, the alienation and importation of any product that, to be classified as a patent medicine, requires mixing with other substances or products or being subject to an industrial transformation process, such as chemical substances, shall be taxed at the general VAT rate, even when they are incorporated or are the basis for the production of patent medicines.

Origin

First antecedent

6/94

Office 325-A-VII-21606 of June 23,

1994, through which various

operational and normative criteria are made known.

9/IVA/N

Supply of medicines as part of hospital services.

The general VAT rate must be considered.

Article 2o.-A, fraction I, subsection b) of the VAT Law states that the tax will be calculated applying the 0% rate when patent medicines are alienated.

Article 17, second paragraph of the CFF establishes that when, due to the provision of a service, goods are provided or the temporary use or enjoyment is granted to the service recipient, the total amount of the consideration payable by the recipient will be considered as income from the service or as its value, provided that they are goods that are normally provided or their use or enjoyment is granted with the service in question.

Therefore, it is considered that when patent medicines are provided as part of the services during the patient's hospitalization, directly or via the contracting of a special care package, they are taxed at the 16% VAT rate, in accordance with what is established in Article 14, fraction I of the aforementioned law and Article 17, second paragraph of the CFF, in virtue of the fact that it is the generic provision of a service and not the alienation of medicines referred to in Article 2o.-A, fraction I, subsection b) of the law in question.

Origin

First antecedent

6/2005/IVA

Office 325-SAT-09-IV-B-118532 of September 19,

2005, through which the

Compilation of Normative Criteria is issued. Release of the

first part of Bulletin 2005.

10/IVA/N

Products intended for human and animal food.

For the purposes of what is established in Article 2o.-A, fraction I, subsection b) of the VAT Law, products intended for food are understood to be those that, without requiring additional transformation or industrialization, are ingested as such by humans or animals for their food, even when, upon preparation by the final consumer, they are cooked or combined with other products intended for human and animal food.

The alienation of inputs or raw materials that are incorporated, within an industrialization or transformation procedure, into products intended for human and animal food has been subject to the 0% rate as long as such raw materials or inputs are contemplated in the definition of the previous paragraph.

The alienation of inputs or raw materials, such as chemical substances, colorants, additives, or preservatives, that are incorporated into the food product, is subject to the general rate, unless they fall within the definition of the second paragraph of this normative criterion.

Origin

First antecedent

Office 325-A-VII-10973 of December 3,

1996, through which various

normative criteria are made known.

11/IVA/N

Dietary supplements. They are not considered as products intended for food.

The purpose of dietary supplements is to increase total dietary intake, complement it, or supply some of its components, and they may even be made from traditional foods.

Indeed, dietary supplements are made from a mixture of products of diverse nature (chemicals, herbs, natural extracts, vitamins, minerals, etc.) whose purpose is to provide the body with components in levels higher than those obtained from traditional food, their intake being optional and sometimes containing warnings, limitations, or contraindications regarding their use or consumption.

The Supreme Court of Justice of the Nation has pronounced itself regarding the reason that led the legislator to make a distinction between products intended for food and others, for the purposes of establishing exceptions and differentiated rates under the VAT Law, in the sense that differential treatment is due to extra-fiscal purposes such as contributing to the Mexican food system and protecting less favored social sectors.

Therefore, for the purposes of Articles 2o.-A, fraction I, subsection b) and 25, fraction III of the VAT Law, dietary supplements are not considered as products intended for food, and therefore are not subject to the 0% rate upon their alienation, nor exempt upon their importation.

Origin

First antecedent

2013

Office 600-04-02-2013-12915 of June 25,

2013, through which the

normative criteria approved in the second quarter of 2013 are made

known.

Office 600-04-07-2013-16549 of December 10,

2013, through which Bulletin 2013 is made

known, with normative criterion number

121/2013/IVA.

12/IVA/N

Concept of milk for VAT purposes.

Article 2o.-A, fraction I, subsection b), numeral 1 of the VAT Law establishes that the 0% rate will be applied to the alienation of products intended for human or animal food, with the exception of beverages other than milk, even when they have the nature of foods; accordingly, the 0% VAT rate is applicable to the alienation of milk.

Tax legislation does not define the concept of milk; however, there is both sanitary and commercial regulation that defines this concept and establishes the specifications that products must meet to be considered milk, so, attending to the own characteristics of milk, for the purposes of the application of the 0% rate referred to in Article 2o.-A, fraction I, subsection b), numeral 1 of the VAT Law, milk is understood as:

I.

The natural secretion of the mammary glands of cows or any other animal species, excluding colostrum, that comply with the sanitary and commercial regulation applicable to them.

Based on the foregoing, milks in their various commercial denominations, including flavored milk, are included, provided they comply with the specifications established in the Official Mexican Standards "NOM-155-SCFI-2012, Milk-Denominations, physicochemical specifications, commercial information and test methods" and "NOM-243-SSA1-2010, Products and services. Milk, dairy product, combined dairy product, mixture of milk with vegetable fat and dairy derivatives. Dispositions and sanitary specifications. Test methods" in force.

II.

The mixture of milk with vegetable fat in its various commercial denominations, including flavored milk, provided they comply with the specifications established in the Official Mexican Standards "NOM-190-SCFI-2012, Mixture of milk with vegetable fat- Denominations, physicochemical specifications, commercial information and test methods" and "NOM-243-SSA1-2010, Products and services. Milk, dairy product, combined dairy product, mixture of milk with vegetable fat and dairy derivatives. Dispositions and sanitary specifications. Test methods" in force.

III.

Infant formula, infant formula with special nutritional needs, follow-up formula, and follow-up formula for special nutritional needs, provided they comply with the specifications established in the Official Mexican Standard "NOM-131-SSA1-2012, Products and services. Formulas for infants, follow-up and for special nutritional needs. Foods and non-alcoholic beverages for infants and young children. Dispositions and sanitary and nutritional specifications. Labeling and test methods" in force.

Origin

First antecedent

2014

Office 600-04-07-2014-87379 of December 15,

2014, through which the

normative criteria approved in the fourth quarter of 2014 are made

known.

Office 600-04-07-2014-87371 of December 17,

2014, through which Bulletin 2014 is made

known, with normative criterion number

13/2014/IVA.

13/IVA/N

Prepared foods.

For the purposes of Article 2o.-A, fraction I, last paragraph of the VAT Law, prepared foods for consumption at the place of their alienation are considered to be foods alienated as part of the generic meal service, provided by hotels, restaurants, fondas, lunch counters, tortilla shops, taco stands, pizzerias, economical kitchens, cafeterias, dining rooms, roasteries, bars, cantinas, banquet services, or any others of the same nature, in any of the service modalities of service on the plate, at the table, home delivery, room service, take-out, and self-service.

Regarding establishments other than the aforementioned, such as so-called self-service stores, it is considered that they provide the generic meal service only through the alienation of prepared or compound foods, ready for consumption and offered in bulk, regardless of whether they have prepared or combined them, or acquired them already prepared or combined. Consequently, the alienation of said foods has been subject to the general VAT rate.

The alienations of the foods mentioned in the previous paragraph that are made by suppliers to the establishments referred to in the cited paragraph will only be subject to the general rate of the tax when the suppliers provide a generic meal service in terms of the first paragraph.

Origin

First antecedent

14/93

Office 325-A-VII-24497 of October 27,

14/IVA/N

Prepared foods for consumption at the place of their alienation.

For the purposes of Article 2o.-A, fraction I, last paragraph of the VAT Law, prepared foods for consumption at the place or establishment where they are alienated are also considered to be those resulting from the combination of those products that, by themselves and by their ordinary destination, can be consumed without the need to undergo any other additional elaboration process, when the instruments or utensils necessary for their cooking or heating are made available to the acquirer.

Origin

First antecedent

2008

Office 600-04-02-2008-77249 of November 25,

2008, through which the

normative criterion in

matters of VAT is made known. Office 600-04-02-2009- 73416 of January 7, 2009, through

which Bulletin 2008 is made known,

with normative criterion number 10/2008/ IVA.

15/IVA/N

Alienation of spare parts for agricultural equipment.

Article 2o.-A, fraction I, subsection e), last paragraph of the VAT Law establishes that the 0% rate will be applied to the alienation of agricultural, livestock, or fishing machinery and equipment, when such equipment is alienated complete.

Conversely, taxpayers who alienate spare parts for agricultural, livestock, or fishing machinery and equipment are obligated to transfer and pay VAT at the 16% rate.

Origin

First antecedent

5.2.8.

Office 102-SAT-13 of July 4,

1997, through which the Compilation

of Substantive Tax Normativity is issued.

16/IVA/N

Equipment integrated into hydroponic greenhouses.

Article 2o.-A, fraction I, subsection g) of the VAT Law establishes that the alienation of hydroponic greenhouses and equipment integrated into them to produce controlled temperature and humidity or to protect crops from natural elements is taxed at the 0% rate. However, neither tax provisions nor federal common law establish what must be understood by equipment integrated into hydroponic greenhouses.

In this sense, for the purposes of Article 2o.-A, fraction I, subsection g) of the VAT Law, tangible goods, whether or not they have the quality of fixed assets in accordance with the Income Tax Law (ISR), will have the character of equipment integrated into hydroponic greenhouses, when they are alienated jointly with the hydroponic greenhouse and this is stated in the corresponding CFDI (electronic tax receipt), provided that the mentioned greenhouse is a finished product and the equipment fulfills its function together with it. It is understood that they fulfill their function when the goods mentioned consist in producing temperature and humidity in a controlled manner in hydroponic greenhouses; or protecting crops from natural elements.

Goods that, having the aforementioned characteristics, are alienated individually as inputs in the production, elaboration, improvement, repair, and/or maintenance chain of hydroponic greenhouses, or to optimize their functioning, will not be considered equipment integrated into hydroponic greenhouses, and therefore are not subject to the 0% VAT rate, even if they could constitute elements that compose said greenhouses or complement their function.

Origin

First antecedent

2013

Office 600-04-07-2013-15282 of October 10,

2013, through which the

normative criteria approved in the third quarter of 2013 are made

known.

Office 600-04-07-2013-16549 of December 10,

2013, through which Bulletin 2013 is made

known, with normative criterion number

125/2013/IVA.

17/IVA/N

Books contained in electronic, tactile, or auditory media.

Treatment in matters of VAT.

In accordance with Article 2o-A, fraction I, subsection i) of the VAT Law, the tax will be calculated applying the 0% rate to the values referred to in said law, when books, newspapers, and magazines, which are edited by

own taxpayers.

Article 9, fraction III of the VAT Law establishes that the aforementioned tax shall not be paid regarding the alienation of books, newspapers, and magazines, as well as the right to use or exploit a work, when performed by its author.

Article 20, fraction V of the VAT Law provides that the tax shall not be paid for the use or temporary enjoyment of books, newspapers, and magazines.

The aforementioned Article 2o.-A, fraction I, subsection i) stipulates that, for the purposes of the VAT Law, a book is considered any publication, unitary, non-periodic, printed on any medium, whose edition is made in one volume or in several volumes. Similarly, the article in question states that, within the concept of books, those periodic publications covered under the same title or denomination and with different content between one publication and another are not included. Finally, it states that materials complementary to books, when they cannot be marketed separately, are considered part of the books. It is understood that they do not have the characteristic of being complementary when the materials can be marketed independently of the book.

Article 5o., second paragraph of the Federal Tax Code (CFF) determines that in the absence of an express fiscal norm, the provisions of federal common law shall apply supplementarily when their application is not contrary to the proper nature of fiscal law. For its part, Article 16 of the Federal Copyright Law establishes that works may be made known to the public, among other acts, through publication, which is defined in fraction II of said article as the reproduction of the work in tangible form and its making available to the public by means of copies, or its permanent or provisional storage by electronic means, which allow the public to read it or know it visually, tactilely, or auditorily.

From a harmonious interpretation of the legal provisions stated above, it follows that the definition of the term "book" established in the VAT Law and in the Federal Copyright Law includes those books contained in electronic, tactile, and auditory media; in this sense, for the purposes of Articles 2o.-A, fraction I, subsection i); 9 fraction III, and 20 fraction V of the VAT Law, as applicable, the 0% rate shall be applied or the tax shall not be paid.

Origin

First antecedent

17/2002/IVA

Official Letter 325-SAT-A-31676 of May 24, 2002.

18/IVA/N

Charges between airlines.

Article 32 of the Regulations of the VAT Law provides that the transport service provided by an airline covered by a ticket issued by a different airline is the same service provision for which VAT was already caused upon the issuance of the ticket, so the charge that the airline providing the service makes for this concept to the one that issued the ticket is not subject to the payment of said tax.

Article 2o.-A, fraction II of the same law establishes in a limited manner the circumstances to apply the 0% rate, within which charges between airlines are not included.

Therefore, the refund of VAT requested by airlines that apply the 0% rate to charges between airlines is inappropriate. This is because such services are not subject to the aforementioned rate, in accordance with Article 2o.-A, fraction II of the VAT Law, but are exempt in accordance with Article 32 of its Regulations.

Origin

First antecedent

Official Letter 325-A-VII-10960 of October 14, 1996, through which the criteria approved by the Normativity Committee in its session No. 21, held on October 10, 1996, are made known.

19/IVA/N

Provision of services to companies dedicated to agricultural and livestock activities.

Article 2o.-A, fraction II, subsection a) of the VAT Law establishes that the tax shall be calculated applying the 0% rate when services referred to in that numeral are provided directly to farmers and ranchers, provided they are destined for agricultural and livestock activities.

Article 11 of the Regulations of said Law states that it is understood that services are provided directly to farmers and ranchers when it is by virtue of contracts celebrated with associations or organizations that group them or with any credit institution that acts in its capacity as trustee, in which the farmers, ranchers, or organizations that group them are beneficiaries, when no beneficiaries have been designated or these cannot be individualized, and when it concerns support trusts for said farmers or ranchers.

Article 16, fractions III and IV and the last paragraph of the CFF provides that a company is a natural or legal person that carries out agricultural and livestock activities; likewise, Article 74, sixth paragraph of the Income Tax Law (ISR) states that legal persons dedicated exclusively to agricultural, livestock, fishing, or forestry activities are those whose income from said activities represents at least 90% of their total income, excluding income from the alienation of fixed assets or fixed assets and lands, of their property that had been affected by their activity. For its part, Article 113-E, last paragraph of the ISR Law establishes that natural persons dedicated exclusively to agricultural, livestock, forestry, or fishing activities are considered such when the total of their income represents 100% from these activities.

From a harmonious interpretation of the legal provisions stated above, it follows that a company, natural or legal person, that carries out agricultural and livestock activities will also enjoy the 0% rate referred to in Article 2o.-A, fraction II, subsection a) of the VAT Law, when it directly receives the services indicated in said subsection and they are destined for agricultural and livestock activities.

Origin

First antecedent

2014

Official Letter 600-04-07-2014-6142 of August 14, 2014, through which the new normative criteria approved in the third quarter of 2014 are made known in advance. Official Letter 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 20/2014/IVA.

20/IVA/N

Provision of services in hydroponic greenhouses. Application of the 0% rate.

Article 2o.-A, fraction II, subsection d) of the VAT Law establishes that said tax shall be calculated applying the 0% rate when independent services are provided in hydroponic greenhouses.

Given the above, VAT shall be calculated at the 0% rate only when the independent service is provided in hydroponic greenhouses, that is, in greenhouses that are already constituted as such.

Therefore, in terms of Article 5o. of the CFF, the aforementioned circumstance cannot be expanded or extended to other cases of service provision not specifically provided for in the law, such as those services carried out to build, equip, or mount said greenhouses.

Origin

First antecedent

18/2002/IVA

Official Letter 325-SAT-A-31676 of May 24, 2002, through which the First Update of the Compilation of Substantive Internal Taxes is issued.

21/IVA/N

VAT on imports carried out by the Federation, the States, the Municipalities, as well as their decentralized agencies and public social security institutions.

Article 3o., second paragraph of the VAT Law establishes that the Federation, the Federal District, the States, the Municipalities, as well as their decentralized agencies and public social security institutions, shall not be obligated to pay VAT for the acts they perform that give rise to the payment of duties. Within this last concept are included federal, state, or municipal duties.

Article 49 of the Federal Customs Law (LFD) regulates the payment of the customs processing duty for receiving services consisting of operations carried out using a petition or the corresponding customs document, as referred to in said article, and not for the act of importation itself.

In this sense, the VAT exemption contained in the second paragraph of Article 3o. of the VAT Law is not applicable to the tax on imports carried out by the Federation, the Federal District, the States, the Municipalities, as well as their decentralized agencies and public social security institutions, even if they pay the duty referred to in the previous paragraph, since this is paid for receiving customs processing services, which are distinct from the act of importation.

Origin

First antecedent

IV/95

Normativity Bulletin 1

22/IVA/N

Calculation of the credit proportion when exempt activities are carried out gratuitously.

In accordance with the VAT Law, when the taxpayer uses indistinctly goods, services, or the use or temporary enjoyment of goods to carry out taxable activities at the general rate or at the 0% rate, and additionally to carry out other activities for which they obtain income, the credit shall proceed only in the proportion in which the value of the activities for which the tax must be paid or to which the 0% rate is applied represents in the total value of the mentioned activities that the taxpayer carries out in the month in question.

Article 15, fraction III of the VAT Law establishes that VAT shall not be paid for services provided gratuitously, except when the beneficiaries are the members, partners, or associates of the legal person.

Article 34 of the referenced Law, in its first paragraph, provides that when the consideration that the taxpayer charges for the alienation of goods, the provision of services, or the granting of the use or temporary enjoyment of goods is not in cash or checks, but total or partially in other goods or services, the market value or, in its defect, the appraisal value shall be considered as the value of these. The same values will be taken into account regarding activities for which the tax established in the Law must be paid, when there is no consideration.

From the harmonious interpretation of the aforementioned provisions, it is concluded that regarding activities for which the tax should not be paid (exempt) that are gratuitous, for the purpose of calculating the credit proportion only, the market value or, in its defect, the appraisal value shall be considered as the value of these.

Origin

First antecedent

2013

Official Letter 600-04-02-2013-11156 of April 22, 2013, through which the normative criteria approved in the first quarter of 2013 are made known.

Official Letter 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 131/2013/IVA.

23/IVA/N

VAT credits in favor. The remainder of a credit in favor, if the latter was previously credited against a payment subsequent to the declaration in which it was determined, must continue to be credited until exhausted.

Article 6o., first paragraph of the VAT Law establishes that when a credit in favor results in the payment declaration, the taxpayer may only credit it against the tax owed to them in the following months until exhausted or request its refund.

In this sense, the accumulation of remainders of pending credits in favor is not feasible, since the scheme is of monthly and definitive payments as provided in Article 5o.-D of the VAT Law, so it is considered that in cases where taxpayers, after having determined a credit in favor, credit it in a subsequent declaration, resulting in a remainder, they must continue to credit it until exhausted, without in said case its refund being appropriate.

Origin

First antecedent

52/2003/IVA

Official Letter 325-SAT-IV-F-84632 of November 28, 2003, through which the Compilation of Normative Criteria is issued. Criteria are made known.

24/IVA/N

Reimbursements or refunds in kind. They constitute alienation.

Article 8o. of the VAT Law provides that it is considered that there is alienation for the purposes of said law, what the CFF states.

Article 14, fraction I of the cited Code establishes that alienation shall be understood as any transfer of ownership, even in that in which the alienator reserves the ownership of the alienated good.

Therefore, concessionaire companies of goods or services that, upon their dissolution and liquidation being decreed, return goods to the Federal Government as a reimbursement of the social capital previously contributed to them, are obligated to transfer and pay VAT at the 16% rate, since in accordance with what is provided by Article 14, fraction I of the CFF, said operations constitute an alienation.

Origin

First antecedent

5.2.7.

Official Letter 102-SAT-13 of July 4, 1997, through which the Compilation of Substantive Normativity of Internal Taxes is issued.

25/IVA/N

Alienation of stone, sand, and earth. They are not real estate.

Article 9o., fraction I of the VAT Law states that the aforementioned tax shall not be paid regarding the alienation of soil.

Applying supplementarily the legislation of federal common law, soil must be understood as the real estate indicated in Article 750, fraction I of the Federal Civil Code.

Therefore, the alienation of stone, sand, or earth is not subject to the tax relief provided in said Article 9o., fraction I of the VAT Law, as they are not real estate.

Origin

First antecedent

5.2.10.

Official Letter 325-SAT-IV-C-5320 of May 22, 1998. Second Update of the Compilation of Substantive Tax Normativity.

26/IVA/N

Alienation of primary residence. The provision establishing that VAT shall not be paid does not cover partial services in their construction.

Article 9o., fraction II of the VAT Law establishes that said tax shall not be paid in the alienation of constructions adhered to the soil destined or used as a primary residence.

Likewise, Article 29 of the Regulations of said Law states that the provision of construction services of real estate destined for primary residence, the expansion of these, and the installation of prefabricated houses that are used for that purpose are included within the exemption, provided that the service provider supplies the labor and materials.

For the above, the work of hydraulic, sanitary, electrical installations, iron or aluminum carpentry, and, in general, any labor that real estate constructors hire from third parties to perform or incorporate into new real estate and constructions destined for primary residence, are not included in the exemption provided in Article 9o., fraction II of the aforementioned law and 29 of its regulations, since said services by themselves do not constitute the execution itself of a construction adhered to the soil, nor do they imply the erection of said real estate.

Origin

First antecedent

26/2001/IVA

Official Letter 325-SAT- A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

27/IVA/N

Exemption. Commissions for the granting of mortgage credits for housing.

Article 15, fraction I of the VAT Law establishes that said tax shall not be paid for the commissions and other considerations paid by the borrower to their creditor with respect to the granting of mortgage credits for the acquisition, expansion, construction, or repair of real estate destined for primary residence, except those that originate after the authorization of said credit or that must be paid to third parties by the borrower.

According to the cited provision, the commissions and other considerations paid by the borrower to their creditor for any reason other than the granting of the mentioned credits, nor those that they pay with respect to the granting of said credits but that originate after the authorization of said credits, are not included in the aforementioned exemption.

A contrario sensu, the commissions and considerations paid by the borrower to their creditor due to the granting of the mentioned credits and that originate up to the moment of their authorization, are included in the exemption.

Now, the aforementioned numeral 15 does not state as a requirement for the proceeding of the exemption that it concerns commissions and considerations that must be paid no later than at the moment of the authorization of the credits, but only requires that the borrower pays them with respect to the granting of said credits and that they originate up to the moment of their authorization.

Consequently, for the purposes of Article 15, fraction I of the VAT Law, said tax shall not be paid for the commissions and other considerations paid by the borrower to their creditor with respect to the granting of the aforementioned credits, that have their origin in the granting of said credits, even if these must be paid or are effectively paid after the authorization of said credits.

Origin

First antecedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first half of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 123/2012/ IVA.

28/IVA/N

Moratory interest.

Article 15, fraction X of the VAT Law establishes that said tax shall not be paid for the provision of services from which interest derives, in the cases in which the same law indicates.

Therefore, this includes both normal interest and moratory interest since the same provision does not distinguish or limit said concept.

Origin

First antecedent

Official Letter 325-A-VII-10973 of December 3, 1996, through which various normative criteria are made known.

29/IVA/N

Interest in financing of acts subject to the 0% rate or exempt.

Article 15, fraction X, subsection a) of the VAT Law establishes that said tax shall not be paid for the provision of services from which financing interest derives in the cases in which the alienator, the provider of a service, or the one granting the use or temporary enjoyment of goods provides financing related to acts or activities for which they are not obligated to pay this tax or to which the 0% rate is applied.

For its part, Article 37 of the Regulations of the VAT Law establishes that one shall not be obligated to pay the tax on interest derived from financing operations, even if the one providing the financing is not the same person who alienates the good, provided that in the corresponding contract the loan is conditioned to the acquisition of a specific real estate destined for primary residence.

Therefore, from the interpretation a contrario sensu and without prejudice to what is stated by Article 37 cited above, if the one granting the credit or financing is not the alienator, the provider of a service, or the one granting the use or temporary enjoyment of goods, said financing shall not be exempt, in accordance with Article 15, fraction X, subsection a) of the VAT Law, although it might be exempt in accordance with another provision of the same law.

Origin

First antecedent

Official Letter 325-A-VII-10960 of October 14, 1996, through which the criteria approved by the Normativity Committee in its session No. 21, held on October 10, 1996, are made known.

Modification

Second Resolution of Modifications to the RMF 2017

Published in the DOF on July 18, 2017, Annex 7 published in the DOF on July 21, 2017.

30/IVA/N

Tips. They do not form part of the VAT taxable base.

Article 18 of the VAT Law establishes that for calculating the tax regarding the provision of services, the total of the agreed consideration, as well as the amounts that are additionally charged or collected from the recipient of the service for other taxes, duties, per diems, expenses of all kinds, reimbursements, normal or moratory interest, conventional penalties, and any other concept, shall be considered as the value.

Article 346 of the Federal Labor Law indicates that tips are part of the workers' salary, so employers cannot reserve or have any participation in them.

From the harmonious interpretation of the cited provisions, it follows that remunerations received by concept of tip do not form part of the VAT taxable base for the provision of services; this is because the provider of the services, the employer, cannot reserve any participation in the tips as they are part of the workers' salary.

Origin

First antecedent

108/2004/IVA

Official Letter 325-SAT-IV-B-91597 of August 31, 2004, through which the release of the first part of Bulletin 2004 is issued.

31/IVA/N

VAT. Tax base for the provision of the service of issuing vouchers and electronic wallets.

Article 18, first paragraph of the VAT Law establishes that for calculating said tax, regarding the provision of services, the total of the agreed consideration, as well as the amounts that are additionally charged or collected from the recipient of the service for other taxes, duties, per diems, expenses of all kinds, reimbursements, normal or moratory interest, conventional penalties, and any other concept, shall be considered as the value.

For the above, regarding the service of issuing vouchers and electronic wallets, the base, the value, for VAT purposes, must be the amount of the consideration for the service of issuing vouchers and electronic wallets, known as commission, excluding the amount or nominal value of the vouchers and electronic wallets.

In this sense, to calculate the VAT base, providers of the service of issuing vouchers and electronic wallets must consider as value the total of the agreed consideration for the provision of the service of issuing vouchers and electronic wallets known as commission, excluding the amount or nominal value of the vouchers and electronic wallets.

Origin

First antecedent

2010

Official Letter 600-04-02-2010-68009 of July 26, 2010, through which the normative criteria approved in the first half of 2010 are made known.

Official Letter 600-04-02-2010-69707 of December 17, 2010, through which Bulletin 2010 is authorized, with normative criterion number 99/2010/IVA.

32/IVA/N

VAT. The importation of goods subject to the 0% rate is exempt.

In accordance with Article 25, fraction III of the VAT Law, VAT shall not be paid on the importation of goods whose alienation in the country and of services provided in national territory do not give rise to the payment of said tax or

when they are those indicated in Article 2o.-A of the aforementioned law.

Article 2o.-A of the cited legislation indicates various goods and services whose sale or provision within national territory are taxed at a rate of 0%, in which the rate is not established for the importation of the referred goods or services.

Therefore, in import operations, the 0% rate provided for in Article 2o.-A of the VAT Law is not applicable, since although Article 25 of the cited legislation refers to Article 2o.-A, such reference is only to identify the merchandise that may be imported without payment of the aforementioned tax and not for the purpose of applying the 0% rate.

Origin

First precedent

39/2003/LA

Compilation of Normative Criteria, Electronic Bulletin October 2003, Volume III.

33/IVA/N

Applicable provision to determine gold imports for which VAT will not be paid.

Article 25, fraction III of the VAT Law establishes that said tax will not be paid on the importation of goods whose sale in the country does not give rise to the payment thereof or is subject to the 0% rate.

However, the 0% rate and the exemption in the sale of gold and of goods made from gold, are conditioned to their wholesale sale and not to the general public, in the case of Article 2o.-A, fraction I, subsection h) of the same law, or to their retail sale and with the general public, pursuant to Article 9o., fraction VIII of the VAT Law.

Therefore, such conditions, by their very nature, are incompatible with the concept of importation and can only be understood or carried out in the case of sales. Consequently, from a strict interpretation of the law, such conditions exclude the application of Article 25, fraction III, in relation to 2o.-A, fraction I, subsection h) and 9o., fraction VIII of the VAT Law.

On the other hand, fraction VII of the aforementioned Article 25, exempts the importation of gold whose minimum content is 80%, without any condition.

Therefore, the importation of gold with a minimum content of said material of 80% is exempt from VAT, pursuant to what is provided in Article 25, fraction VII of the law, not so the importation of the other products provided for in Articles 2o.-A, fraction I, subsection h) and 9o., fraction VIII, due to the fact that they do not meet the requirements indicated in Article 25, fraction III of the law of the subject matter.

Origin

First precedent

5.2.6.

Office 102-SAT-13 of July 4, 1997, through which the Compilation of Substantive Internal Tax Regulatory Framework is issued.

34/IVA/N

Payment and credit of VAT on imports, when the activities of the importer are taxed at the 0% rate.

Pursuant to Articles 28 of the VAT Law and 55 of its Regulations, regarding the importation of tangible goods, the payment will have the character of provisional and will be made jointly with that of the general import tax, using the form by means of which the payment of the latter is made.

Regarding companies that import machinery and equipment not produced in the country, for the development of the functions inherent to their activity, they must pay the VAT corresponding to them, being able to credit it under the terms and with the requirements established in Articles 4o. and 5o. of the law of the subject matter, regardless of whether the importer's activities are taxed at the 0% rate.

Origin

First precedent

V/95

Regulatory Bulletin May 1-June 30 of 1995.

35/IVA/N

0% VAT rate. It is applicable and IEPS will not be paid, when the national merchandise is destined to the fiscal deposit regime for its exhibition and sale in stores known as "Duty Free".

Article 29, fraction I of the VAT Law provides that resident companies will calculate said tax applying the 0% rate to the value of the sale of goods when these are exported definitively in terms of the Customs Law.

Article 119, last paragraph of the Customs Law establishes that it will be understood that national merchandise has been exported definitively when they remain in fiscal deposit.

Therefore, national merchandise that is destined to the fiscal deposit regime for its exhibition and sale in stores known as "Duty Free", will be subject to the 0% VAT rate and, if applicable, IEPS will not be paid, pursuant to Article 8o., fraction II of the IEPS Law.

Origin

First precedent

30/2003/IVA-IEPS

Compilation of Normative Criteria, Electronic Bulletin October 2003, Volume III.

36/IVA/N

Insurance. Vehicles of residents abroad that enter temporarily into the country.

Article 29, fraction IV, subsection e) of the VAT Law provides that resident companies in the country will calculate said tax applying the 0% rate to the value of the provision of services when these are exported, this rate is applicable in the case of insurance provided by residents in the country but that are used abroad.

In the case of insurance coverage services in the automobile sector for residents abroad who enter temporarily into national territory on board their vehicles, the vehicle is covered exclusively during its stay in national territory, that is, the referenced insurance applies only during the time the vehicle circulates in the country, and it is during this time that the insured receives the benefits.

Therefore, it cannot be considered that there is a use of the service abroad, consequently its provision is subject to the transfer and payment of the tax in question at the 16% rate, even though the payment of the insured sum due to the accident foreseen in the policy is made abroad.

Origin

First precedent

5.5.2.

Office 102-SAT-13 of July 4, 1997, through which the Compilation of Substantive Internal Tax Regulatory Framework is issued.

37/IVA/IEPS/N

Transferred taxes. When the taxpayer pays them without having made the corresponding charge or collection to the economic subject, they may obtain legal benefits without the exclusions applicable to said taxes.

Article 1o., third paragraph of the VAT Law, as well as Article 19, fraction II of the IEPS Law, establish the obligation of taxpayers to transfer said taxes, understanding by transfer of the tax the charge or collection that the taxpayer must make to the persons who acquire the goods, use them or temporarily enjoy them or receive the services, for the amount equivalent to the tax established in said laws.

Article 66, first paragraph of the CFF provides for the authorization of payment in installments and Article 70-A, paragraphs first and third of the CFF establishes the reduction of fines and surcharges. In both cases, the benefits cannot be granted when it comes to transferred or collected contributions, as established in Articles 66-A, fraction VI, subsection c), following paragraph and 70-A, first paragraph, both of the CFF.

From the analysis of the provisions summarized in the previous paragraphs it is derived that taxpayers have the obligation to carry out the transfer of the tax under the terms established by the laws themselves, since if they do not do so, the payment of the contributions must be made directly or charged to the taxpayer's assets.

In such considerations, the taxpayer who does not transfer the tax corresponding to the operation carried out, and pays it directly or with their assets, will not be prevented from requesting the authorization for payment in installments provided for in Article 66, first paragraph of the CFF and the reduction of fines and surcharges indicated in Articles 70-A, first and third paragraphs of the CFF.

Origin

First precedent

Second Resolution of Modifications to the RMF for 2015

Published in the DOF on May 14, 2015, Annex 7, published in the DOF on May 21 of 2015.

38/IVA/N

Sale of salt. Applicable VAT rate.

Article 2o.-A, fraction I, subsection b), numeral 4 of the VAT Law establishes that the tax will be calculated applying the 0% rate, to the sale of products intended for food, with the exception of food additives.

On its part, normative criterion 10/IVA/N Products intended for human and animal food, establishes that products intended for food, regarding additives, are those that, without requiring additional transformation or industrialization, are ingested as such by humans or animals for their food, even when prepared by the final consumer they are cooked or combined with other products intended for food.

According to its characteristics, salt is defined as a product constituted by sodium chloride and coming exclusively from natural sources.

In this sense, salt, despite being a food additive, is a product intended for food that can be consumed by humans or animals directly or combined with other products intended for food, and therefore its sale within national territory is taxed at the 0% VAT rate, regardless of whether the purchaser uses it in any industry different from the food industry.

This criterion does not apply to salt for non-food industrial use provided for in Article 3.28 of NOM-040-SSA1-1993.

Origin

First precedent

RMF for 2018

Published in the DOF on December 22 of 2017, Annex 7, published in the DOF on December 29, 2017.

39/IVA/N

Film rolls or plastic blankets. They are not herbicides nor pesticides.

Article 2o.-A, fraction I, subsection f), of the VAT Law establishes that the 0% rate of the tax will be applied in the sale of herbicides, among other products, provided they are intended to be used in agriculture.

Article 5o., first paragraph of the CFF establishes that tax provisions that establish burdens on individuals are of strict application, considering that they establish burdens the norms that refer to the subject, object, base, rate or tariff.

Numeral 2.4 of the Official Mexican Standard "NOM-033-FITO-1995 published in the DOF on June 24, 1996, by which the requirements and phytosanitary specifications for the notice of start of operation that must be complied with by individuals or legal entities interested in commercializing agricultural pesticides", establishes that a pesticide is a "phytosanitary input intended to prevent, repel, combat and destroy harmful biological organisms to plants, such as: insecticides, fungicides, herbicides, acaricides, molluscicides, nematicides and rodenticides".

The Regulation on Matters of Registration, Import and Export Authorizations and Export Certificates of Pesticides, Plant Nutrients and Toxic or Hazardous Substances and Materials, published in the DOF on December 28 of 2004 and modified by Decree published in the same official dissemination organ on February 13, 2014, in Article 2, fractions XXXVIII and XLI, establishes the following definitions:

"XXXVIII. Pesticide, any substance or mixture of substances that is intended to control any pest, including vectors that transmit human and animal diseases, unwanted species that cause damage or interfere with agricultural and forestry production, as well as defoliant substances and desiccants;"

"XLI. Agricultural use pesticide, the pesticide formulated for direct use in plants that is intended to prevent, repel, combat and destroy biological organisms harmful to these;"

On the other hand, there are film rolls or plastic blankets in the market that are synthetic products consisting of a film of low-density polyethylene and linear low-density polyethylene that are used, among other functions, as a cultivation technique to cover the soil and protect it from atmospheric agents, acting as a physical barrier that is extended over crop lines or furrows, which blocks solar rays to prevent the development of weeds, prevents moisture evaporation and reduces changes in temperature, with which better results are obtained in the harvests, since by increasing the soil temperature it allows a shorter harvest time and increases the yield of the harvested surface, improves soil aeration, optimizes the yield of fertilizers, pesticides and irrigation water, reducing the necessary amount of the same, among other uses.

In accordance with the above, it is derived that a herbicide is a species or category of pesticide, and an agricultural use pesticide has as an essential element substance or mixture of substances that are intended to prevent, repel, combat and destroy biological organisms harmful to plants, while according to the description of film rolls or plastic blankets, it is a plastic that serves as a physical barrier that prevents the transmission of solar rays, so its nature is different from that of herbicides, since it is not a substance or mixture of substances that destroy biological organisms or meet the other purposes mentioned earlier, reason why they are not included in the generic definition of pesticide, nor within the specific one of herbicide.

Therefore, the sale of film rolls or plastic blankets for agricultural use, is subject to the general VAT rate, by not being located in the case referred to in Article 2o.-A, fraction I, subsection f), of the VAT Law.

Origin

First precedent

Third Resolution of Modifications to the RMF for 2018

Published in the DOF on October 19 of 2018, Annex 7, published on the same date of the Modification.

40/IVA/N

Digital Services. Definition of intermediation services for the effects of Article 18-B, fraction II of the VAT Law.

Article 18-B of the VAT Law provides that only digital services are considered those established in said legal provision, when these are provided through applications or content in digital format through Internet or another network, fundamentally automated, possibly or not requiring minimal human intervention, provided that a consideration is charged for them.

On its part, Article 18-B, fraction II of the VAT Law, specifies as digital service the intermediation services between third parties who are offerors of goods or services and the demanders thereof.

Tax legislation currently does not define the concept of digital intermediation service; however, pursuant to what is stated in the exposition of motives of the initiative that gave rise to the regime for the provision of digital services, it was established that in the case of said intermediation services between third parties who are, on the one hand, offerors of goods or services and, on the other, the demanders of said offer, the common element is that the provider of the intermediation service contracts with the seller of the good or the provider of services, to offer the goods and services through their Internet page, application or other digital network and, in some cases, charge on their behalf the price corresponding to who acquires the good or contracts the service, obtaining thereby a commission.

In this sense, for the effects of Article 18-B, fraction II of the VAT Law, a natural or legal person provides digital intermediation services when they use or enable an application or any other digital network so that, through the interaction between two or more clients or participants (generally demanders and offerors), they express their consent to sell and acquire a good, provide and receive a service or grant and receive the use or temporary enjoyment of a good, which is characterized by the fact that both the demanders and the offerors who interact, are users of digital platforms and the offerors contract the services with the provider of intermediation services, with the object or purpose that these agree on the sale of a good, the provision of a service or the use or temporary enjoyment of a good, in exchange for a price or consideration.

For the above, from a harmonious and teleological interpretation of the tax provisions in matters of digital services, it is considered that digital platforms provide intermediation services when in exchange for the payment of a price or a consideration, they offer or allow through their Internet page, application or any other digital network, that their clients offer to third parties, goods or services and, that said offerors and demanders agree through the digital platform on the conditions of said operations and the price or consideration thereof.

The above is fulfilled even in cases where digital platforms that provide digital intermediation services state that the services or goods offered are the exclusive responsibility of the offerors thereof and that said platforms do not intervene in the negotiation, price setting and conditions of the service, presenting themselves only as online aggregators, transport network companies or any other denomination.

In this sense, any digital platform that provides digital intermediation services so that, through its Internet page, application or any other digital network, the offerors of goods or services agree or contract with demanders thereof on the conditions and prices or considerations of the services or goods offered, is considered to provide intermediation services between third parties, in terms of Article 18-B, fraction II of the VAT Law and, therefore, said platforms of digital intermediation services, must comply with the obligations provided for in Chapter III BIS and Article 1o.-A BIS of the VAT Law and of Title IV, Chapter II, Section III of the ISR Law, including those of making withholdings of the taxes, when so provided in terms of the mentioned tax provisions.

IV.

Criteria of the IEPS Law

1/IEPS/N

Subsequent sales of alcohol or denatured alcohol. The persons who carry them out are taxpayers of the IEPS.

Article 1o. of the IEPS Law provides that individuals and legal entities that sell in national territory the goods indicated in said law are obligated to pay the tax.

Regarding this, Article 2o., fraction I, subsection B) of the same law, states that in the case of sale or, if applicable, importation of alcohol, denatured alcohol and uncrystallizable honey, the 50% rate will be applied.

Under this scheme, pursuant to Articles 1o. and 2o. fraction I, subsection B) of the law in question, those who carry out the sale of alcohol or denatured alcohol with the purpose of commercializing them, are taxpayers of the IEPS, in virtue that the referenced law does not establish that only the first sale of said products will be taxed, so the subsequent sales cause said tax.

This is without prejudice to the fact that said sales are exempt when the taxpayers comply with the obligations established in subsection e) of fraction I of Article 8o. of the cited law that are applicable to them.

Origin

First precedent

139/2004/IEPS

Office 325-SAT-IV-B-92423 of December 17 of 2004, through which the First Modification to the compilation of normative criteria is issued, Bulletin 2004.

2/IEPS/N

Pesticides. Accreditation of the acute toxicity hazard category of pesticides.

Articles 1o., fraction I and 2o., fraction I, subsection I) of the IEPS Law provide that individuals and legal entities that, among other cases, sell or import pesticides are obligated to pay the tax and that the rate or, if applicable, the exemption of the respective tax will be applied according to the acute toxicity hazard category that will be determined according to the table established by said subsection I).

The third paragraph of the subsection in question states that the application of said table will be subject to the Official Mexican Standard "NOM-232-SSA1-2009, Pesticides: which establishes the requirements of the container, packaging and labeling of products technical grade and for agricultural, forestry, livestock, gardening, urban, industrial and domestic use", published in the DOF on April 13 of 2010, issued by the competent authority.

The Federal Commission for the Protection against Health Risks is the competent authority to issue the sanitary registration and to issue the import permit in which the acute toxicity hazard category is expressed, toxicological category as stated in said norm, in relation with the Regulation on Matters of Registration, Import and Export Authorizations and Export Certificates of Pesticides, Plant Nutrients and Toxic or Hazardous Substances and Materials.

Therefore, to determine the applicable tax rate or, if applicable, the exemption of the tax in the sale of pesticides within national territory as well as in their importation, the acute toxicity hazard category is proven with the valid sanitary registration and, if applicable, with the import permit, both issued by said Commission.

Origin

First precedent

2014

Office 600-04-07-2014-6961 of October 2 of 2014, through which the normative criteria approved in the third quarter of 2014 are made known.

Office 600-04-07-2014-87371 of December 17 of 2014, through which Bulletin 2014 is made known, with the number of normative criterion 2/2014/IEPS.

3/IEPS/N

IEPS Taxable Base. The exempt customs processing duty should not be considered.

Article 14 of the IEPS Law establishes that regarding the importation of goods, to calculate the tax, the value used for the purposes of the general import tax will be considered, added to the amount of the contributions and revenues that must be paid on account of the importation, with the exception of VAT.

Consequently, to determine the IEPS taxable base on importation, if by virtue of an international treaty taxpayers are exempt from payment of the customs processing duty, the amount of said exemption should not be added to the value of the merchandise that is imported.

This is because, in accordance with what is established in Article 5o. of the CFF, tax provisions that refer to the tax base are of strict application.

Origin

First precedent

21/2002/IEPS

Office 325-SAT-A-31676 of May 24 of 2002.

4/IEPS/N

Concept of milk for IEPS purposes.

Article 2o., fraction I, subsection G) of the IEPS Law establishes that in the sale or, if applicable, importation of flavored beverages that

contain any type of added sugars, the corresponding rate per liter shall apply.

For its part, Article 8, fraction I, subsection f) of the aforementioned Law establishes that said tax shall not be paid for the alienation of, among other products, milk in any presentation, including that which is mixed with vegetable fat.

Tax legislation does not define the concept of milk; however, there is both sanitary and commercial regulation that defines this concept and establishes the specifications that products must meet to be considered milk. Therefore, considering the inherent characteristics of milk, for the purposes of applying the exemption referred to in Article 8, fraction I, subsection f) of the IEPS Law, milk is understood as:

I.

The natural secretion of the mammary glands of cows or any other animal species, excluding colostrum, which complies with the applicable sanitary and commercial regulation.

Based on the foregoing, milks in their various commercial denominations, including flavored milk, are included, provided they comply with the specifications established in the Official Mexican Standards "NOM-155-SCFI-2012, Milk-Denominations, physicochemical specifications, commercial information and test methods" and "NOM-243-SSA1-2010, Products and services. Milk, dairy product, combined dairy product, mixture of milk with vegetable fat and dairy derivatives. Sanitary provisions and specifications. Test methods" in force.

II.

The mixture of milk with vegetable fat in its various commercial denominations, including flavored, provided they comply with the specifications established in the Official Mexican Standards "NOM-190-SCFI-2012, Mixture of milk with vegetable fat-Denominations, physicochemical specifications, commercial information and test methods"

and "NOM-243-SSA1-2010, Products and services.

Milk, dairy product, combined dairy product, mixture of milk

with vegetable fat and dairy derivatives. Sanitary provisions and specifications.

Test methods" in force.

III.

Infant formula, infant formula for special nutritional needs, follow-up formula, and follow-up formula for special nutritional needs, provided they comply with the specifications established in the Official Mexican Standard "NOM-131-SSA1-2012, Products and services.

Formulas for infants, follow-up and for special nutritional

needs. Foods and non-alcoholic beverages for infants and young children. Sanitary and nutritional provisions and specifications. Labeling and test methods" in force.

The aforementioned products, even if they contain added sugars dissolved in water, are included in the aforementioned exemption.

Origin

First antecedent

2014

Office 600-04-07-2014-87379 of December 15,

2014, through which the normative criteria

approved in the fourth quarter of 2014 are made known.

Office 600-04-07-2014-87371 of December 17

2014, through which Bulletin 2014 is made known, with the number

of normative criterion 5/2014/IEPS.

5/ IEPS/N

Dairy products and combined dairy products. They are subject to the IEPS

applicable to flavored beverages when sugars are dissolved in water during their manufacturing process.

Article 2, fraction I, subsection G) of the IEPS Law establishes that in the

alienation or, in its case, importation of flavored beverages that

contain any type of added sugars, the corresponding rate per liter

shall apply.

For its part, Article 3, fraction XVIII of the Law mentioned in the previous

paragraph defines flavored beverages as non-alcoholic beverages

prepared by dissolving in water any type of sugars and that

may include additional ingredients such as flavorings, natural,

artificial or synthetic, added or not, of juice, pulp or nectar, of fruits or of

vegetables or legumes, of their concentrates or extracts and other food additives,

and which may or may not be carbonated.

According to fraction XX of the aforementioned Article 3, sugars are

monosaccharides, disaccharides and polysaccharides, provided that in the latter case

they are used as sweeteners with caloric contribution.

There is a great variety of products on the market in which milk is only

a component, which must meet the specifications established

in the sanitary and commercial regulation for such effect; these products are

called dairy products and combined dairy products and may

contain added sugars dissolved in water.

In virtue of this, the dairy products and combined dairy products referred to in the

Official Mexican Standards "NOM-183-SCFI-2012, Product

Dairy product and combined dairy product-Denominations, specifications

physicochemical, commercial information and test methods" and "NOM-243- SSA1-2010, Products and services. Milk, dairy product , combined dairy product

, mixture of milk with vegetable fat and dairy derivatives.

Sanitary provisions and specifications. Test methods" in force, are

located in the case provided for in Article 2, fraction I, subsection G) of the Law

of the IEPS and consequently are subject to the payment of said tax, when

sugars are dissolved in water in their manufacturing process.

What is stated in the previous paragraph does not apply when for the elaboration of

dairy products and combined dairy products sugars are added by

means of procedures other than dissolution in water.

Origin

First antecedent

2014

Office 600-04-07-2014-87379 of December 15

2014, through which the normative criteria

approved in the fourth quarter of 2014 are made known.

Office 600-04-07-2014-87371 of December 17, 2014, through which it is given

to know Bulletin 2014, with the number

of normative criterion 6/2014/IEPS.

6/IEPS/N

Food preparations that require an additional process for their

consumption .

Article 2, fraction I, subsection J), of the IEPS Law establishes that the

alienation or, in its case, the importation of non-basic foods with a

caloric density of 275 kcal or greater per 100 grams are taxed at the rate of 8%.

The numeral 8, subsection J) of fraction I of Article 2

of the IEPS Law, taxes prepared foods based on cereals, that is, those

products that are ready to be consumed by not requiring an additional process

to be ingested directly.

Therefore, regarding food preparations that require some

additional process prior to being ingested directly, they will not be subject to

the payment of IEPS, this by virtue of the fact that they are not considered finished products nor

susceptible for direct consumption.

Article 2, fraction I, subsection J), numeral 1 of the IEPS Law, taxes

snacks, that is, those products made from flours, seeds,

tubers, cereals, grains and healthy and clean fruits that may be fried,

baked and exploded or toasted, which do not need to be ready

to be consumed to be subject to the aforementioned tax.

Therefore, food preparations for the elaboration of snacks that

require an additional process such as frying or explosion based on hot

air, among others, are taxed at the IEPS rate when their

caloric density is 275 kcal or greater per 100 grams.

Origin

First antecedent

2014

Office 600-04-07-2014-4289 of July 1

2014, through which they are given

to know the normative criteria

approved in the second quarter of 2014.

Office 600-04-07-2014-87371 of December 17, 2014, through which it is given

to know Bulletin 2014, with the number

of normative criterion 7/2014/IEPS.

7/IEPS/N

Confectionery products and ice creams whose ingredient is chewing gum or gum

chewing.

Article 2, fraction I, subsection J) of the IEPS Law establishes that the

alienation, or in its case, the importation of non-basic foods with a

caloric density of 275 kcal or greater per 100 grams is taxed

at the rate of 8%.

Article 2-A, fraction I, subsection b), numeral 5 of the IVA Law establishes

that the alienation of chewing gums or chewing gums is taxed at the

rate of 16%.

Regarding non-basic foods such as confectionery products, ice creams,

sorbet and ice pops, among others, that contain as an ingredient chewing gums or

gum chewing, they will be subject to the 8% rate of IEPS when their

caloric density is 275 kcal or greater per 100 grams.

It is clarified that when the product is exclusively chewing gum or gum

chewing, that is, it is the product made from natural gums or

synthetic gums, polymers and copolymers, added to other ingredients and

food additives, it will be subject to the 16% IVA rate and the IEPS will not be paid

when the taxpayer takes the benefit provided for in Article 3.3 of the

"Decree that compiles various fiscal benefits and establishes measures of

administrative simplification", published in the DOF on December 26, 2013.

Origin

First antecedent

2014

Office 600-04-07-2014-4289 of July 1, 2014, through which it is given

to know the normative criteria

approved in the second quarter of 2014.

Office 600-04-07-2014-87371 of December 17, 2014, through which it is given

to know Bulletin 2014, with the number

of normative criterion 8/2014/IEPS.

8/IEPS/N

Edible grade gelatin or gelatin. Its alienation or importation

is subject to the payment of IEPS when it contains sugars or other

sweeteners with a caloric density of 275 kilocalories or greater per

each 100 grams.

Article 2, fraction I, subsection J) of the IEPS Law establishes that the

alienation, or in its case, the importation of non-basic foods with a

caloric density of 275 kcal or greater per 100 grams is taxed

at the rate of 8%; regarding this, numeral 2, of the subsection in question

taxes confectionery products.

For its part, Article 3, fraction XXVII of the same Law, specifies that it is

understood by confectionery products, as sweets and candies, caramels, sweet

imitation of marzipan, gelatin or gelatin, prepared gelatin or jellatin,

marshmallow, marzipan, peladilla, nougat, among others.

According to what has been stated, it is estimated that the gelatin or gelatin referred to in the

previous paragraph, necessarily must refer to a food product by

being the nature of the good to which the cited subsection J) refers.\ Furthermore, considering that gelatin or gelatin is located within

the group of confectionery products, it must include within its components the

sugar or other sweeteners, without prejudice to the fact that it may contain other

additional ingredients suitable for human consumption.

For the above and based on the elements that regulate this tax itself,

for the purposes of Articles 2, fraction I, subsection J), numeral 2, and 3,

fraction XXVII of the IEPS Law, it is estimated that the alienation or importation

of edible grade gelatin or gelatin will be subject to the payment of IEPS

when it contains sugars or other sweeteners and always that its caloric density

is 275 kilocalories or greater per 100 grams.

Origin

First antecedent

Second Resolution of

Modifications to the RMF for

2015

Published in the DOF on May 14,

2015, Annex 7, published in the DOF on May 21

9/IEPS/N

Balance in favor derived from the calculation of IEPS according to Article 2,

fraction I, subsections D) and H) of the IEPS Law. It can only be offset

against the tax established in the same article, fraction and subsections.

Article 2, fraction I, subsections D) and H) of the IEPS Law establishes that to the

value of the alienation and importation of automotive fuels and

fossil fuels, the corresponding rates and quotas shall apply.

Likewise, Article 2-A of the IEPS Law establishes that, without prejudice to what is

stated in Article 2, fraction I, subsections D) and H) of said Law, in the

alienation of gasoline and diesel in national territory, certain

quotas shall apply and refers in its penultimate paragraph that the resources that

are collected under the terms of the aforementioned Article 2-A, will be destined to the

federative entities, municipalities and territorial demarcations, according to what is

established in the

LCF.

According to Article 5, fourth paragraph of the IEPS Law, when in the

monthly payment declaration a balance in favor results, the taxpayer may only

offset it against the tax due that corresponds to him against the

subsequent monthly payments until exhausted.

Now, taking into account the diverse structure that each one of

the different specific objects contained in the IEPS Law has, as well as the

legislative process of the Decree published in the DOF on December 30, 1980

through which it was issued, it is concluded that the IEPS Law contains

diverse taxes according to each of the specific cases it contemplates.

Therefore, it is estimated that the mechanism of offsetting balances in favor

referred to in Article 5, fourth paragraph of the aforementioned Law, is only

proceeding with respect to the tax due that corresponds to the same specific

case from which the balance in favor derives.

Consequently, the balance in favor originated by the determination of the tax

established in Article 2, fraction I, subsections D) or H) of the IEPS Law, only

can be offset against the determination of the tax established in the

same article, fraction and subsection that originated it, and not against the IEPS

established in Article 2-A of the IEPS Law.

V.

Criteria of the LFD

1/LFD/N

Rights. When certification of files or records is requested, the

corresponding right must be paid for each letter or folio size sheet.

Taxpayers who request from the tax authorities the issuance of

certified copies of files or records, must pay the right

established in Article 5, fraction I of the LFD for the issuance of each

letter or folio size sheet of which the record or file consists,

regardless of whether a global certification of the records contained in

it is made.

Origin

First antecedent

62/2002/LFD

Office 325-SAT-IV-B-75015 of December 16

2/LFD/N

Rights for use or enjoyment of federal real estate. Cases in which

the exemption does not apply.

To be in the exemption cases established in Article 233,

fractions III and IV of the LFD, it is necessary that the society or association that

uses, enjoys or takes advantage of a public domain real estate of the Federation,

destines the real estate or develops actions aimed at fulfilling the

purposes referred to in said fractions, and furthermore, develops them in the

real estate for which it intends to be exempt from the payment of rights.

On the other hand, it will be understood that it destines the real estate to such purposes or

developing activities aimed at the same, when in terms of Article 57 of the CFF Regulation it has as the predominant activity the

development of the purposes established in the fractions mentioned of the LFD.

The above, due to the fact that the performance of sporadic activities of

research or reforestation does not imply destining a real estate to such purposes

or to the development of activities aimed at their materialization, such as what the

law requires to be exempt from the payment of rights.

Origin

First antecedent

29/2001/LFD

Office 325-SAT-A-31123 of September 14

2001, through which it is given

to know the new Compilation of

Normative Criteria 2001.

VI.

Criteria of the LISH

1/LISH/N

Refunds, discounts and bonuses from periods prior to January 1

2015. They are not applicable to the rights provided for in title

third of the LISH for assignees.

Article two, fraction II of the Decree by which the LISH is issued, amends, adds and repeals various provisions of the LFD and LCF and

issues the FMP Law, published in the DOF on August 11, 2014,

provides that during the 2014 fiscal year, Petróleos Mexicanos and its

subsidiary organisms will pay the rights provided for in articles 254 to

261 of the LFD in force in such exercise for the activities they carry out under

the umbrella of their assignments, and that from January 1, 2015, they will pay the

rights provided for in Title Three of the LISH.

The regime of the rights provided for in articles 254 to 261 of the LFD for the

fiscal year of 2014, is different from the regime of the rights provided for in the

third title of the LISH and said tax regimes are not complementary

with each other.

Therefore, the rights provided for in title three of the LISH, in force from

January 1, 2015, must not suffer adjustments or modifications due to

refunds, discounts or bonuses corresponding to hydrocarbons extracted in periods

prior to said date.

Origin

First antecedent

Third Resolution of

Modifications to the RMF for

2015

Published in the DOF on July 2, 2015,

Annex 7, published in the DOF on July 10

2/LISH/N

Deduction percentages for contractors and assignees. Their application

does not constitute an option.

Articles 32, section A, first paragraph and 46, fourth paragraph of the LISH,

dispose that for the purposes of determining the ISR, contractors and

assignees, instead of applying the deduction percentages established in

articles 33 and 34 of the ISR Law, must apply the percentages

established by the aforementioned articles of the LISH.

Regarding this matter, articles 32, section A, first paragraph and 46, fourth

paragraph of the LISH, do not provide as an option for said taxpayers the

application of percentages lower than those provided for in such articles.

Regarding this and in accordance with what is established in Article 5, first

paragraph of the CFF, tax provisions that refer to the determination

of the tax base, are of strict application.

In that sense, contractors and assignees must apply the percentages

established by articles 32, section A, first paragraph and 46, fourth

paragraph of the LISH, without the application of a lower percentage being valid.

Origin

First antecedent

Fourth Resolution of

Modifications to the RMF for

2015

Published in the DOF on September 29

2015, Annex 7, published on the same

date of the Modification.

3/LISH/N

Deduction percentages for contractors and assignees. They are not

applicable to other types of taxpayers.

Articles 32, section A, first paragraph and 46, fourth paragraph of the LISH,

dispose that for the purposes of determining the ISR, contractors and

assignees, instead of applying the deduction percentages established in

articles 33 and 34 of the ISR Law, must apply the percentages

established by the aforementioned articles of the LISH.

Regarding this matter, articles 32, section A, first paragraph and 46, fourth

paragraph of the LISH, do not contemplate taxpayers other than contractors

and assignees mentioned.

Therefore, the contractors and assignees referred to in the LISH are the

only taxpayers who must apply the percentages established by articles 32, section A, first paragraph and 46, fourth

paragraph of said law.

The above, since in accordance with what is established in Article 5,

first paragraph of the CFF, tax provisions that refer to the subjects

of the tax, are of strict application.

Origin

First antecedent

Fourth Resolution of

Modifications to the RMF for

2015

Published in the DOF on September 29, 2015, Annex 7, published on the same

date of the Modification.

4/LISH/N

Necessary expenditures for the exploration, extraction, transportation or

delivery of hydrocarbons. They constitute deductible costs and expenses for the

determination of the right by shared profit.

Article 40, fraction IV, first sentence of the LISH provides that, for the

determination of the base of the right by shared profit, costs and expenses will be

deductible, considering for such effects the

expenditures necessary for the extraction of oil or natural gas deposits determined in accordance with Mexican Financial Reporting Standards,

except for the investments referred to in fractions I, II and III of said article.

For its part, the second sentence of the fraction in question establishes that the

only costs and expenses that can be deducted will be those of exploration,

transportation or delivery of hydrocarbons.

Regarding this, sections VI and VII of Chapter II of the Guidelines for the

elaboration and presentation of costs, expenses and investments; the procurement

of goods and services in contracts and assignments; the accounting and

financial verification of contracts, and the updating of royalties in contracts and of the

extraction right of hydrocarbons, published by the Ministry of

Finance and Public Credit in the DOF on March 6, 2015 and its

modifications published on July 6, 2015 and November 28, 2016,

establish various guidelines regarding deductible costs, expenses and investments for the effects of the right by shared profit.

From the harmonious interpretation of Article 40, fraction IV, first and second

sentences of the LISH, it is derived that for the determination of the base of the

right by shared profit, both the expenditures

necessary for the extraction of oil or natural gas deposits, with

the exception of the expressly indicated investments, as well as the costs and

expenses for the exploration, transportation or delivery of hydrocarbons, will be deductible,

provided that the aforementioned guidelines and the rest of the applicable regulations are met.

Origin

First antecedent

Fourth Resolution of

Modifications to the RMF for

2015

Published in the DOF on September 29, 2015, Annex 7, published on the same

date of the Modification.

5/LISH/N

Hydrocarbon exploration right. Deductibility for the

determination of the base of the right by shared profit.

Article 42, fraction II of the LISH establishes that for the calculation of the payments

provisional monthly of the right by shared profit, it can be

decreased from the value of the hydrocarbons extracted in the period in question,

the hydrocarbon exploration right effectively paid.

However, for the purposes of the annual payment of the right by shared

profit, Article 40 of the LISH does not authorize as deductible the payment of the

hydrocarbon exploration right; likewise, there is no other

legal provision that authorizes the deduction of said concept for the

determination of the base or the payment declaration of the annual,

of the right by shared profit.

Therefore, the hydrocarbon exploration right effectively paid

It may only be reduced for the calculation of monthly provisional payments for the shared profit right under the terms of Article 42, Section II of the Hydrocarbons Law (LISH), but it shall not be deductible for the determination of the annual base of said right under the terms of Article 40 of the LISH.

This is because, in accordance with Article 5, first paragraph of the Federal Tax Code (CFF), tax provisions referring to the determination of the tax base are of strict application.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2015

Published in the DOF on September 29, 2015, Annex 7, published on the same date as the Modification.

6 /LISH/N

Thin Capitalization. Its exception is only applicable to assignees and contractors referred to in the Hydrocarbons Law.

Article 28, Section XXVII, seventh paragraph of the Income Tax Law (LISR) provides that debts that accrue interest to the taxpayer for the calculation of the amount in excess of three times their book capital shall not be included, among others, those incurred for the construction, operation, or maintenance of productive infrastructure linked to strategic areas for the country.

Article 64 of the Regulations of the Income Tax Law states that for the purposes of the provision referred to in the previous paragraph, strategic areas for the country shall be considered those referred to in Article 5 of the Foreign Investment Law.

Article 5, Section I of the Foreign Investment Law considers the exploration and extraction of petroleum and other hydrocarbons as one of such strategic areas, under the terms of Articles 27, seventh paragraph, and 28, fourth paragraph of the Political Constitution of the United Mexican States and the respective regulatory law.

Article 1, first paragraph of the Hydrocarbons Law states that this law is regulatory of Articles 25, fourth paragraph; 27, seventh paragraph, and 28, fourth paragraph of said Constitution and provides, in its Article 5, first paragraph, that only the Nation shall carry out exploration and extraction activities of hydrocarbons, through the assignees and contractors referred to in the aforementioned law.

Therefore, the exception referred to in the first paragraph of this criterion is only applicable to the assignees and contractors referred to in the LISH, regarding the construction, operation, or maintenance of productive infrastructure linked to the exploration and extraction of hydrocarbons, under the terms of Article 28, Section XXVII, seventh paragraph of the Income Tax Law.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2015

Published in the DOF on September 29, 2015, Annex 7, published on the same date as the Modification.

7/LISH/N

Permanent Establishment for the purposes of the activities referred to in the Hydrocarbons Law.

Article 2, first paragraph of the Income Tax Law states that a permanent establishment is considered any place of business where business activities or independent personal services are developed, partially or totally, and it shall be understood as a permanent establishment, among others, any place of exploration, extraction, or exploitation of natural resources.

Article 64, first paragraph of the LISH provides that for the purposes of said law and the Income Tax Law, a permanent establishment is considered constituted when a resident abroad carries out the activities referred to in the Hydrocarbons Law, in national territory or in the exclusive economic zone over which Mexico has rights, in a period that sums together more than 30 days in any period of 12 months.

The Supreme Court of Justice of the Nation has determined that international treaties are in a second plane immediately below the Political Constitution of the United Mexican States and above federal and local law.

Consequently, it will only be considered that a resident abroad who carries out the activities referred to in the Hydrocarbons Law has a permanent establishment in the country if, in addition to constituting it under the terms of Article 64 of the LISH, they also have it in accordance with the treaty to avoid double taxation that Mexico has in force and that is applicable to said resident.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2015

Published in the DOF on September 29, 2015, Annex 7, published on the same date as the Modification.

8/LISH/N

Registration of accounting operations of assignees and contractors. National or registration currency must be used.

Articles 28, Section II of the CFF and 33, Section B, Section XI of the Regulations of the CFF provide that persons who, according to tax provisions, are obliged to keep accounting, must record the values of accounting records or entries in national currency.

Article 1 of the Monetary Law of the United Mexican States establishes that the unit of the monetary system of the United Mexican States is the peso.

On the other hand, Article 37, Section B, Section I of the LISH states that it corresponds to the Ministry of Finance and Public Credit to determine the bases and rules on the registration of costs, expenses, and investments of the contract for the exploration and extraction of hydrocarbons, in accordance with the guidelines it issues.

Numbers 3 and 4 of the Guidelines for the preparation and presentation of costs, expenses, and investments; the procurement of goods and services in contracts and assignments; the accounting and financial verification of contracts, and the update of royalties in contracts and the extraction right of hydrocarbons, published by the Ministry of Finance and Public Credit in the DOF on March 6, 2015, and its modifications published on July 6, 2015, and November 28, 2016, establish that contractors must keep their accounting in accordance with the CFF, its Regulations, and the Financial Information Standards in force in Mexico, which must record values in the registration currency, which for legal purposes and in all cases is the "Mexican peso", regardless of the other currencies used by the contractor.

Consequently and in accordance with the aforementioned guidelines, the records or accounting entries that make up the accounting of the contractors referred to in the LISH must record the values of the records or accounting entries in national currency.

Origin

First antecedent

Fourth Resolution of Modifications to the RMF for 2015

Published in the DOF on September 29, 2015, Annex 7, published on the same date as the Modification.

9/LISH/N

Alienation of fixed assets used in petroleum activities. Fiscal treatment in matters of Income Tax.

Article 18, Section IV of the Income Tax Law establishes that taxpayers shall consider as taxable income the gain derived from the alienation of fixed assets, while Article 25, Section V of the same legislation states that losses from their alienation may be deducted.

When contracts for the exploration and extraction of hydrocarbons under the profit or production sharing modality indicate that the contractor will maintain ownership of all materials generated or acquired to be used in petroleum activities during their validity, the ownership of which will pass automatically to the Nation upon termination for any reason of the respective contract, and they may sell them before said moment complying with the corresponding requirements, the aforementioned articles apply to such alienation.

Consequently, if such materials constitute fixed assets and since the contractor maintains ownership during the validity of the contract, they are obliged to accumulate to their other income the gain derived from their alienation or, in their case, have the right to deduct losses from such alienation.

On the other hand, Article 20, first paragraph of the LISH states that in cases where the contractor alienates assets whose cost, expense, or investment have been recovered totally or partially in accordance with the contract, the amount received for said operation shall be delivered to the Mexican State, through the FMP or, with prior authorization from the Ministry, an equivalent amount shall be deducted from the counterpayments corresponding to the contractor.

For its part, Article 25, Section III of the Income Tax Law provides that taxpayers may deduct for the purposes of said tax, net expenses of discounts, bonuses, or refunds.

Consequently, provided that the requirements established in the applicable tax and contractual provisions are met, the aforementioned contractors may deduct for the purposes of determining the Income Tax due, the amount that was effectively delivered to the FMP.

Origin

First antecedent

RMF for 2016

Published in the DOF on December 23, 2015 and Annex 7, published in the DOF on January 12, 2016.

10/LISH/N

Transfer to the State of assets generated or acquired under the Exploration and Extraction Contracts. Fiscal treatment in matters of Income Tax.

Article 58-A, Section II of the CFF establishes that tax authorities may modify the tax loss through the presumptive determination of the price at which taxpayers alienate goods, when the alienation is carried out at cost or less than cost, unless the taxpayer proves that circumstances determined the need to carry out the alienation under those conditions.

Article 28, Section VII of the LISH establishes that contracts for the exploration and extraction of hydrocarbons provided for in the Hydrocarbons Law, shall contain the obligation for contractors to transfer to the State the assets generated or acquired under the contract free of charge, payment, or any indemnification.

Consequently, for the purposes of determining the loss referred to in the first paragraph, derived from the transfer to the State of assets generated or acquired under the contract, it may be considered that circumstances determined the need to carry out said transfer free of charge, payment, or any indemnification, under the terms of Article 28, Section VII of the LISH.

Origin

First antecedent

RMF for 2016

Published in the DOF on December 23, 2015 and Annex 7, published in the DOF on January 12, 2016.

11/LISH/N

Contributions to investment trusts to fund abandonment operations in the contractual area. The amount equivalent to the interests that are reduced to calculate the quarterly contributions constitutes taxable income for the contractor.

Article 16, first paragraph of the Income Tax Law establishes that legal entities resident in the country, including the association in participation, shall accumulate all income in cash, in goods, in service, in credit, or of any other type, that they obtain in the fiscal year.

Contracts for the exploration and extraction of hydrocarbons under the production sharing modality establish that contractors are obliged to constitute an investment trust to fund abandonment operations in the contractual area.

In accordance with the aforementioned contracts, it is noted that for the calculation of the quarterly contributions that must be made to the abandonment trust, the interests generated each year are subtracted from the remaining amount of abandonment costs at the beginning of the calculation year, estimated in accordance with the approved development plan, as modified.

Therefore, with the reduction of interests regarding the contributions that the contractor must make to the abandonment trust, said contractor sees their patrimony increased by the amount that they will no longer be obliged to contribute to the trust.

Therefore, the contractor shall consider as taxable income for the purposes of Article 16 of the Income Tax Law, an amount equivalent to the interests generated each year that are subtracted from the remaining amount of abandonment costs at the beginning of the calculation year.

Origin

First antecedent

RMF for 2016

Published in the DOF on December 23, 2015 and Annex 7, published in the DOF on January 12, 2016.

12/LISH/N

Provision of abandonment reserve. Not deductible for Income Tax purposes.

Article 28, Section VII of the LISH provides that contractors must comply with abandonment and dismantling obligations in accordance with applicable legal provisions and what is stated in the respective contract.

In this sense, Number 17 of the "Modification to the Guidelines for the preparation and presentation of costs, expenses, and investments; the procurement of goods and services in contracts and assignments; the accounting and financial verification of contracts, and the update of royalties in contracts and the extraction right of hydrocarbons", published on July 6, 2015 in the DOF by the Ministry, establishes that once the Exploration Plan and/or Development Plan is approved by the National Hydrocarbons Commission, the contractor or assignee must create the abandonment reserve, in accordance with Financial Information Standard C-18, in which they will register abandonment provisions and reserves in accordance with the rules issued for such purposes by the National Hydrocarbons Commission and the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector.

Financial Information Standard C-18 "Obligations associated with the retirement of property, plant, and equipment" establishes that the obligation associated with the retirement of property, plant, and equipment must be recognized as a provision that increases the acquisition cost of said assets.

Article 28, Section VIII of the Income Tax Law provides that provisions for the creation or increase of complementary asset or liability reserves that are constituted against the acquisitions or expenses of the fiscal year shall not be deductible.

In this sense, the abandonment reserve provision created in accordance with Financial Information Standard C-18 to comply with the aforementioned Guidelines, is not deductible in accordance with Article 28, Section VIII of the Income Tax Law.

Origin

First antecedent

RMF for 2017

Published in the DOF on December 23, 2016, Annex 7, published in the DOF on December 27, 2016.

13/LISH/N

Deduction percentages for contractors and assignees. Only applicable to investments destined for the activities indicated in them.

Articles 33 and 34 of the Income Tax Law indicate the maximum authorized percentages regarding expenses and deferred charges, expenditures made in pre-operational periods, and fixed assets by type of good, respectively.

Articles 32, Section A, first paragraph, and 46, fourth paragraph of the LISH provide that for the purposes of determining the Income Tax, instead of applying the deduction percentages established in Articles 33 and 34 of the Income Tax Law, contractors and assignees must apply the percentages established in the aforementioned articles of the LISH.

From the statement of motives that gave rise to the LISH, it is evident that the legislator estimated that since the Income Tax Law did not provide deduction profiles for assets used in hydrocarbon exploration and extraction activities, the LISH must include the deduction percentages of investments made for: exploration, secondary and enhanced recovery, non-capitalizable maintenance, development and extraction of crude oil or natural gas; and in storage infrastructure, the necessary transport for the execution of a contract, and transport or storage tanks; in this sense, when the LISH states that the percentages provided for in it will be applied to the original amount of investments made "for" or "in" the activities described in it, it is evident that the legislator's intention was only to substitute the depreciation percentages provided for in the LISR regarding investments destined to said activities.

Consequently, for the purposes of determining the Income Tax, contractors and assignees shall only apply the percentages provided for in Articles 32, Section A, first paragraph, and 46, fourth paragraph of the LISH, to investments destined for the activities described in the aforementioned provisions; while investments that are not destined for the aforementioned activities will continue to be subject to the maximum authorized deduction percentages provided for in Articles 33 and 34 of the Income Tax Law.

Origin

First antecedent

RMF for 2017

Published in the DOF on December 23, 2016, Annex 7, published in the DOF on December 27, 2016.

B.

Derogated Normative Criteria.

The following criteria will continue to produce effects regarding the legal or factual situations that they regulated at the time:

I.

CFF Criteria

7/CFF/N

Update of contributions, revenues, and compensation of taxpayer credits.

Article 17-A of the CFF establishes that the amount of contributions, revenues, as well as refunds due to the federal treasury, shall be updated by applying the update factor to said amounts. To determine the update factor, the INPC of the month prior to the most recent of the period shall be divided by said index of the month prior to the oldest of the same period.

Now, the update procedure entered into force in 1990 and the aforementioned article did not indicate the most recent nor the oldest month, but simply the oldest month as the starting parameter for calculation; on the other hand, considering the inflation of December 1989 would give retroactive effects to the update whose period starts from 1990.

In this context, when in accordance with tax provisions the update of contributions, revenues, and refunds due to the federal treasury corresponding to the fiscal year of 1989 or previous fiscal years must be carried out, it shall be considered that January 1990 is the oldest month of the period and, consequently, that the immediate previous month is December 1989.

This is because ARTICLE SECOND, Section II of the TRANSITORY PROVISIONS of the law that establishes, reforms, adds, and derogates various fiscal provisions and that adds the LGSM, published in the DOF on December 28, 1989, states that the oldest month of the period is December 1989.

Origin

First antecedent

2.1.2.

Office 325-SAT-IV-C-7363 of September 23, 1997, through which the First Update of the Substantive Compilation of Internal Taxes is issued.

Reason for derogation

The normative criterion establishes how contributions, revenues, and refunds due to the federal treasury corresponding to the 1989 fiscal year or previous years must be updated.

9/CFF/N

Resolution of consultations regarding the methodology used in the determination of prices or amounts of counterpayments, in operations with related parties. Subjects who may formulate them.

Article 34-A of the CFF establishes that tax authorities may resolve consultations formulated by interested parties regarding the methodology used in the determination of prices or amounts of counterpayments, in operations with related parties, under the terms of Article 179 of the Income Tax Law.

From the analysis of Article 34-A of the CFF, it is clear that the reference made to Article 179 of the Income Tax Law is for the purposes of the concept of related parties that the latter provision contains, without distinguishing whether the operations subject of the consultations are those celebrated with related parties resident in Mexico or resident abroad.

Consequently, legal entities that celebrate operations with related parties resident in Mexico or abroad, may be interested subjects to formulate the consultations referred to in Article 34-A of the CFF.

Origin

First antecedent

15/2012/CFF

Office 600-04-02-2012-57567 of July 23, 2012 through which the normative criteria approved in the first half of 2012 are made known.

Office 600-04-02-2012-69616 of November 29, 2012 through which Bulletin 2012 is made known, with the normative criterion number 15/2012/ CFF.

Derogation

RMF for 2022

Published in the DOF on December 27, 2021. Annex 7 published in the DOF on January 05, 2022.

Reason for derogation

It is derogated by virtue of the fact that through a Decree published in the DOF on November 12, 2021, Article 179 of the Income Tax Law was reformed.

II.

Income Tax Law Criteria

4/ISR/N

Fiscal residence. Ways to prove it.

Article 6, first paragraph of the Regulations of the Income Tax Law establishes that for the purposes of Article 4 of said Law, taxpayers may prove their fiscal residence in a country with which Mexico has celebrated a treaty to avoid double taxation, through residence certifications or the presentation of the declaration of the last fiscal year of the Income Tax.

Therefore, taxpayers may prove fiscal residence in a country with which Mexico has celebrated a treaty to avoid double taxation, through the residence certification, or the certification of the presentation of the declaration of the last fiscal year of the Income Tax.

The Regulations of the Income Tax Law in its Article 6, first paragraph, refers to Article 5 of the Law in question, however, due to the issuance of the Income Tax Law published in the DOF on December 11, 2013, the content of Article 5, referred to, is reproduced in Article 4 of the current Income Tax Law.

Origin

First antecedent

2012

Office 600-04-02-2012-57567 of July 23, 2012 through which the normative criteria approved in the first half of 2012 are made known.

Office 600-04-02-2012-69616 of November 29, 2012 through which Bulletin 2012 is made known, with the normative criterion number 42/2012/ ISR.

Derogation

RMF for 2016

Published in the DOF on December 23, 2015. Annex 7 published in DOF on January 12, 2016.

Reason for derogation

The content of the criterion has been incorporated into Article 6, first paragraph of the Regulations of the Income Tax Law, published in the DOF on October 8, 2015.

14/ISR/N

Taxable income of persons other than exchange houses dedicated to the purchase and sale of foreign currency. Only the gain actually received should be taken into consideration.

In accordance with Articles 16 and 90 of the Income Tax Law, individuals and legal entities resident in Mexico are, as a general rule, obligated to accumulate the total income in cash, in goods, in services, in credit, or of any other type that they obtain during the fiscal year.

However, in the case of entities other than exchange houses that engage in the purchase and sale of foreign currency, income must be accumulated as determined in accordance with Articles 8, 18, fraction IX, 44, 45, 46, 133, and 134 of the Income Tax Law; that is, only the profit actually received shall be taken into consideration, provided that it is supported by the taxpayer's accounting.

This is without prejudice to other income they may receive, which must be accumulated in accordance with Articles 16 and 90 of the aforementioned legislation.

Origin

First precedent

15/2001/ISR

Official Letter 325-SAT-A-31123 of September 14, 2001, through which the new Compilation of Normative Criteria 2001 is made known.

Repeal

GPR for 2016

Published in the DOF on December 23, 2015. Annex 7 published in the DOF on January 12, 2016.

Reason for repeal

The content of the criterion has been incorporated into Article 12 of the Regulations of the Income Tax Law, published in the DOF on October 8, 2015.

15/ISR/N

Authorization to alienate shares at fiscal cost. The issuing society of the shares does not need to be constituted in Mexico.

Article 24, first paragraph of the Income Tax Law establishes that tax authorities will authorize the alienation of shares at fiscal cost in cases of restructuring of societies constituted in Mexico belonging to the same group, provided that the requirements indicated in said article are met.

Likewise, the last paragraph of the cited article clarifies that for the purposes of said article, a group is considered to be the set of societies whose shares with voting rights representing the share capital are direct or indirect property of the same persons in at least 51%, excluding those considered placed among the general investing public in accordance with rule 3.2.12., first paragraph of the GPR for 2015 and which have been effectively offered and placed among said public, unless they had been repurchased by the issuer.

From the above, it is evident that the societies that must be constituted in Mexico and belong to the same group, in the terms of Article 24, first paragraph of the Income Tax Law, are the alienating and the acquiring society, so the issuing society of the shares does not need to be constituted in Mexico, provided that the alienating and acquiring societies prove belonging to the same group and meet the requirements referred to in Article 24 of the Income Tax Law and its regulatory provisions.

Origin

First precedent

2012

Official Letter 600-04-02-2012-69615 of November 27, 2012, through which the normative criteria approved in the fourth quarter of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 54/2012/ISR.

Repeal

GPR for 2016

Published in the DOF on December 23, 2015. Annex 7 published in the DOF on January 12, 2016.

Reason for repeal

The content of the criterion has been incorporated into Article 27 of the Regulations of the Income Tax Law, published in the DOF on October 8, 2015.

32/ISR/N

Legal entities that carry out transactions with related parties resident in Mexico. Documentation and supporting information that must be retained.

Article 76, fraction I of the Income Tax Law establishes the obligation to keep accounting in accordance with the Federal Tax Code (CFF), its Regulations, and the Regulations of the Income Tax Law, as well as to make records in said accounting.

Article 28, fraction I of the CFF states that in cases where tax provisions refer to accounting, it shall be understood that the same is integrated, among other concepts, by supporting documentation of income and deductions.

Article 76, fraction XII of the Income Tax Law provides that legal entities that carry out transactions with related parties must determine their taxable income and authorized deductions, considering the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions; for these purposes, the cited fraction provides that legal entities must apply the methods established in Article 180 of the same Law, in order.

Consequently, legal entities that carry out transactions with related parties resident in national territory, in compliance with Articles 76, fractions I and XII of the Income Tax Law and 28 of the CFF, must obtain and retain the supporting documentation with which they demonstrate that:

I.

The amount of their taxable income and authorized deductions was carried out considering for those transactions the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions, and

II.

They applied the methods established in Article 180 of the Income Tax Law, in the order that the numeral itself indicates.

Origin

First precedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 67/2012/ISR.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the tax reform published in the DOF on January 12, 2021.

33/ISR/N

Legal entities. Concept of related parties.

Article 76, fraction XII of the Income Tax Law establishes that legal entities that carry out transactions with related parties must determine their taxable income and authorized deductions, considering the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions.

Article 179, fifth paragraph of the Income Tax Law provides that two or more persons are related parties when one participates directly or indirectly in the administration, control, or capital of the other, or when a person or group of persons participates directly or indirectly in the administration, control, or capital of said persons. Regarding partnerships in participation, their members are considered related parties, as well as the persons who, according to the cited paragraph, are considered related parties of said member.

From its analysis, it is observed that Article 179, fifth paragraph of the aforementioned Law, provides a generic definition of the concept of related parties, without restricting its application to the Title in which such provision is located and without there being any provision that contravenes it; since those contained in Articles 29, fraction II and 90, eleventh paragraph of the Income Tax Law, are only applicable to said determined scenarios.

Consequently, the concept of related parties contained in the aforementioned Article 179, fifth paragraph, is applicable to the Income Tax Law and specifically to the obligation provided in Article 76, fraction XII of said Law.

Origin

First precedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 68/2012/ISR.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the tax reform published in the DOF on January 12, 2021.

34/ISR/N

Legal entities that carry out transactions with related parties regardless of their tax residency. Compliance with obligations.

Article 76, fraction XII of the Income Tax Law establishes that legal entities that carry out transactions with related parties must determine their taxable income and authorized deductions, considering the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions.

Additionally, the cited fraction provides that legal entities must apply the methods established in Article 180 of the same Law, in the order referred to in said article.

From its analysis, it is clear that the provision contained in Article 76, fraction XII of the Income Tax Law determines an obligation that all legal entities carrying out transactions with related parties must comply with, regardless of the tax residency of the latter.

Consequently, legal entities that carry out transactions with related parties resident in Mexico and those that carry out transactions with related parties resident abroad must comply, among other obligations, with those indicated in Article 76, fraction XII of the Income Tax Law:

I.

Determine their taxable income and authorized deductions, considering the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions, and

II.

Apply the methods established in Article 180 of the Income Tax Law, in the order established in said article.

This is without prejudice to what is provided in Article 76, fraction IX of the Income Tax Law, which determines the manner in which legal entities carrying out transactions with related parties resident abroad must comply with obligations.

Origin

First precedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 69/2012/ISR.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the tax reform published in the DOF on January 12, 2021.

35/ISR/N

Legal entities that carry out transactions with related parties. Application of OECD Guidelines.

Article 76, fraction XII of the Income Tax Law establishes that legal entities that carry out transactions with related parties must determine their taxable income and authorized deductions, considering the prices and amounts of consideration that they would have used with or among independent parties in comparable transactions; for these purposes, the cited fraction provides that legal entities must apply the methods established in Article 180 of the same Law, in the order provided in said article.

Article 179, last paragraph of the Income Tax Law states that, for the interpretation of what is provided in Chapter II of Title VI of said Law, the Guidelines on Transfer Pricing for Multinational Enterprises and Tax Administrations, approved by the OECD Council in 1995, or those that replace them, shall be applicable, to the extent that they are consistent with the provisions of the cited Law and treaties concluded by Mexico; said Guidelines were updated on July 22, 2010, by the aforementioned Council.

From the analysis of Article 180 of the Income Tax Law, it is clear that it is located within Chapter II of Title VI of the cited Law and, consequently, for the interpretation of said article, legal entities that carry out transactions with related parties resident in Mexico may apply the Guidelines referred to in Article 179, last paragraph of the same Law, to the extent that they are consistent with the provisions of the relevant Law.

Origin

First precedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 70/2012/ISR.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the tax reform published in the DOF on January 12, 2021.

36/ISR/N

Net fiscal profit of the year. In its determination, the workers' participation in the company's profits should not be subtracted from the fiscal result of the year.

Article 77, third paragraph of the Income Tax Law provides that the net fiscal profit of the year is considered to be the amount obtained by subtracting from the fiscal result of the year, the income tax paid in accordance with Article 9 of such Law, the amount of non-deductible items for the purposes of said tax, except those indicated in Article 28, fractions VIII and IX of the cited Law, the workers' participation in the profits of the companies referred to in Article 9, fraction I of the same Law, and the amount determined in accordance with the fourth paragraph of the analyzed article.

Regarding this, Article 9, second paragraph of the Law in question establishes the procedure to determine the fiscal result of the year. In particular, fraction I of the referred paragraph indicates that, as part of said procedure, the fiscal profit will be obtained by decreasing from the total of the taxable income obtained during the year, the deductions authorized by Title II of such Law and the workers' participation in the profits of the companies paid during the year, in accordance with Article 123 of the Political Constitution of the United Mexican States.

Therefore, because the workers' participation in the profits of the companies paid during the year is already decreased in the fiscal result of the year, in accordance with Article 9, second paragraph of the Income Tax Law, said participation should not be subtracted again to determine the net fiscal profit of the year referred to in Article 77, third paragraph of the analyzed Law, because it is one of the exceptions referred to in the aforementioned paragraph.

Origin

First precedent

2014

Official Letter 600-04-07-2014-6961 of October 2, 2014, through which the normative criteria approved in the third quarter of 2014 are made known.

Official Letter 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 36/2014/ISR.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the reform of Article 77, third paragraph of the Income Tax Law, published in the DOF on November 12, 2021.

45/ISR/N

Refund of balances in favor. It is not an indispensable requirement the presentation by the worker of the written notice to the employer.

Article 97 of the Income Tax Law imposes on the withholding agent, among other obligations, the obligation to calculate the annual tax of each person who has provided them with subordinate personal services, with the exception of the situation in which the worker has communicated in writing, no later than December 31 of the fiscal year in question, that they would file the annual return on their own behalf according to Article 151 of the Regulations of the Income Tax Law.

Likewise, Article 97 of the Income Tax Law, in its fifth and sixth paragraphs, provides that the employer may compensate amounts in favor of their worker against future withholdings, and if this is not possible, then the worker may request the tax authorities for the refund of the uncompensated amounts.

In this context, considering the option that the worker has to request their refund directly, then it is sufficient that there is a balance in favor and the return of the year has been filed to be in a position to request the refund of the uncompensated amounts, provided that what is stated by Article 22 of the CFF and other applicable provisions is met.

What is stated in the previous paragraph coincides with the criterion established by the Second Chamber of the Supreme Court of Justice of the Nation through the jurisprudence thesis 2ª./J.110/2011.

Origin

First precedent

2012

Official Letter 600-04-02-2012-57567 of July 23, 2012, through which the normative criteria approved in the first semester of 2012 are made known.

Official Letter 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with normative criterion number 82/2012/ISR.

Repeal

GPR for 2016

Published in the DOF on December 23, 2015. Annex 7 published in the DOF on January 12, 2016.

Reason for repeal

The content of the criterion has been incorporated into Article 180 of the Regulations of the Income Tax Law, published in the DOF on October 8, 2015.

57/ISR/N

Simulation of legal acts in transactions between related parties.

It can be determined for income from wealth sources in the country, from any person obligated to pay the tax.

Article 177, nineteenth paragraph of the Income Tax Law establishes that for the purposes of Title VI of said Law and the determination of income from wealth sources in the country, tax authorities may, as a result of the exercise of their audit powers, determine the simulation of legal acts for tax purposes, provided that it concerns transactions between related parties.

Article 1 of the cited Law provides that individuals and legal entities are obligated to pay the Income Tax, regarding their income, regardless of the source of wealth from which they originate or from wealth sources situated in national territory.

Consequently, regarding transactions between related parties, tax authorities, when exercising their audit powers, can determine the simulation of legal acts for tax purposes, regarding income from wealth sources in the country of any person obligated to pay the Income Tax.

Origin

First precedent

99/2013/ISR

Official Letter 600-04-02-2013-11156 of April 22, 2013, through which the normative criteria approved in the first quarter of 2013 are made known, official letter 600-04-07-2013-16549 of December 10, 2013, through which Bulletin 2013 is made known, with normative criterion number 99/2013/ISR.

Reason for repeal

It is repealed due to the reform to Article 42-B of the CFF, published in the DOF on November 12, 2021.

64/ISR/N

Interest paid to residents abroad by multiple-object financial societies in transactions between related parties, deriving from loans or other credits.

Article 166, first paragraph of the Income Tax Law states that regarding income from interest, it will be considered that the source of wealth is in national territory when the capital is placed or invested in the country, or when the interest is paid by a resident in the country or a resident abroad with a permanent establishment in the country.

The seventh paragraph, fraction II, subsection a) of the referred article provides that the tax will be paid through withholding that will be made by the person making the payments and will be calculated by applying to the interest obtained by the taxpayer, without any deduction, the rate of 4.9%, among other cases, regarding interest paid to residents abroad from credit instruments placed among the general investing public referred to in Article 8 of the Income Tax Law, as well as the gain from their alienation, those received from certificates, acceptances, credit instruments, loans, or other credits from credit institutions, multiple-object financial societies that for the purposes of that Law are part of the financial system or auxiliary credit organizations.

The eleventh paragraph of the aforementioned Article 166 establishes that the rates provided in fractions I and II of the same will not be applicable if the effective beneficiaries, either directly or indirectly, individually or jointly with related persons, receive more than 5% of the interest derived from the instruments in question and are shareholders of more than 10% of the voting shares of the issuer, directly or indirectly, individually or jointly with related persons, or legal entities in which more than 20% of their shares are owned by the issuer, directly or indirectly, individually or jointly with related persons.

From the harmonious interpretation of the aforementioned provisions, it is evident that the limitation in the application of the 4.9% rate when referring to the interest derived from the instruments in question, is not circumscribed exclusively to interest paid to related parties deriving from credit instruments, but is also applicable to those received from certificates, acceptances, loans, or other credits, from multiple-object financial societies that for the purposes of the Income Tax Law are part of the financial system, among other entities, since there is no objective distinction in Article 166, eleventh paragraph of the Income Tax Law to grant a different treatment to said scenarios.

Origin

First precedent

First Resolution of Modifications to the GPR for 2017

Published in the DOF on May 15, 2017, Annex 7, published in the DOF on May 16, 2017.

Repeal

Third Resolution of Modifications to the GPR for 2022.

Published in the DOF on April 29, 2022. Annex 7 published in the DOF on May 06, 2022.

Reason for repeal

It is repealed due to the reform of Article 77, third paragraph of the Income Tax Law, published in the DOF on November 12, 2021.

III.

Criteria of the VAT Law

3/IVA/N

Transfer of tax at an incorrect rate.

Article 1 of the VAT Law establishes the obligation to pay VAT to individuals and legal entities that in national territory alienate goods, provide independent services, grant the temporary use or enjoyment of goods, or import goods or services; for such effect, by carrying out the described acts or activities, they must apply the rate of 16%.

Article 2-A of the VAT Law specifies the acts and activities to which the 0% rate applies; likewise, Articles 9, 15, 20, and 25 of the same Law establish the circumstances under which the tax will not be paid, considered as exempt acts or activities.

Article 4 of the VAT Law states that credit consists of subtracting the creditable tax from the amount resulting from applying the corresponding rate to the values indicated in the Law itself, considering as creditable tax the VAT transferred to the taxpayer and the tax itself paid by him in connection with the importation of goods and services, in the month in question.

To this effect, there are taxpayers who have incorrectly applied different rates than those legally required regarding operations with persons who, due to the acts or activities they perform, must transfer the tax at the 0% rate or not transfer tax when it comes to exempt acts or activities; in this sense, it is understood that the amount collected in excess does not constitute VAT as such, as it was not accrued at the correct rate, so that, since it is an improper transfer, the transferred amount cannot be considered as VAT and consequently cannot be used for credit purposes.

Therefore, the taxpayer who improperly transferred and collected an amount that cannot be considered as VAT must accumulate it for ISR purposes, and the taxpayer who paid that amount to the person who transferred it to him must consider it as an expense and not as creditable tax.

Origin

First antecedent

2014

Office 600-04-07-2014-6142 of August 14, 2014, through which the new normative criteria approved in the third quarter of 2014 are made known in advance. Office 600-04-07-2014-87371 of December 17, 2014, through which Bulletin 2014 is made known, with normative criterion number 3/2014/VAT.

Repeal

Fifth Resolution of Modifications to the FMF for 2015

Published in the DOF on November 19, 2015. Annex 7 published in the DOF on November 20, 2015.

Reason for repeal

The addition of non-binding criterion 9/VAT/NB in Annex 3 of the Fifth Resolution of Modifications to the FMF for 2015, published in the DOF on November 20, 2015.

25/VAT/N

VAT Compensation. Cases in which it proceeds.

Article 6 of the VAT Law provides that when a balance in favor results, the taxpayer may credit it against the tax due that corresponds to him in subsequent months until exhausted, request its refund, or carry out its compensation against other taxes in terms of what Article 23 of the CFF provides.

In this sense, in accordance with the cited grounds, the VAT balance in favor of a subsequent month may be compensated against the debt due by the taxpayer for the same tax corresponding to previous months, with its respective update and surcharges.

Origin

First antecedent

5.1.5.

Office 325-A-VII-19856 of September 25, 1995.

Repeal

FMF for 2019.

Published in the DOF on April 29, 2019. Annex 7 published in the DOF on April 30, 2019.

Reason for repeal

It is repealed because the legal and factual conditions for which it was created have changed, since currently Article 23 of the CFF only allows compensation against the same tax.

30/VAT/N

Commissions of insurance agents. Counterpayments to legal entities that do not have the status of insurance agents are not covered by the VAT exemption.

Article 15, fraction IX of the VAT Law provides that the tax corresponding to commissions of agents that correspond to the insurances cited in said fraction will not be paid.

Article 5, second paragraph of the CFF allows the provisions of common federal law to be applied subsidiarily; in this sense, in the absence of a tax norm establishing its definition, the expression insurance agents referred to in the previous paragraph can be interpreted in accordance with the Law of Insurance and Surety Companies.

Article 91, first paragraph of said law states that insurance agents are considered to be natural or legal persons who intervene in the contracting of insurances through the exchange of proposals and acceptance thereof, commercialization, and in the advice to celebrate them, to conserve them or modify them, according to the best convenience of the contracting parties.

The second paragraph of the aforementioned article indicates that the intermediation of insurance contracts, which have the character of adhesion contracts, may be carried out by the aforementioned insurance agents or through the legal entities provided for in Article 102 of the mentioned law.

From what is stated, it follows that the intermediation of insurance contracts, which have the character of adhesion contracts, may be carried out through a legal entity that is not an insurance agent, in accordance with the Law of Insurance and Surety Companies.

Therefore, the counterpayments of any legal entity that does not have the status of insurance agent, in accordance with the Law of Insurance and Surety Companies, that correspond to the insurances cited in Article 15, fraction IX of the VAT Law, are not covered by the exemption mentioned.

Origin

First antecedent

2012

Office 600-04-02-2012-69615 of November 27, 2012, through which the normative criteria approved in the fourth quarter of 2012 are made known.

Office 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 125/2012/VAT.

Repeal

Second Resolution of Modifications to the FMF 2016

Published in the DOF on May 6, 2016. Annex 7 published in the DOF on May 9, 2016.

Reason for repeal

It is repealed due to the inclusion of rule 4.3.11., in the Second Resolution of Modifications to the FMF for 2016, published in the DOF on May 6, 2016.

35/VAT/N

Tax on the importation of services provided in national territory by residents abroad. It accrues when the service is provided.

Article 24, fraction V of the VAT Law states that the importation of services is considered to be the use in national territory of the services referred to in Article 14 of the same instrument, when they are provided by non-residents in the country.

Article 26, fraction III of the aforementioned law provides that the moment of accrual of the tax is that in which the counterpayment is effectively paid, referring only to the cases provided for in fractions II to IV of Article 24 of the VAT Law; while Article 26, fraction IV of the same law states that, in the case of use in national territory of services provided abroad, the obligation to pay the tax will arise at the moment when the counterpayment is effectively paid.

Article 1, first paragraph of the CFF, in its relevant part, establishes that the provisions of said instrument will be applied in the absence of tax laws and without prejudice to what is provided by international treaties in which Mexico is a party.

In this sense, Article 6 of the CFF provides that contributions accrue as the legal or factual situations provided for in the current tax laws during the period in which they occur are realized.

Thus, applying what is provided by Article 6 of the CFF, the levy accrues when, in terms of what is provided by Article 24, fraction V of the VAT Law, the services provided by the resident abroad are used in national territory.

From a harmonious interpretation of Articles 24, fraction V of the VAT Law, as well as 1 and 6 of the CFF, in the case of importation of services provided in national territory by residents abroad, the moment of accrual of VAT will be considered to be that in which the services provided by the resident abroad are used in national territory.

Origin

First antecedent

136/2004/VAT

Office 325-SAT-IV-B-92423 of December 17, 2004, through which the First Modification to the compilation of normative criteria, Bulletin 2004, is issued.

Reason for repeal

It is repealed since the content of the criterion is not in accordance with the modification of Article 26, fraction IV of the VAT Law, published on December 9, 2019.

41/VAT/N

In the alienation of articles placed on board aircraft. Application of the Convention on Air Transport between the Government of the United Mexican States and the Government of the United States of America and other equivalents.

Article 1, fraction I of the VAT Law indicates that natural and legal persons who, in national territory, alienate goods are obliged to pay the tax established in said law. In addition, the taxpayer must transfer the tax, expressly and separately, to the persons who acquire the goods.

From the Convention on Air Transport between the Government of the United Mexican States and the Government of the United States of America, which is registered with the Ministry of Foreign Affairs; it is observed that in accordance with Article 7, subsection d) of said Convention, both parties agreed to exempt, on the basis of reciprocity, from customs taxes, duties, inspection fees, and other national taxes or levies, fuel, lubricating oils, other fungible technical materials, spare parts, routine equipment, and provisions placed on board the aircraft of the lines of one party in the territory of the other and used in international services.

Consequently, the expression other national taxes or levies that affects fuel, lubricating oils, other fungible technical materials, spare parts, routine equipment, and provisions placed on board aircraft referred to in the cited subsection, must be understood in a broad context; that is, referring to all taxes and levies instituted in Mexico, considering the purpose and ends for which the Convention was celebrated.

However, the VAT transferred to the airlines that have the right to apply the benefits of the aforementioned Convention, in the alienation of the articles referred to in Article 7, subsection d) of the Convention, provided that they are used in international air services, may be subject to request for refund, in accordance with what is provided by Article 22 of the CFF and the other applicable provisions.

This criterion is also applicable to all those bilateral air conventions that Mexico has in force and that contain a provision identical or analogous to Article 7, subsection d) of the Convention referred to in the previous paragraphs.

Origin

First antecedent

2012

Office 600-04-02-2012-68776 of October 22, 2012, through which the normative criteria approved in the third quarter of 2012 are made known.

Office 600-04-02-2012-69616 of November 29, 2012, through which Bulletin 2012 is made known, with the normative criterion number 138/2012/VAT.

Repeal

Fourth Resolution of Modifications to the FMF 2017

Published in the DOF on October 10, 2017, Annex 7 published in the DOF on October 12, 2017.

Reason for repeal

In view of the fact that it has been incorporated into the Air Transport Agreement between the Government of the United Mexican States and the Government of the United States of America, published in the DOF on August 19, 2016, which will be exempt on the basis of reciprocity from internal consumption taxes.

45/VAT/N

VAT credit in the case of taxpayers who obtain income from activities other than those established in Article 1 of the VAT Law.

Article 5, fraction I of the VAT Law establishes that for the transferred tax or the tax paid on importation to be creditable, it must correspond to goods, services, or the use or temporary enjoyment of goods, strictly indispensable for the carrying out of activities other than importation, for which the tax must be paid or to which the 0% rate applies, considering as strictly indispensable the expenditures that are deductible for ISR purposes, even if one is not obliged to pay the latter tax.

For its part, fraction V, subsections c) and d), numeral 3 of the cited article, establishes that when one is obliged to pay VAT or when the 0% rate is applicable, only for a part of the activities carried out by the taxpayer, the VAT transferred or paid on importation corresponding to expenditures that are used indistinctly to carry out the activities for which VAT must be paid, to carry out activities to which the Law applies the 0% rate, or to carry out the activities for which the tax does not have to be paid, the credit will proceed only in the proportion in which the value of the activities for which VAT must be paid or to which the 0% rate applies, represents in the total value of the aforementioned activities that the taxpayer carries out in the month in question.

The VAT Law does not establish the procedure to determine the creditable VAT when, in addition to the activities mentioned in the previous paragraph, taxpayers obtain income from acts or activities different from those established in Article 1 of the VAT Law, for the realization and obtaining of which they incurred expenses and investments that they destined indistinctly to the same.

In accordance with the jurisprudence thesis 2a./J. 170/2015 (10a.), issued by the Second Chamber of the Supreme Court of Justice of the Nation, in said case, the income obtained from the carrying out of acts or activities different from those established in Article 1 of the VAT Law must be included for the calculation of the proration factor that will be applied to determine the amount of creditable VAT, so that the credit relates exclusively to the value of the taxable activities carried out for which the tax must be paid or which are taxed at the 0% rate, since that is the purpose of the regime provided for in subsection c) of fraction V of Article 5 of the VAT Law.

In accordance with the above, when taxpayers carry out acts or activities for which VAT must be paid or the 0% rate is applicable to them, obtain income from acts or activities different from those established in Article 1 of the VAT Law, and, if applicable, carry out acts or activities for which the aforementioned tax does not have to be paid, for the realization and obtaining of which they incurred expenses and investments that they used indistinctly in said activities, the corresponding creditable tax for said expenses and investments will be determined by applying the proportion provided for in Article 5, fraction V, subsections c) and d), numeral 3, of the VAT Law, considering in the total value of the activities, the income from acts or activities different from those established in Article 1 of the aforementioned Law.

Origin

First antecedent

Fourth Resolution of Modifications to the FMF for 2018

Published in the DOF on November 30, 2018, Annex 7, published in the DOF on the same November 30, 2018.

Repeal

FMF for 2022.

Published in the DOF on December 27, 2021. Annex 7 published in the DOF on January 05, 2022.

Reason for repeal

It is repealed due to the entry into force of the addition of Article 4-A and the reform to Article 5, fraction V, subsections b), c) and d), numerals 2 and 3 of the VAT Law, published in the DOF on November 12, 2021.

46/VAT/N

Withholding of 6% on VAT referred to in fraction IV of Article 1-A of the VAT Law

Article 1-A, fraction IV of the VAT Law states that legal persons or natural persons with business activities that receive services through which personnel is made available to the contractor or a related party of this, who perform their functions in the facilities of the contractor or a related party of this, or even outside these, whether or not under the direction, supervision, coordination or dependence of the contractor, regardless of the name given to the contractual obligation, are obliged to withhold the tax transferred to them, and this specific provision states that the withholding will be made for 6% of the value of the counterpayment effectively paid.

For its part, Article 5 of the CFF mentions that tax provisions that establish burdens on private parties and those that indicate exceptions to them, as well as those that fix infractions and sanctions, are of strict application. On this matter, the Supreme Court of Justice of the Nation has stated that in the case of norms of strict application, it is valid, for interpretation purposes, to resort to various methods, among which the teleological or exegetical method is included.

In this sense, even though in the legislative process that gave rise to the reform of Article 1-A, fraction IV of the VAT Law, mention was initially made of the withholding of the tax regarding labor subcontracting services referred to in the Federal Labor Law, during the review carried out by the Commission of Finance and Public Credit of the Chamber of Deputies, such reference was eliminated and the provision was approved in those terms, so that, for tax purposes, it must be understood that the services subject to withholding are those described in the cited provision, that is, all those in which personnel is made available to the contractor or a related party of this, who, whether or not under his direction, supervision, coordination or dependence, and regardless of the name given to the contractual obligation.

Therefore, when a legal person of Title II or Title III of the ISR Law or a natural person with business activity, in their capacity as contractor, receives services in which personnel is made available to them, it is understood that there will be withholding when the functions of said personnel are used directly by the contractor or by a related party of this. On the contrary, there will be no withholding if the services provided correspond to a service in which the contractor's personnel performs functions that are used directly by the contractor itself.

Origin

First antecedent

First Resolution of Modifications to the FMF for 2020

Published in the DOF on May 12, 2020, Annex 7, published in the DOF on May 14, 2020.

Repeal

FMF for 2022.

Published in the DOF on December 27, 2021. Annex 7 published in the DOF on January 05, 2022.

Reason for repeal

It is repealed in accordance with the reform to the VAT Law published in the DOF on April 23, 2021, through which fraction IV of Article 1-A was repealed, which entered into force on September 1, 2021, there is no longer the obligation to withhold VAT in the provision of subcontracting services, so it is estimated that the present criterion no longer has application.

IV.

Criterion of the IEPS Law

3/IEPS/N

All types of gasoline that are imported pay the IEPS, even that of 100 to 115 octanes, used only for special racing sports vehicles.

Article 2, fraction I, subsection D) of the IEPS Law stipulates that all natural or legal persons who alienate or import, definitively, into national territory, gasolines, will pay the IEPS.

Article 3, fraction IX of the law of the cited tax, establishes that gasoline is understood to be the liquid and colorless lead-free fuel, obtained from the refining process of crude oil when fractionated typically at temperatures between 30° and 225° Celsius (in fractional distillation), formed by a mixture of volatile aliphatic hydrocarbons, mainly branched paraffins, aromatics, naphthenes, and olefins, and that meets specifications to be used in internal combustion engines by ignition with an electric spark; that is, the law does not distinguish regarding the different classes of gasoline that exist.

Origin

First antecedent

32/2003/IEPS

Compilation of Normative Criteria,

Electronic Bulletin October 2003, Volume

III.

Repeal

FMF for 2016

Published in the DOF on December 23, 2015. Annex 7 published in DOF on January 12, 2016.

Reason for repeal

It is repealed due to the reform of Article 2, fraction I, subsection D), of the IEPS Law, published in DOF on November 18, 2015.

V.

Criterion of the LIF

1/LIF/N

Previously paid and challenged tax credits.

The Third Transitory Article of the LIF for the fiscal year 2013 grants the benefit of total or partial forgiveness of tax credits that meet the requirements that the same provision indicates. In its fraction IV, it provides that paid tax credits cannot be forgiven, with which said provision prevents a tax credit that has already been extinguished from being susceptible to forgiveness; for its part, fraction III allows the forgiveness of challenged tax credits, provided that at the date of presentation of the forgiveness request, the defense means concludes with a final resolution, or the receipt of presentation of the withdrawal is attached.

Article 65 of the CFF states that omitted contributions that tax authorities determine as a consequence of the exercise of their audit powers, as well as other tax credits, must be paid or guaranteed, along with their accessories, within thirty days following that in which it has taken effect for its notification.

Likewise, numeral 145 of the CFF states that tax authorities will demand payment of tax credits that have not been covered or guaranteed, within the time limits established by the Law, through the administrative execution procedure.

In this sense, in cases where taxpayers, in order to avoid the generation of updates and surcharges on a tax credit, as well as to suspend the administrative execution procedure, deliver an amount similar or equivalent to the amount of the determined tax credit in order to secure the fiscal interest; the tax debt will not be considered extinguished by definitive payment, when this has not been consented to by the taxpayer by having filed defense means against its determination and, therefore, is not yet final.

For the above, since tax credits are not considered extinguished, in virtue of the fact that they were challenged, and subsequently, taxpayers have withdrawn from said defense means to request the forgiveness of the tax credits referred to in the Third Article,

Transitory provision of the LIF for the fiscal year 2013 and this has been

procedente, it is appropriate that the amount delivered by the taxpayer be

eligible for reimbursement.

Origin

First antecedent

2014

Office 600-04-07-2014-6961 of October 2,

2014 through which the normative criteria

approved in the third quarter of 2014 are made known.

Office 600-04-07-2014-87371 of December 17,

2014 through which Bulletin 2014 is made known, with the number

of normative criterion 1/2014/LIF.

Repeal

RMF for 2022

Published in the DOF on December 27, 2021.

Annex 7 published in the DOF on

January 5, 2022.

Reason for repeal

It is repealed because the current Income Law no longer provides for the

situation mentioned in this criterion, so the content of the criterion is no longer necessary, as it regulated the content of a transitory provision of the LIF of 2013.

VI.

Criterion of the LISH

2/LISH/N

Considerations in favor of contractors in contracts for the

exploration and extraction of hydrocarbons. Moment of accumulation for

the effects of ISR.

Article 29, first paragraph of the LISH provides that the considerations in

favor of the contractor, will be paid once this obtains the contractual

production, so that until such production exists, under no

circumstances will the considerations in favor of the contractor be exigible nor will

any advance be granted to him.

Article 16, first paragraph, first sentence of the Income Tax Law provides that

legal entities resident in the country, including the partnership in participation,

will accumulate the total of income in cash, in goods, in service, in

credit or of any other type, that they obtain in the exercise, including those

from their establishments abroad.

For such purposes, in the case of alienation of goods or provision of

services, Article 17, fraction I of the Income Tax Law considers that income

is obtained, in those cases not provided for in other articles of said law,

when any of the situations established in the referred fraction occurs, whichever occurs first.

Regarding this, neither the Income Tax Law nor the LISH provides for a particular situation that

allows considering that the income derived from the considerations

alluded to are obtained only at the moment when the considerations are effectively

collected.

Therefore, the income derived from the considerations in favor of the

contractor in the contracts for the exploration and extraction of hydrocarbons

provided for in the Hydrocarbons Law, must be accumulated on the dates

established in Article 17, fraction I of the Income Tax Law.

Origin

First antecedent

Fourth Resolution of

Modifications to the RMF for

2015

Published in the DOF on September 29,

2015, Annex 7, published on the same

date of the Modification.

Repeal

RMF for 2017

Published in the DOF on December 23, 2016. The Annex 7 published in DOF on

December 27, 2016.

Reason for repeal

It is repealed because the topic is regulated through Article 16 of the

Income Tax Law, added by Decree published in the DOF on November 30,

Respectfully.

Mexico City, December 15, 2023. - In substitution for the absence of the Head of the Tax Administration Service, based on Article 4, first paragraph of the Internal Regulations of the Tax Administration Service, the General Legal Administrator, Lic. Ricardo Carrasco Varona signs. -

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