On September 8, the proposal for the economic package for 2022 was presented to the Congress of the Union, which includes the Income Law of the Federation, the expenditure budget, the Income Tax Law, the Value Added Tax Law, the Fiscal Code of the Federation, the Federal Law of Rights, and the General Economic Policy Criteria.

In accordance with the provisions of the explanatory statement, the commitment is established not to create new taxes, and to combat corruption and impunity.

Below is a summary of the most relevant aspects of the 2022 economic package.

General Economic Policy Criteria

The Economic Policy criteria presented by the Federal Executive include, to mention a few, the following macroeconomic figures:

		CGPE-22
Concept	2021	2022
Gross Domestic Product
Growth range % real	6.30%	4.10%
Inflation (%)
Dec./Dec.	5.70%	3.40%
Nominal exchange rate (pesos per dollar)
Average	20.1	20.4
Interest rate (Cetes 28 days, %)
Average	4.30%	5.00%
Oil (Mexican basket)
Average price (dollar/barrel)	60.6	50.1

Revenue Law

The estimated revenue per collection for 2022 are as follows:

Concept	Estimated revenue from collection 2022
Income Tax	2,073,493.50
Value Added Tax	1,213,777.90
Special Tax on Production and Services	505,238.50
Rights	47,193.50
Social Security Contribution	411,852.50
Foreign trade	72,939.50
Other	7,458.80

Income Tax withholding rate by Financial Institutions.

The withholding rate of Income Tax for interest paid by the Banks is reduced to 0.08% since in the year 2021 the current rate is 0.97%.

Surcharge rate

For the year 2021, the surcharge rates for extension in the payment of tax credits will continue to be the same as in 2020, in accordance with the following:

• 0.98% monthly on unpaid balances
• Payments in partialities. Up to 12 months: 1.26% monthly More than 12 and up to 24 months: 1.53% monthly Partialities greater than 24 months, and deferred term payment: 1.82% per month

Income Tax Law

Accreditation of Income Tax paid abroad.

In the case of Income Tax paid abroad, for the purposes of the determination of the annual calculation in terms of article 9 of the Law, the order of priority to prove said Tax will be as follows:

• (a) The number of provisional payments made during the calendar year.
• b) The amount of Income Tax that has been paid abroad, in terms of article 5 of this Law.

Treaties to avoid double taxation.

It is included as a requirement to be able to apply the benefits included in a Treaty to avoid double taxation, that taxpayers have complied with the presentation of the tax opinion of financial statements

Authorization to reduce the utility coefficient.

It is intended to make an amendment to article 14 of the Income Tax Law, to specify that the authorization granted by the SAT in terms of reducing the profit coefficient, refers to the modification of the latter and not to the decrease in provisional payments originated by the modification to said coefficient.

Likewise, it is established that when on the authorization it turns out that the provisional payments would have been covered in an amount lower than that which would have corresponded to them, surcharges will be covered for the difference between the payments made, applying the lower coefficient and those that would have corresponded to them if they had not applied said coefficient, by means of a respective complementary statement.

La Nuda property and usufruct of goods

It is intended to include a reform to article 18 of the Income Tax Law, to establish that the value of the right of usufruct that is determined in the appraisal is considered as cumulative income, now in which the bare property and usufruct of a good is consolidated.  Likewise, there is an obligation to inform the authorities within 30 days of the date on which the operation is carried out.

Corporate restructuring, business reason.

The tax authorities will authorize the disposal of shares at tax cost in cases of the restructuration of companies resident in Mexico belonging to the same group.  Additional requirements within the tax opinion are added to include the following points:

• Book value of the shares subject to authorization.
• Organization chart of the group where the percentage of the participation in the share capital of the partners or shareholders is visualized
• Direct and indirect holding of the companies that make up this group before and after the restructuring.
• The business and turn segments of the issuing company and the acquiring company.
• It is certified that these companies consolidate their financial statements.

If the tax authority, in use of its powers, detects that the restructuring lacks a business reason, the authorization granted will be null and the tax corresponding to the sale of shares must be settled.

Finally, taxpayers who within five years after the restructuring was carried out and a relevant operation is concluded, the company that acquires the shares must submit the informative declaration on relevant operations.

Deduction requirements for Technical Assistance, Technology Transfer or Royalties.

It is intended to modify the exemption established in article 27 section X of the Income Tax Law, relating to payments made for technical assistance, technology transfer or royalties, when these operations are provided by a third party, now such services may be received directly, except for the provision of specialized services.

Deduction for bad accounts

It is proposed that for the purposes of credits greater than 30,000 Investment Units (UDIS) being deductible, the taxpayer has a final resolution issued by the competent authority, with which he demonstrates that he has exhausted all means and that it was impossible to obtain a favorable resolution.

In the event of a review by the authorities, taxpayers must provide the same information provided in the primary database controlled by the credit information companies.

Thin capitalization

In determining the deductible amount of interest derived from debts contracted with related parties residing abroad, in addition to considering for the same the tax attributes such as the Contribution Capital Account (CUCA), and the accounts of net tax profit (UFIN) and Reinvested net tax profit (UFINRE), it is proposed to reduce the sum of the initial and final balances of the tax losses pending decrease that have not been considered in the determination of the tax result and dividing the result of that operation by two.

It is established that this option may not be exercised, when the result of the operation exceeds 20% of the accounting capital of the year in question, unless during the exercise of powers of verification, it is proven that the situations that cause the difference between said amounts have a business reason and it is demonstrated that the integration of the CUCA, CUFIN, CUFINRE and tax losses pending to decrease, have the corresponding support.

Backed credits

It is established that financing operations that derive interest from Mexican taxpayers and permanent establishments in the country will also have the treatment of backed credits, when they do not have a business reason

Original Investment Amount (MOI)

The concept of Original Amount of the investment is extended, in order to include that the preparation of the physical site, installation, assembly, handling, fees to customs agencies, as well as those related to the services contracted for the investment to work, are also considered part of it.

Goods that cease to be useful

When the goods are no longer useful for obtaining income, the taxpayer for the purposes of being able to deduct the part not yet deducted must file a notice with the tax authorities.

Tax losses in the division of companies

Tax losses must be divided between the spin-off and spined-off companies if they are engaged in the same business.  That division shall be calculated in the proportion in which the sum of the total value of inventories and accounts receivable relating to the business activities of the spin-off is divided, or of fixed assets where the spin-off company predominantly carried out other business activities. In order to determine the proportion referred to in this paragraph, investments in immovable property not related to the predominant activity must be excluded.

Amortization of losses, change of partners or shareholders

New assumptions are included to consider that there is a change of partners or shareholders who have control of the company.

Individuals with agricultural, livestock, forestry or fishing activities

This regime is eliminated, establishing that these taxpayers may be taxed in the new Simplified Regime of Trust of individuals.

Personal deductions

Two important changes are made, the first refers that the maximum amount may not exceed 5 times the value of the UMA, instead of the annual minimum wages or 15% of the total income whichever is less, and the second is intended to eliminate the limitation for donations and complementary contributions of the withdrawal, so this type of operations would be included within the general limit for personal deductions

Tax Incorporation Regime (RIF)

This regime is eliminated, derived from the creation of the new Simplified Trust Regime for individuals.

Simplified Trust Regime for natural persons

Article 113-E is added, through which taxpayers who are individuals who carry out only business, professional activities or grant the use or temporary enjoyment of goods, may choose to pay Income Tax in the terms established therein, if all their income from the activity or activities indicated that they carry out, obtained in the immediately preceding year, would not have exceeded the amount of three million five hundred thousand pesos. ($3,500,000 mxn)

This new regime establishes tax rates that will be applied progressively according to the income obtained, according to the following table:

TABLA MENSUAL
Monto de los ingresos amparados por comprobantes fiscales efectivamente cobrados, sin Impuestos al valor agregado (pesos mensuales)	Tasas aplicable
Hasta 25,000.00	1.00%
Hasta 50,000.00	1.10%
Hasta 83,333.33	1.50%
Hasta 208,333.33	2.00%
Hasta 2,500,000.00	2.50%

Among other obligations, it is established that legal entities that carry out operations with taxpayers of this regime must retain as a monthly payment, the amount resulting from applying the rate of 1.25% on the amount of payments made to them, without considering the value added tax.

Income from the acquisition of goods by residents abroad.

It is established that when the tax authorities practice appraisal and there is a difference of more than 10% with respect to the agreed consideration, it will be considered income of the acquirer resident abroad, and the tax will be determined by applying the rate of 25% on the total of the difference, without any deduction, and the alienator must know it if he is resident in the country or resident abroad with permanent establishment in the country; otherwise, the taxpayer will pay the corresponding tax.

Annual informative declaration of operations with related parties

The date of presentation May 15 of each year of the informative declaration of the operations that are carried out with related parties carried out during the immediately previous calendar year is modified.

Similarly, it is eliminated that this declaration only applied to related parties residing abroad, so the information must be presented considering both operations with related parties residing abroad, as well as operations with related parties residing abroad.

Legal representation of residents abroad

In the case of persons who are legal representatives of a resident abroad, it is considered that they voluntarily assume joint and several liability, which will not exceed the contributions that the resident abroad must pay and must have sufficient assets for the purpose of ensuring compliance with the corresponding obligations.

Preferential Tax Regime (REFIPRE)

In the event of determining whether an income is subject to a Preferential Tax regime, as well as in the calculation of the respective tax, the annual adjustment for inflation should not be included, nor the exchange gains or losses derived from the fluctuation of the foreign currency, in relation to Mexican peso.

Maquiladoras

It is proposed to eliminate in order to comply with transfer pricing obligations, the possibility for maquiladoras to request an Advance Transfer Pricing Agreement (APA) in accordance with article 34 of the Fiscal Code of the Federation, so that it would only be an option for maquiladoras not to constitute a permanent establishment, to perform the calculation called “Safe Harbor”

Simplified regime of trust of legal entities.

It is intended to create a new regime applicable to legal entities resident in Mexico, only constituted by natural persons, whose total income in the immediately preceding year does not exceed $35 million pesos, additional these taxpayers will be able to accumulate their income when they are perceived.

Similarly, it is established that legal entities only constituted by natural persons who initiate operations and who estimate that their total income will not exceed the amount may opt for this regime.

Value Added Tax Law

VAT rate 0%

It is specified that the rate of 0% VAT would be applied in the disposal of animal feed, except for the current exceptions related to processed foods for dogs, cats and small species, considered as household pets, which must be taxed at 16%.

It is proposed to tax at 0% VAT the disposal of sanitary pads, tampons and cups for menstrual management.

Import request

It is established as a requirement of accreditation of VAT, that the import request is in the name of the taxpayer and that the payment of the corresponding Value Added Tax is stated in it.

Non-object acts, definition

Article 4-A is included, through which it is established that acts or activities not subject to the tax are understood to be those that the taxpayer does not carry out in national territory, as well as those different from those established in article 1 of this Law carried out in national territory, when in the aforementioned cases the taxpayer obtains income or consideration,  for the purpose of obtaining which it carries out expenses and investments in which the value added tax was transferred to it or the one it would have paid on the occasion of importation.

Consequently, VAT will only be creditable in proportion to the extent that the value of the taxed activities represents the total value of the taxed and non-taxed activities.

Obligations in pre-operational period

Regarding the adjustment of VAT for expenses and investments in pre-operational periods, the obligation for taxpayers to inform the tax authorities in the month they start activities, for the purposes of Value Added Tax, is added, which will be carried out in accordance with the general rules published by the SAT.

Temporary use or enjoyment of tangible goods.

It is specified that it is understood that the temporary use or enjoyment of a tangible good in national territory is granted, when its use or enjoyment is made, regardless of the place where its delivery is made or the celebration of the legal act that gives rise to it.

Digital services provided by residents abroad.

The obligation to submit the quarterly informative declaration for the operations carried out with recipients of digital services is modified, it must be submitted to the SAT on a monthly basis

Fiscal Code of the Federation

Tax residence

It is established that you will not lose the status of residents in Mexico, natural or legal persons who fail to prove their new tax residence (notice of change of tax residence) or accrediting it, the change of residence is to a country or territory where their income is subject to a REFIPRE.

Taxpayers who change their tax residence to a REFIPRE will remain tax residents in Mexico for 5 years. However, this will not be applicable if the country where the taxpayer changes his residence has a broad information exchange agreement with Mexico and additionally an international treaty that allows mutual administrative assistance in the notification, collection and collection of contributions.

Disposal of assets

If the tax authority in the exercise of its powers of verification detects that the operations carried out on merger or division lack a business reason, or there is a breach of the guidelines established in article 14B of the Fiscal Code of the Federation, it will be considered that there was a disposal.

The authority states that the relevant transactions related to mergers and spin-offs, which have been carried out in the immediate 5 years prior and subsequent, shall be taken as a basis for determining whether there was a business reason or not.

It is also made clear that, in cases of merger or division, the financial statements used must be audited by a registered public accountant.

Advanced electronic signature

The authority will deny the granting of an advanced electronic signature, as well as the certificates of digital seals, when it detects that the legal entity that requests it has a partner or shareholder who has the effective control of the applicant and who is located in breaches without correcting his tax situation

Concept of Royalties

It is proposed to consider as royalties within the concept of the use or concession of use of a copyright in a literary, artistic or scientific work the right to the image.

Temporary restriction of Digital Seal Certificates

A new assumption is included, through which the SAT may temporarily suspend the Digital Seal Certificate to companies when any of the partners or shareholders has effective control of the same or another company and any of its certificates have been restricted for not having distorted non-existent operations, tax irregularities, and transmission of tax losses.

Compensation of improper payments or balances in favor

It is proposed that taxpayers who are subject to the exercise of powers of verification have the option of correcting their tax situation through the application of amounts they have in their favor, as long as the amounts they intend to apply have been generated and declared prior to the taxpayer submitting his request. It is important to note that this compensation could be made even between taxes of a different nature.

It is made that this procedure may not be applied to quantities that have been prescribed, have been denied in return or derive from an administrative decision or judgment.

Registration in the Federal Taxpayers Registry

It is expected that individuals over 18 years of age apply for registration with the Federal Taxpayers Registry (RFC), regardless of whether they obtain income.

Changes in Digital Tax Receipts by Internet (CFDI’s)

• Taxpayers who export goods that are not subject to disposal, or that it is free of charge, must issue the CFDI that protects the operation.
• It will be a requirement of the CFDI’s that they include the applicable complements for each type of operation.
• In the issuance of Vouchers that protect expenses, you must have the justification and documentary support that accredits the returns, discounts or bonuses, otherwise it cannot be taken as a deductible in the year.
• It will be mandatory to include in the CFDI, the Federal Taxpayers Registry, name or business name; postal code of the fiscal domicile of the persons in favor of whom it is issued, and the key of usage that will be given to the tax receipt.
• If there is a discrepancy between the description of the goods, merchandise, service or use or enjoyment indicated in the CFDI and the registered economic activity, the authority will update the economic activities and obligations of said taxpayers.
• CFDIs may only be cancelled until before the submission of the annual return for the year in which they are issued, unless the tax provisions provide for a shorter period.
• When CFDI of income is canceled, the taxpayer must have the support that verifies the reasons for its cancellation.

Tax opinion

It is intended to establish the obligation to rule on legal entities that, in the last fiscal year, have declared cumulative income equal to or greater than $876’171,996.50. In the same way, legal entities that place shares among the general investing public are included.

The date of submission of the financial statement opinion is also expected to be 15 May of each financial year.

Movements to the Federal Taxpayers Registry

It is intended that the authority has powers to cancel or suspend the RFC, when it confirms in its systems that the taxpayer has not carried out any activity in the previous five years, that he has not issued Tax Receipts, that he does not have obligations pending to fulfill or that he has died.

Notice from partners or shareholders

The information that must be included in the notice of partners or shareholders is modified, adding to the report of the percentage of participation of each of them, the corporate purpose and who exercises effective control.

Relevant operations

Three assumptions are included for the presentation of this declaration, which are the following:

• Cases of merger and spin-offs
• Disposal of shares at fiscal cost
• Disposal of shares by foreigners.

Tax Certainty

It is intended to grant powers to the SAT to implement the International compliance certainty program, in order to establish tax compliance and dispute prevention programs. The SAT through rules of a general nature will establish the guidelines so that taxpayers can benefit from it.

Informative on the Fiscal Situation (ISSIF)

The parameter of cumulative income declared by taxpayers is eliminated, and the taxpayers are related parties of the subjects obliged to make a financial opinion is included.

Seizure of goods

Powers are granted to the tax authority, to carry out the seizure of assets by tax mailbox, stands or edicts, provided that these assets consist of bank deposits, shares, bonds, expired coupons, real estate and intangibles.

Crime of Tax Fraud

2 cases are added to consider that the crime of tax fraud is commented, the first refers to when a provision of independent professional services is simulated and the second when any tax stimulus or benefit is deducted, accredited or applied, with respect to expenditures that are made in violation of anti-corruption legislation.

Reduction of fines

It is proposed to include as an assumption to grant the reduction of fines, that the taxpayer has not filed a dispute resolution procedure established in an agreement to avoid double taxation to which Mexico is a party.

Fines for Digital Tax Receipts online

A new fine of $ 400.00 to $ 600.00 pesos is added, for each Tax Receipt that is issued and does not have the complements determined by the SAT.  The fine ranging from 55% to 75% of the amount of each CFDI will also be applied, when the authority determines that the Tax receipts cover non-existent or simulated operations.

Crime of smuggling

It is proposed to consider the presumption of smuggling crime, when goods or merchandise are moved by any means of transport in national territory, without the Digital Tax Receipt by Internet of type income or type transfer, including the complement Carta Porte.

Fines for non-cancellation of CFDI’s

It is proposed to add a fine equivalent to 5% to 10% of the amount of each CFDI, to taxpayers who do not cancel the Digital Tax Receipts by Internet of income, when these have been issued by mistake or without cause for it or cancel them outside the deadlines established by the tax provisions.

Registration in the RFC through a Notary Public

By means of transitional provisions, it is intended to cancel the option that taxpayers had to register in the Federal Taxpayers Registry through the figure of Notary Public.

Law on the Special Tax on Production and Services

Automotive fuels

It is proposed to grant the tax authorities the power to apply quotas to fuels, for which the IEPS has not been paid, this without prejudice to the criminal and administrative sanctions that may apply.