Guidelines for the Operation of the Federal Participations Compensation Process, pursuant to the last paragraph of Article 9 of the Fiscal Coordination Law

DOF: 23/09/2024

GUIDELINES for the operation of the Federal Participations compensation process, pursuant to the last paragraph of Article 9

A seal bearing the National Emblem, which reads: United Mexican States.- TREASURY.- Ministry of Finance and Public Credit,

GUIDELINES FOR THE OPERATION OF THE FEDERAL PARTICIPATIONS COMPENSATION PROCESS, PURSUANT TO THE LAST PARAGRAPH OF ARTICLE 9 OF THE FISCAL COORDINATION LAW

CONSIDERATIONS

That the Fiscal Coordination Law aims to coordinate the Fiscal System of the Federation with the Federative Entities, as well as with the municipalities and Territorial Demarcations, to establish the participation corresponding to their public treasuries in federal revenues; to distribute said participations among them; to establish rules of administrative collaboration among the various tax authorities; to constitute the organisms in matters of fiscal coordination and to provide the bases for their organization and functioning.

That the Federative Entities adhering to the National Fiscal Coordination System, through the celebration of agreements with the Ministry of Finance and Public Credit (SHCP), participate in the total of the federal taxes and revenues established in the Fiscal Coordination Law, under the terms described in said legislation, through the delivery by the Federation of various participation funds.

That Article 6 of the Fiscal Coordination Law indicates that the Federation will deliver the participations to the municipalities through the States.

That the last paragraph of Article 9 of the Fiscal Coordination Law establishes that compensations may be made to the Federative Entities as a consequence of adjustments in participations or of discounts originating from the non-compliance with targets agreed upon with the Federation in matters of contribution administration. Likewise, said legislation indicates that compensations shall proceed between the federal participations of the Federative Entities and the municipalities and the obligations they have with the Federation, when there is an agreement between the interested parties or in cases where the Fiscal Coordination Law so authorizes.

That the Federal Revenue Laws for the fiscal years 2021, 2022, 2023 and 2024, indicate that in order to promote the cleanup of credits owed for worker-employer contributions, constitutive capitals and their accessories, with the exception of retirement, old-age and disability insurance contributions, by Federative Entities, municipalities and decentralized organisms that are excluded or not included in laws or decrees as subjects of insurance, the Mexican Social Security Institute was authorized to subscribe payment agreements in installments for a maximum term of up to 6 years and for this purpose, the participations that correspond to the Federative Entities and the municipalities may be compensated in accordance with what is established in the last paragraph of Article 9 of the Fiscal Coordination Law.

That pursuant to Article 7 of the Fiscal Coordination Law, the General Participation Fund, as well as the participations referred to in Articles 2-A, fractions I and III, and 3-A of the same legislation, are determined for each fiscal year; however, a monthly calculation is carried out provisionally considering the federal taxable revenue obtained in the immediately preceding month. Under these terms, the Federative Entities within the same month in which the aforementioned calculation is made, receive the amounts corresponding to them, as advances on account of participations, and every four months the Federation carries out an adjustment of these resources, making the calculation based on the revenue obtained in that period.

That the Fundamental Charter incorporates specific provisions regulating the public debt of the Governments of the Federative Entities and municipalities, granting the Congress of the Union the authority to establish in the general bases, so that these levels of government may incur debt; the limits and modalities under which these levels of government may affect their respective participations to cover the loans and payment obligations they contract; the obligation of these levels of government to register and publish all their loans and payment obligations in a Single Public Registry, in a timely and transparent manner; a System of Alerts on debt management; as well as the sanctions applicable to public servants who do not comply with its provisions.

That in accordance with the General Government Accounting Law, the Federation, the Federative Entities, the municipalities and, where applicable, the territorial demarcations of Mexico City must include in their revenue laws, the obligations of guarantee or payment giving rise to public debt or other liabilities of any nature with counterparties, suppliers, contractors and creditors, including the disposition of assets or expectation of rights over them, contracted directly or through any legal instrument considered or not within the organizational structure of the corresponding public administration, and the celebration of legal acts analogous to the aforementioned and without prejudice to the fact that such obligations have as their purpose the swap or refinancing of others or that they are considered or not as public debt in the applicable legislation. Likewise, the composition of such obligations and the destination of the resources obtained.

That in order to be able to determine the maximum amount of federal participations that can be used in a compensation process with the objective of extinguishing fiscal obligations that may have arisen as a result of the celebration of agreements between the Federation and the Federative Entities and municipalities, various items must be considered, among them, the resources that are incorporated into the Expenditure Budgets of the Federative Entities and Municipalities, in order to comply with what is established by Article 127 of the Fundamental Charter in matters of remuneration.

That, according to what was stated by the Superior Audit Office of the Federation, in the Result Report of the Superior Audit of the Public Account 2023, in 2022 federalized spending represented the main source of income for local governments, being of utmost relevance for the Federative Entities, the municipalities and the boroughs of Mexico City, due to the significant dependence of these levels of government on federal resources. According to the same report, in Mexico City it constituted 49.2% of its total income in 2022, while in 8 Federative Entities it represented 90% of their public resources and 83% of the total income in the rest of the Federative Entities.

That, on the other hand, according to the Result Report of the Superior Audit of the Public Account 2023, issued by the Superior Audit Office of the Federation, in 2022 federalized spending represented more than 90% of the income of the municipalities with the greatest backlog and 71.5% in the rest of the municipalities. Among the resources that constitute federalized spending, Federal Participations stand out, as they constitute resources of free disposal or financial administration that local governments use for the purposes and objectives defined in the budgets established in local governments.

That, according to the revenue databases of the National Institute of Statistics and Geography, contained in the statistics of State and Municipal Public Finances corresponding to 2022, municipalities depend greatly on the transfers they receive from the federal government, since, on average, municipalities only collect 9.3% of their total income while 89% of the total income of municipalities comes from the Federation.

That, according to the expenditure databases of the National Institute of Statistics and Geography, contained in the statistics of State and Municipal Public Finances corresponding to 2022, the total income of municipalities is barely sufficient to sustain their operation, since, on average, municipalities allocate 56.1% of their total income to the payment of personal services; materials and supplies; and general services, constituting their current expenditure on average 62.3% of their total income, this without considering in this amount the resources destined to Public Investment and public debt.

That, taking into account the information from the National Institute of Statistics and Geography described above, the current expenditure for the operation of municipalities, plus the expenditure destined to public investment (31.1%) and the expenditure committed in public debt (0.9%), represents 88.1% of their total resources, leaving only 11.9% to cover other expenditure items.

That the Fundamental Charter in its Article 25, states that it corresponds to the State the leadership of national development to guarantee that it is integral and sustainable, that it strengthens the Sovereignty of the Nation and its democratic regime and that, through competitiveness, the promotion of economic growth and employment and a fairer distribution of income and wealth, it allows the full exercise of the freedom and dignity of individuals, groups and social classes, whose security this Constitution protects.

That the Constitution in its Article 1 establishes that in the United Mexican States all persons will enjoy the human rights recognized in the Fundamental Charter, and in the international treaties of which the Mexican State is a part, as well as the guarantees for their protection; likewise, it mandates that all authorities, within the scope of their competencies, have the obligation to promote, respect, protect and guarantee the human rights of everyone in accordance with the principles of universality, interdependence, indivisibility and progressivity.

That, under the terms described, the Ministry of Finance and Public Credit, within the scope of its competence, must promote, respect, protect and guarantee the human rights of everyone in accordance with the principles of universality, interdependence, indivisibility and progressivity and, in exercise of its powers, omit actions that put at risk the provision of public services by the governments of the Federative Entities and municipalities, since this could directly affect the human rights of their inhabitants and the economic development of the Federative Entity or municipality.

That, pursuant to what is established by Article 6 of the General Law of Administrative Responsibilities, all public entities are obliged to create and maintain structural and normative conditions that allow the adequate functioning of the State as a whole, that is, of the Federation, Federative Entities and municipalities.

That, for the aforementioned reasons, it is considered necessary to have Guidelines that allow the Ministry of Finance and Public Credit, through the administrative unit legally empowered and competent for this purpose (Unit for Coordination with Federative Entities), to provide legal certainty to the processing of the compensations referred to in the last paragraph of Article 9 of the Fiscal Coordination Law, establishing the requirements that must be met in the presentation of the corresponding requests, in such a way as to allow safeguarding the constitutional guarantees that protect the public treasuries of the Federative Entities and municipalities, as well as to indicate the maximum amounts to be compensated for each creditor in the case of obligations acquired by local governments that generate fiscal credits in favor of the Federation. The foregoing with the fundamental purpose of not affecting the operation of the programs or work plans of the Federative Entities and municipalities, and therefore their capacity to continue providing basic public services to the population, in attention to the fact that they are resources of free disposal or financial administration that local governments use for the purposes and objectives defined in the budgets established in local governments.

That these Guidelines aim to regulate the procedure through which the Unit for Coordination with Federative Entities carries out the processing of the compensation of Federal Participations in accordance with what is established by the last paragraph of Article 9 of the Fiscal Coordination Law.

That in accordance with what is established in Article 9 of the Fiscal Coordination Law, 31 fractions XI and XXXII of the Organic Law of the Federal Public Administration and 6 fraction XXXIII of the Internal Regulation of the Ministry of Finance and Public Credit, the Head of the Ministry of Finance and Public Credit has the authority to approve the technical and administrative policies for the better organization and functioning of the Ministry of Finance and Public Credit, therefore I have deemed it appropriate to authorize the following:

GUIDELINES FOR THE OPERATION OF THE PROCESS OF COMPENSATION OF THE

FEDERAL PARTICIPATIONS, PURSUANT TO THE LAST PARAGRAPH OF ARTICLE 9 OF THE LAW OF FISCAL COORDINATION

CHAPTER I
GENERAL PROVISIONS

Article 1. These Guidelines aim to establish the bases for the operation of the Federal Participations compensation process, to indicate the requirements that public entities must meet for the application and processing of Federal Participations Compensation requests, ordered by sentences or resolutions of jurisdictional or judicial authorities, as well as those that arise from the following circumstances contemplated in Article 9, last paragraph, of the Fiscal Coordination Law:

I. Discounts originating from the non-compliance with targets agreed upon with the Federation in matters of contribution administration;

II. Those that proceed between the federal participations of the Federative Entities and municipalities, and the obligations they have with the Federation, when there is an agreement between the interested parties, and

III. Those authorized by the Fiscal Coordination Law.

The interpretation of these Guidelines, as well as the analysis and authorization of situations not foreseen in them, will correspond to the Ministry of Finance and Public Credit through the Unit for Coordination with Federative Entities.

Article 2. For the purposes of these Guidelines, the following shall be understood:

I. Creditor: The Federation;

II. Compensation: The discount made against federal participations as a consequence of discounts originating from the non-compliance with targets agreed upon with the Federation in matters of contribution administration, as well as for non-compliance with the payment of federal fiscal credits, when there is an agreement or understanding between the interested parties or when the Fiscal Coordination Law so authorizes.

III. Debtor: The Federative Entities, their Executive, Legislative and Judicial branches, the dependencies and entities of the Federative Entities, autonomous constitutional bodies of the Federative Entities or municipalities, jurisdictional bodies that are not part of the Judicial Branch of the Federative Entities, dependencies or entities of the Public Administration of the Federative Entities or municipalities, city councils, local prosecutor's offices or procuratorates, the municipalities, their city councils, their dependencies and municipal and paramunicipal entities, as well as any public entity of the Federative Entities and the municipalities, that in terms of the last paragraph of Article 9 of the Fiscal Coordination Law, have agreed to compensate the obligations contracted with the federation, and in accordance with the agreements, understandings or modifications to these that have been celebrated, the compensation is appropriate.

IV. Federative Entity or Federative Entities: the States and Mexico City;

V. Public Entities: Any entity over which it has control over its decisions or actions, the Legislative and Judicial Branches, the autonomous constitutional bodies, the jurisdictional bodies that are not part of the Judicial Branch, the dependencies, entities of the Federal Public Administration, and their counterparts in the Federative Entities, the municipalities and boroughs of Mexico City and their dependencies and entities, the local prosecutor's offices or procuratorates, state-owned productive companies and their subsidiaries;

VI. Federation: The Presidency of the Republic, the dependencies and entities of the Federal Public Administration, the Attorney General's Office of the Republic, the state-owned productive companies and their subsidiaries, the Legislative and Judicial Branches of the Federation, the autonomous constitutional bodies established in the Political Constitution of the United Mexican States, the federal jurisdictional bodies that are not part of the Judicial Branch of the Federation, as well as any other public entity of a federal nature;

VII. Federal Participations: those corresponding to the Federative Entities and Municipalities in the terms of Chapter I of the Fiscal Coordination Law;

VIII. Resolution: Administrative act through which federal tax authorities or coordinated in federal tax matters, in terms of the applicable provisions, determine and notify the taxpayer of the omitted contributions or revenues, as well as the corresponding accessories;

IX. Final Resolution: That which: i) Does not admit against it a remedy or lawsuit; ii) Admitting a remedy or lawsuit, it was not appealed, or when, having been appealed, the remedy or lawsuit in question was dismissed or stayed or proved unfounded, and c) Is expressly consented to by the parties or their legitimate representatives;

X. "Ministry", the Ministry of Finance and Public Credit;

XI. "Treasury", the Treasury of the Federation, and

XII. "Unit", the Unit for Coordination with Federative Entities.

Article 3. The amount of the debt referred to in the Federal Participations Compensation requests will invariably be in national currency and must contain, where applicable, the updates, surcharges, revenues, default interest and accessories that apply, in accordance with the legal provisions applicable to each specific case.

CHAPTER II
AGREEMENTS AND UNDERSTANDINGS WHOSE COMPLIANCE GENERATES OBLIGATIONS IN FEDERAL TAX MATTER, FOR THE FEDERATIVE ENTITIES, MUNICIPALITIES, OR THEIR PUBLIC ENTITIES

Article 4. To carry out the Compensations for the concept of Federal Participations that correspond to the Federative Entities, and municipalities, when these levels of government, their centralized or para-state public administrations, or other public entities, agree on obligations through Agreements or Understandings with federal public entities that generate the right to collect contributions, revenues, fines or revenues in favor of federal tax authorities or coordinated in federal tax matters, in terms of federal tax provisions, compliance with what is established in this Chapter must be given.

Article 5. The legal act through which the obligation and the appropriateness of the compensation are agreed upon between the parties, must be signed by a competent authority and subject to the applicable legal provisions.

Article 6. Federal Participations Compensation requests must have the following requirements:

I. The administrative act through which the request is materialized, must be substantiated and motivated, and signed by a legally competent authority;

II. The different elements related to the tax obligation:

a) Total amount to be compensated, breaking down, the concepts that make up the tax credit and the accessories, including, default interest, updates, as applicable, in terms of the applicable provisions, as well as the number or numbers of tax credits under which the respective debts are controlled by the executive authorities;

b) Period of accrual to which the owed tax credits correspond, in terms of the applicable provisions and what is established in the corresponding Agreements or Understandings;

c) Full name of the Federative Entity, municipality, organism or state or municipal public entity whose debt derives from the Federal Participations Compensation request. In case the denomination of the public entity has changed with respect to that established in the Agreement supporting the compensation request, it must be accredited that it is the same entity, and

d) In the case of requests related to debts of public entities other than the centralized state or municipal public administration, it must also include the local basis accrediting its creation, and legal nature.

III. The provisions and clauses established in the Agreement, Understanding or, where applicable, its modifications, through which the appropriateness of the Federal Participations Compensation is based:

a) The full name of the Agreement or Understanding and, where applicable, its modifications, as it appears in the signed documents and the clause or clauses in which the Federal Participations Compensation was stipulated in terms of the Fiscal Coordination Law;

b) Date of signature and period of validity of the Agreement or Understanding, and of the Modification Agreement or Understanding in case it has been celebrated and, where applicable, the date of publication of the Agreement or Understanding in the Official Gazette of the Federation or in the official local media of dissemination (official newspaper, government gazette, etc.), as well as of their respective modifications;

c) Declaration that the formalization of both the Agreement in question, as well as the compensation request, were carried out in terms of the applicable provisions;

d) Where applicable, the clause of the Agreement, Understanding or its modifications, which contemplates the Federative Entity as a solidary obligor, and

e) Sections of the annex or annexes that are an integral part of the Agreement, Understanding or modification thereof and that influence the determination of the appropriateness of the request.

IV. Attach and describe the supporting documentation that complements the compensation request consisting of:

a) Clear, legible and exact simple copy of the Understanding or Agreement and, where applicable, the corresponding modifications supporting the request, in case they had not been sent in advance;

b) Clear, legible and exact simple copy of the notification of the resolution determining the non-compliance with the agreed obligation, both to the Creditor and to the Federative Entity in those cases where it acts as a solidary debtor, in which case the corresponding resolution must accompany it.

In the application, it must be stated that notifications were carried out in accordance with the applicable provisions;

c) Simple copy of the Resolution by which the Creditor has determined the tax credit, in which the amount, concepts, and period of accrual are specified, among others;

d) Declaration of finality by the judicial or jurisdictional authority regarding the resolution determining the credit in case it had been appealed, or communication from the competent area attached to the federal tax authority or coordinated in federal tax matters, informing of the non-appeal and finality thereof;

e) When, according to applicable provisions, an opinion from the Secretariat is required for the signing of the Agreement generating the obligation, a copy of the corresponding opinion must be sent, and

f) In those cases where, in accordance with what is established in the Agreement, Agreement, or modification thereof, or in the applicable provisions, the authorization of the Congress of the Federative Entity or, where applicable, the corresponding city council is necessary, a simple copy of the same must be attached to the compensation application.

g) And, the other requirements that, in accordance with legal provisions, are applicable.

Article 7. Applications derived from the application of compensation made by the Creditor shall be processed as follows:

I. The Creditor, in terms of applicable provisions, shall carry out the notification of the resolution through which the tax credit is made known to the debtor. In the case of debts owed by state or municipal public entities and municipalities, a copy of the notification shall be sent to the Federative Entity;

II. When the Resolution determining a tax credit is notified and is considered enforceable and final, if the determined tax credit is not paid or guaranteed in terms of applicable tax provisions, at least 30 calendar days having elapsed from when the notification takes effect for the debtor and, where applicable, for the Federative Entity, the Creditor may request the Unit, via official letter, the Compensation of Federal Participations, sending a copy to the Federative Entity, municipality, or public entity in question.

In those cases where contributions have been self-assessed through a declaration, the Creditor must attach a simple copy of the same to the Compensation Application.

Within the first 7 calendar days of each month, the Unit will receive from Creditors the list of obligations for each public entity, susceptible to being compensated against Federal Participations. The Unit will communicate, no later than two business days after said deadline, the Maximum Compensation Amounts, which shall be calculated in accordance with Article 14 of these Guidelines;

III. The application for Compensation of Federal Participations must be delivered to the Unit no later than the 15th day of each month;

IV. If the application is received after the 15th day of each month, the Unit will process the compensation application in the following month;

V. If any of the requirements established in these Guidelines are missing, the Unit will deem the compensation application inadmissible and rejected, informing the Creditor within the same month in which it was received, allowing it to be resubmitted subsequently. The compensation application resubmitted in accordance with this section will be considered as a new application, subject to the deadlines and requirements established in these Guidelines;

VI. If the debtor pays the credit owed by them before the 20th day of the month in which the Compensation of Federal Participations takes place, the Creditor must inform the Unit, with the aim of suspending the compensation; if they fail to do so, they must immediately refund the compensated resources to the debtor;

VII. The Unit will suspend the settlement of Compensation of Participations, based on the request of the Creditor themselves, provided that it is received via official letter at the Unit no later than the 20th or next business day of the month in which the Compensation will take place;

VIII. The Unit will also suspend the settlement of compensation when it receives from the Creditor, the Federal Tax Prosecutor's Office, or a competent judicial or jurisdictional authority, an agreement, communication, sentence, or resolution, through which it is informed of the granting of a suspension, resulting from the filing of any defense mechanism;

IX. The Unit, in case there is no official communication from the Creditor to suspend the Compensation, will carry out the corresponding settlement, through the issuance of the respective certified settlement account, which will be sent to the Treasury so that it reflects such compensation in the record of Federal Participations for the corresponding month, which is delivered to the Federative Entity no later than the 25th day of each month or the next business day, in accordance with what is established in the Administrative Collaboration Agreement in Federal Tax Matters.

Article 8. In the event that, to comply with the Agreement, Agreement, or modifications thereto, through which the feasibility of the Compensation referred to in the last paragraph of Article 9 of the Fiscal Coordination Law was agreed, an Agreement for the recognition of debt had been concluded with the debtor, and their application for Compensation of Federal Participations is due to the breach of the latter, the processing of the Compensation application shall follow the following:

I. At least 30 days having elapsed from when the notification of the breach of the Debt Recognition Agreement and the payment request takes effect for the Debtor and, where applicable, for the Joint Debtor, and once the resolution through which the tax credit is determined and the breach of the Debt Recognition Agreement is made known is considered enforceable and final, the Creditor may request the Unit, via official letter, the Compensation of Federal Participations, sending a copy to the Federative Entity, municipality, or body in question;

II. The administrative act materializing the application must comply with the requirements established in sections I, II, III, and IV of Article 6 of these Guidelines and be accompanied by the following documentation:

a) Simple, clear, legible, and exact copy of the originally celebrated Agreement or Agreement, as well as its Modifications, if they had not been sent in advance;

b) Simple, clear, legible, and exact copy of the Debt Recognition Agreement, stating in the application that its celebration was carried out in compliance with applicable provisions, if they had not been sent in advance;

c) Payment schedule agreed upon that includes all owed concepts, breaking down principal and accessory amounts, as well as the period of accrual and any remaining periods;

d) Simple copy of the notification to the debtor and, where applicable, to the Federative Entity, of the resolution through which the breach of the Debt Recognition Agreement is informed and the payment of the tax credit is demanded, stating in the application that such notification was carried out in terms of applicable provisions;

e) Simple copy of the declaration of finality of the resolution through which the breach of the Debt Recognition Agreement is made known and the payment of the tax credit is demanded, by the judicial or jurisdictional authority in case it had been appealed, or the official letter from the competent authority attached to the tax authority, stating the finality of the resolution through which the breach of the Debt Recognition Agreement and the determination of the tax credit are made known, and the non-appeal thereof.

Article 9. The Creditor may only request the Compensation of Federal Participations for the debt of federal tax credits when these are enforceable, not prescribed, and whose resolutions through which they were determined or the self-assessment instrument are final, that is: i) they do not admit appeal or lawsuit against them; ii) admitting appeal or lawsuit, they were not appealed, or when, having been appealed, the appeal or lawsuit in question was dismissed or stayed or proved unfounded, and iii) they are expressly consented to by the parties or their legitimate representatives.

The Creditor's powers to determine omitted contributions or benefits and their accessories, as well as to impose sanctions for violations of tax provisions, must not have expired in terms of applicable provisions, a situation that must be expressly stated in the Compensation Application.

CHAPTER III

COMPENSATIONS DERIVED FROM THE RESOLUTION
OF AN APPEAL

Article 10. In those cases where the resolution of the appeal referred to in Article 11-A of the Fiscal Coordination Law orders the return of amounts improperly collected, charged against the Federal Participations of the Federative Entity, the Compensation procedure shall be subject to the following:

I. The application for Compensation of Federal Participations must be delivered to the Unit no later than within the first 6 calendar days of each month;

II. If the application is received after the deadline indicated in the previous section, the Unit will process the Compensation application in the following month;

III. The application must be accompanied by the following documentation and information:

a) Official letter with the updated amounts to be returned, accompanied by a simple, clear, and legible copy of the resolution of the competent authority through which it is determined that a Federative Entity or municipality failed to comply with the provisions of the National Fiscal Coordination System and those on rights coordination.

b) Document through which the finality of the resolution is verified, considering the following scenarios: i) it does not admit appeal or lawsuit against it; ii) admitting appeal or lawsuit, it was not appealed, or when, having been appealed, the appeal or lawsuit in question was dismissed or stayed or proved unfounded, and iii) it is expressly consented to by the parties or their legitimate representatives; and in case the resolution had been appealed, the sentence and declaration of finality by the competent jurisdictional or judicial authority through which such finality is informed;

c) Format for the application for registration, cancellation, or modification of bank accounts, duly completed with the information of the individual or legal entity to whom the corresponding deposit is to be made, which will be provided by the Unit at the request of the authority issuing the resolution;

d) Copy of the bank statement of the individual or legal entity to whom the resource is to be deposited;

e) In the case of an individual, a copy of the Unique Population Registry Key (CURP) of the appellant;

f) Phone number of the appellant, and

g) Proof of address of the appellant, which must match that indicated in the provided bank statement.

CHAPTER IV

FEDERAL COMPENSATIONS TO BE MADE BY JUDICIAL OR JURISDICTIONAL MANDATE

Article 11. When there is a final judicial or jurisdictional resolution or final sentence from a competent judicial or jurisdictional authority, through which the Secretariat is instructed to carry out the Compensation of Federal Participations procedure, in order to comply with the judicial or jurisdictional resolution or sentence, the Unit, within its scope of competence, will carry out the actions necessary to carry out the Compensation Procedure.

CHAPTER V

COMPENSATIONS OF FEDERAL PARTICIPATIONS DERIVED FROM OBLIGATIONS AGREED WITH FEDERATIVE ENTITIES AND MUNICIPALITIES

Article 12. Applications for the processing of Compensation of Federal Participations that seek to extinguish obligations other than those of a tax nature, agreed between the Federation and the Federative Entities, municipalities, or their centralized and decentralized public administrations, as well as state and municipal public entities, which are generated through Agreements, must contain the following:

I. Be founded and motivated by a competent authority;

II. Include the different elements related to the debt and that influence its determination, consisting of:

a) The total amount intended to be compensated, broken down, where applicable, into principal and each of its accessories;

b) Full name of the Federative Entity, municipality, body, or state or municipal public entity;

c) Legal basis supporting the celebration of the Agreement or Convention by the Federative Entity, municipality, body, or state or municipal public entity, and

d) In the case of Conventions or Agreements, and where applicable, their respective modifications, which contemplate deferred or installment payments of the agreed debts, the compensation request official letter must indicate the validity of such instruments and the payment intended to be collected, as well as the remaining payments.

III. The provisions and clauses established in the Convention or Agreement, and where applicable, in their respective modifications, through which the feasibility of Compensation of Federal Participations is based:

a) The full name of the Convention, Agreement, and where applicable, modification thereof, as it appears in the signed document and the clause or clauses in which it is stipulated that Federal Participations may be subject to compensation;

b) Date of signature and period of validity of the Convention or Agreement and where applicable, its modifications and, where applicable, the date of publication of the Convention or Agreement in the Official Gazette of the Federation or in local official dissemination media (official newspaper, government gazette, etc.), as well as their respective modifications;

c) Statement that, for the formalization of the Convention, Agreement, or modifications, compliance with applicable provisions was given;

d) Definition of the concepts agreed upon in the Convention or Agreement or its Modifications, and

e) Where applicable, the annexes that are an integral part of the Convention or Agreement or its modifications that influence the determination of the feasibility of the compensation application, considering in these the payment schedules.

IV. Attach and describe the supporting documentation that complements the compensation application consisting of:

a) Clear, legible, and exact copy of the Convention or Agreement and where applicable, its modifications, supporting the application, if they had not been sent in advance;

b) In case it had been agreed so in the Convention or Agreement or its modifications, notification of the debt carried out in terms of applicable provisions to the debtor, and, where applicable, to the Federative Entity, and

c) In those cases where the Convention or Agreement, its modifications, or the applicable provisions establish that the authorization of the Congress of the Federative Entity or the corresponding City Council must be obtained, a simple, clear, and legible copy of the same must be attached to the application.

CHAPTER VI

COMPENSATION OF FEDERAL PARTICIPATIONS ORIGINATED BY THE FAILURE TO MEET TARGETS AGREED IN TAX ADMINISTRATION MATTERS

Article 13. The Unit will carry out the Compensations required, as a consequence of discounts originating from the failure to meet targets agreed with the Federation in tax administration matters.

For this purpose, the Compensation application must include:

I. The Federative Entity to which the discount derived from the described failure is to be made;

II. The clause of the Administrative Collaboration Agreement in Federal Tax Matters, and where applicable, the corresponding Annex, supporting the compensation application;

III. The amount requested to be compensated, and

IV. The instrument through which the failure to meet the targets agreed with the Federation in tax matters by the Federative Entity was determined.

CHAPTER VII

ON THE CALCULATION OF THE MAXIMUM AMOUNT OF FEDERAL PARTICIPATIONS TO BE COMPENSATED

Article 14. The Unit will determine the amount of compensations derived from Conventions, Agreements, and, where applicable, their modifications, which generate obligations in tax matters for Federative Entities, their municipalities, and public entities, charged against participations, ensuring that Federative Entities and municipalities have sufficient solvency to comply with the provisions and obligations provided in the Political Constitution of the United Mexican States and in other applicable provisions.

In order to safeguard the operation of local governments and thereby the human rights of the inhabitants of Federative Entities and municipalities, as well as the public finances of such levels of government, the Unit will carry out an analysis of the particular financial situation of each Federative Entity, to calculate the maximum amount of Federal Participations to be compensated.

For the purposes of the above, it may take into account, among others, the following elements listed in an illustrative rather than exhaustive manner: the amount of the General Participation Fund; adjustment applicable to the General Participation Fund; amount or percentage of participations committed in the public debt of the Federative Entity; average amount of compensations carried out in previous periods, amount of obligations contracted by public entities of each Federative Entity; the amount committed by the Federative Entity, to comply with what is stated in Article 127 of the Constitution, among other legal instruments.

In no case shall the maximum amount to be compensated for all creditors at the Federative Entity level contemplated in this Chapter exceed 15% of the Federal Participations estimated for the corresponding month.

On the other hand, the amount to be compensated for all creditors falling under the scenario established in the first paragraph of this article at the municipal level, will be 15% of the Federal Participations estimated for the corresponding period or the amount that covers the complete periods of the debt, without exceeding in any case 18% of the Federal Participations estimated for the corresponding period.

Article 15. Once the maximum amount to be compensated is determined in terms of this Chapter, the Unit will inform each Creditor via institutional email, the recipient must send delivery confirmation, so that they are included in the compensation applications submitted in terms of Article 7 of these Guidelines.

Article 16. The procedure to carry out the extinction of obligations agreed between the Federation and the Federative Entities or municipalities through Compensation, will be charged against the Federal Participations of the Federative Entity in question, even in those cases where the obligation to be compensated had been agreed with one of the municipalities that constitute it or a municipal public entity.

This is without prejudice to the Federative Entity, in terms of applicable local provisions or Conventions celebrated with the respective municipality or municipal public entity, making effective the payment of such participations.

Article 17. The Unit will carry out the settlement of Compensation applications through the issuance of certified settlement accounts, which the Treasury will receive for the corresponding legal effects.

It will also send via institutional email to the Federative Entity, the recipient must send delivery confirmation, a copy of the Creditor's Compensation application or, in its absence, a communication informing the amount of the Compensation, corresponding to its dependencies, its municipalities or boroughs of Mexico City, as well as its respective autonomous bodies and parastatal and paramunicipal entities.

Article 18. Regarding the compensation of Incentives that may be agreed by the Federation with Federative Entities and municipalities in terms of the last paragraph of Article 9 of the Fiscal Coordination Law, it will be subject to what was agreed for the management of these resources by Federative Entities, in the Administrative Collaboration Agreements in Federal Tax Matters.

TRANSITIONAL PROVISIONS

First. These Guidelines will enter into force the day following their publication in the Official Gazette of the Federation.

Second. Compensation procedures for participations that are ongoing will be carried out in terms of the operating rules for the process of applications for the allocation and compensation of federal participations, which, once concluded, will become void.

Third. For the application of these Guidelines, the provisions of the current federal legal provisions will be followed, including the regulations, guidelines, policies, and criteria issued for such effect by the Secretariat.

Fourth. These Guidelines are of complementary application with respect to other guidelines or regulations issued in the matter.

Fifth. Subsection b) of section II of numeral four of the General Guidelines for the Compensation of Federal Participations Process for final tax debts of public entities related to the total or partial omission of the income tax withholding or salary withholdings or assimilations, published in the Official Gazette of the Federation on September 1, 2022, is hereby rendered void, with the provisions of Article 14 of these Guidelines being applicable for the calculation of the maximum amount of estimated participations for the purposes of said guidelines.

Sixth. The 12-day deadline referred to in section II of numeral four of the General Guidelines for the Compensation of Federal Participations Process for final tax debts of public entities related to the total or partial omission of the income tax withholding or salary withholdings or assimilations, published in the Official Gazette of the Federation on September 1, 2022, is hereby rendered void, with the 15-day deadline referred to in Article 7, section III of these Guidelines being applicable for the submission of the Compensation application.

Mexico City, September 11, 2024. - The Secretary of Finance and Public Credit, Rogelio Eduardo Ramírez de la O. - Signature.

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