18 June 2020

Special measures of the Mexican government with respect to COVID-19

Although different industry chambers and organizations have been requesting different incentives from the Mexican Ministry of Finance and Public Credit and from the Mexican Tax Administration Service (jointly referred to as the "Tax Authority") in light of the challenges posted by the COVID-19 pandemic, the only measures taken by the Tax Authority may be summarized as follows:  

  1. Activate the granting of credit lines for the productive sector;
  2. Collaborate with the National Banking and Securities Commission ("CNBV" per its Spanish acronym) on different accounting criteria for maintaining credit lines; and 
  3. Promptly settle debts with government suppliers. 

In light of the lack of additional tax incentives from the Tax Authority, the Taxpayers Ombudsman is formally recommending and requesting the implementation of the following measures from the Tax Authority in light of the health emergency and in support of the economy of the taxpayers: 

  1. Implement a mechanisms to return tax favorable balances to taxpayers within 3 days; 
  2. Issue a general rule extending the deadline for the filing of the annual tax return, both for legal entities and individuals, until July 31st, 2020; 
  3. To allow legal entities to pay their annual tax liability in up to six installments, without requiring the filing for an authorization and without the obligation to pay penalty interest or surcharges, extending this benefit already granted to individuals under rule 2.14.5 of the Miscellaneous Tax Resolution for 2020. 
  4. Extend the term to apply for an automatic refund of favorable balances, instead of following the prescribed deadline of July of 2020 (extending the term prescribed in Rule 2.3.2 of the Miscellaneous Tax Resolution). 
  5. Defer until July 31st, 2020 the presentation of the provisional or estimated monthly payments for the months of March, April and May 2020. 
  6. Interrupt or suspend the deadline for the filing of an administrative nullity appeal through electronic means whenever the taxpayer has an expired electronic signature and it is unable to booking of an official appointment for its renewal due to the saturation of the appointment system of the Tax Authority.  

It should be noted that the Tax Authority has not declared any suspension of activities in any of its different Administrations, which is a position that may ultimately represent challenges for taxpayers, as on one side the Health Authorities of Mexico and some local States already declared that some businesses shall seize activities and asked individuals to respect a safe distance protocol to mitigate exponential COVID-19 transmission, while on the other side if a tax inspection is carried out, the individuals working for the taxpayers subject to an inspection or official visit would be forced to attend their work space along with other individuals, and without considering their health condition. Therefore, taxpayers are urged to pay careful attention to their electronic taxpayer mailbox, and to have a defined protocol for the internal communication of any visit from any governmental authority, specially from any Tax Authority.  

In addition to the above, please note that if and when the Health Authorities declare a general health contingency, forcing most of businesses to suspend activities, employees may be entitled to receive as compensation as an indemnity, in which case it is advisable to evaluate in anticipation the possible tax, social security contribution and labor implications of such payments.  

In Baker & McKenzie, we expect the Tax Authority to take the necessary steps to address this crisis and are awaiting the publication of the following actions and measures to be taken by the Tax Authority. Please note that we will keep an eye on any updates and will let you know as soon as possible. 

Copyright © The Impact Lawyers. All rights reserved. This information or any part of it may not be copied or disseminated in any way or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of The Impact Lawyers. The opinions expressed in this article are those of the authors and do not necessarily reflect the positions or policies of The Impact Lawyers.

Would you like to read more?

The Impact Lawyers offers a FREE newsletter that keeps you up to date on news and analysis about the international latest legal news.
Please complete the form below and click on subscribe to receive The Impact Lawyers Newsletter subscription

Subscribe for free

The Impact Lawyers Newsletter

  • Practical templates and guides for lawyers and law firms
  • Podcasts, videos and webinars explaining how to be sucessful
  • Tips made by lawyers and other practitioners