On June 13, 2021, the Tax Administration Service (SAT) published on its website the first reference parameters with respect to effective tax rates for the assessment of tax risks corresponding to forty economic activities for fiscal years 2016, 2017, 2018 and 2019 on the list of large taxpayers.

To facilitate and encourage voluntary compliance by taxpayers, the following platform has been created: http://omawww.sat.gob.mx/TasasEfectivasISR/Paginas/index.html, where you can find the document containing the publication of Effective Income Tax (ISR) Rates for Large Taxpayers, as well as frequently asked questions and more information regarding tax risks.

Tax risk is the contingency of noncompliance with the tax provisions applicable to taxpayers, which affects the correct tax payment, specifically with respect to income tax.

How the SAT determined the effective Income Tax rates for Large Taxpayers?

The foregoing was determined based on the information contained in the following documents:

• Annual returns.
• Tax opinions.
• Informative tax returns on the tax situation of the taxpayers.
• Informative returns.
• The digital tax receipts by internet (CFDI’s).
• Customs forms.
• And as a result of analysis processes carried out within the SAT.

These first forty economic activities are part of five economic sectors:

• Mining.
• Manufacturing industries.
• Wholesale trade.
• Retail trade.
• Financial and insurance services; including automotive and pharmaceuticals.

Therefore, in order to facilitate and encourage voluntary compliance, the authorities invite taxpayers to consult the effective tax rate corresponding to the economic activity to which they belong and compare it with their own effective tax rate for each fiscal year in order to measure their tax risks and, if applicable, correct their tax situation by filing the corresponding supplementary annual tax return(s). This will minimize the possibility of initiating in-depth reviews aimed at corroborating the correct compliance with their tax obligations.

Currently, the SAT is conducting the necessary analysis regarding the effective tax rates of other economic activities, to eventually publish them on its website.

How do I determine my effective tax rate in order to compare it with the rate published by the SAT?

Taxpayers must identify in the annual tax return for the corresponding fiscal year the total cumulative income for such year and the amount of income tax incurred in such year.

Subsequently, the amount of income tax incurred in the year will be divided by the total taxable income and the effective tax rate will be obtained.

Effective tax rate = Income tax incurred / Comulative income

In the event that your effective tax rate represents a higher tax risk in one or more fiscal years, you may correct your tax situation by filing supplementary annual tax returns.

The above, through self-determination, considering all tax planning, transactions with related parties, corporate restructurings, interpretations of provisions, implementation of agreements to avoid double taxation, deduction of payments that may represent a reduction in the Mexican tax base, transactions with Simulated Transaction Invoicing Companies (EFOS), among others; so that, if applicable, the effects of such transactions, interpretations or conducts may be reversed.

How should I compare my effective tax rate if I am engaged in more than one economic activity?

In case you carry out more than one economic activity, you must compare your effective tax rate according to the economic activity that corresponds to the majority of your income.

We remain at your service for any doubt or clarification in this regard.