On October 2nd 2017, was published in the Federal Official Gazette a Decree in which was granted several tax benefits to taxpayers of the areas affected by the earthquake, said decree entered into effect the day of its publication.
The benefits are applicable to the taxpayers that have their fiscal domicile, branch, agency or any other establishment in the affected areas of the States of Guerrero, Estado de México, Morelos, Puebla and Tlaxcala (the specific municipalities are listed in the Declaration of Natural Disaster of each State, also published in the Federal Official Gazette).
The decree establishes that only the taxpayers that have their fiscal domicile, branch, agency or any other establishment in the affected areas, can benefit from it, when they have submitted the respective notice to the Federal Taxpayer Registry (“RFC”) before September 19th, 2017. Likewise, the Decree establishes that the taxpayers that do not have their fiscal domiciles in the affected areas but have a branch, agency or any other establishment located in them, can benefit from it.
Hereunder we explain the benefits we consider relevant:
Income Tax Provisional Payments: establishes exempt of income tax provisional payments from September to December 2017, as well as the third and quarter trimesters of 2017, and the third quarter of the same year, for the income of the legal entities (under the terms of the Second Title of the Income Tax Law), and individual taxpayers (under the terms of the general regime of business and professional activities or taxpayers that lease goods) as long as the income correspond to their fiscal domicile, branch, agency or any other establishment located in the affected areas.
Taxpayers of the tax Incorporation Regime: Taxpayers that have their fiscal domicile, branch, agency or any other establishment in the affected areas are exempted to present their tax declaration of the fifth and sixth bimester of the 2017 fiscal year, which could be presented on January 2018, at the latest.
Tax Incentive of immediate deduction: Investments in new goods of fixed assets in affected areas will benefit from an immediate deduction, provided that such investments were made from the period of September 19, 2017 to March 31, 2018, applying a 100% rate on the original amount of the investment.
Furniture and office equipment, cars, co-shielding machinery and aircrafts other than those dedicated to agricultural fumigation are non-applicable. Goods will be considered new when they are used for the first time in Mexico.
Withholding of salary payments: Benefit to those taxpayers that make salary income payments and provide subordinated personal services (with the exempt of similar salary income), which consists in defer for three partialities the payment of the income tax withholding corresponding to the months September, October, November and December of 2017, provided that the subordinated personal service is performed within the affected areas.
Definitive Payments of Value-Added Tax (VAT) and Excise Tax on Production and Services (IEPS): It is established at the decree that the taxpayers that have their fiscal domicile, agency, branch or establishment in the affected area can defer in three partialities the payment of VAT and IEPS corresponding to the months September, October, November and December of 2017. Said taxes will be payable in equal and successive partialities.
VAT Refund: The decree establishes that if the Value-added Tax Refund request was submitted before October 16th 2017, by taxpayers that have their fiscal domicile, branch, agency or any other establishment in the affected areas, will be processed within a period of 10 days. The decree also establishes nonapplicable scenarios for this benefit.
Final Considerations
The decree also grants the benefit of exempting the Income Tax payment to the individual taxpayers that receive income from the alienation of lands whose constructions destined as households that were affected by the earthquake, as long as the amount of the operation does not exceed 750 thousand investment units and the operation was formalized before a notary public.
For the abovementioned, it is necessary to have the official document issued by a competent authority that confirms the construction total loss.
The previous benefits are applicable to all the municipalities located in the State of Mexico, the municipalities of Cuernavaca and Jiutepec located in the State of Morelos; the municipalities of Cuautlancingo, Puebla, San Andrés Cholula, San Martín Texmelucan and San Miguel Xoxtla located in the State of Puebla, and in the municipalities of Apizaco, Papalotla de Xicohténcatl, Tlaxcala y Xicohtzinco located in the State of Tlaxcala.
Gardere’s Tax Group will continue to monitor developments concerning this matter in order to inform about any change.
