The Economic Budget for 2021 was submitted to Congress on September 8, 2020. It includes several initiatives, such as the Decree to reform, add, and repeal various provisions of the Income Tax Act, the Value Added Tax Act, and the Federation’s Tax Code.
The initiative to reform the Tax Act for 2021 includes the following changes to the Federation’s Tax Code (CFF, for its acronym in Spanish):
- Modification to Article 42 of the CFF
Modification: for the purposes of the faculties foreseen in Article 42, we propose clarifying that all the provisions of the Customs Law shall apply only when applicable, and not in all cases.
Reason for the Modification: foreign goods that could not legally justify their presence in Mexico were subjected to seizure as contemplated in the Customs Law.
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Modification to the last paragraph of Article 52-A of the CFF
Modification: the tax authorities shall include an electronic review procedure for e-commerce within the next six months. Likewise, it is necessary – for those cases when an international certification has been requested – to extend the term to a maximum of two years.
Reason for the Modification: the authorities deem this term necessary to exist for those cases where international certifications are required since, otherwise, the essence of electronic tax procedures is lost.
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Modification to the tenth paragraph of Article 92 of the CFF
Modification: definition of goods as “products, items, effects, and any other goods, even if laws deem them inalienable or irreducible to private ownership”.
Reason for the Modification: the gap in dates when the CFF and the Customs Law came into full force created discrepancies in the definitions.
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Addition to part XXI of Article 103
Modification: there is a presumption of smuggling when temporarily imported goods are omitted, returned, transferred, or their customs regime is changed.
Reason for the Modification: there are companies that took advantage of the import of foreign goods on a temporary basis, avoiding paying the corresponding taxes and fees as per the customs imports without returning, transferring, or changing said goods to a different regime once the program ended.
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Modification to part III (f) of Article 52-A of the CFF
Modification: the set order shall not be followed when the matter of verification pertains to the following:
- Leverage derived from the authorization or concession granted for the provision of management services.
- Warehousing and custody of foreign trade goods.
- Tariff classification.
- Compliance with non-tariff regulations or restrictions.
- Legal importation.
- Staying and holding of foreign goods in domestic territory.
- Foreign trade fines.
Reason for the Modification: increasing legal safety on tax issues to taxpayers.
Likewise, this initiative incurs on the following factors that impact taxpayers who carry out foreign trade operations:
- The tax authorities may deem a return request as not submitted when the taxpayer, or their place of residence as recorded, is not located in Mexico’s Taxpayers Federal Registry (RFC, for its acronym in Spanish).
- The tax authorities may widen the term to submit reports by 10 days when their contents are difficult to obtain or submit.
- The tax authorities may forego the sequential review of the ruling of leverage derived from the authorization or concession to provide foreign trade management, warehousing, or custody services.
- People who export goods subject to disposal, or which disposal is free, shall ask for the corresponding Digital Tax Receipt over the Internet (CFDI, for its acronym in Spanish).
We suggest companies involved in foreign trade analyze all the changes in the initiative to reform the Tax Act so to best assess the actions to be taken.
Companies specializing in foreign trade, such as Solistica, can provide sound advice on these and other changes in customs matters that will be implemented during 2021.
