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Mexico's Federal Revenue Law has been published for 2019 and
there are some changes that businesses operating in the country
must understand in order to stay compliant.
The new laws were proposed by the executive branch and approved
by the legislative branch and will be valid for one calendar year.
The laws explain the estimate of revenues for the year, the target
goals for the next five fiscal years, the explanation of the fiscal
expenditures budgets including stimuli as well as situation of
Banco de México, the proposal for net debt and the
evaluation of the public debt policy. While no new taxes have
been created, there are still many changes.
The new law will affect all residents in the country, both as
individuals and as companies. Budget revenues are estimated to be
5.5 billion pesos, of which 1.045 billion corresponds to oil
revenues and 3.28 billion pesos to tax revenues. The financial cost
of debt is the equivalent to of 3% of the GDP, with the hope of
achieving a primary surplus of 1% of GDP for next year. The Federal
Government expects that the nominal exchange rate will close 2019
at 20 pesos per dollar.
Fiscal Stimulus
The fiscal stimulus is still present in the new law and
continues to help businesses and individuals like those who import
diesel, biodiesel and other fuels into the country. It also
benefits taxpayers who are dedicated exclusively to public and
private freight or passenger land transport, using the national
network of highways. Other fiscal stimulus packages are available
for taxpayers whose total annual gross income from sale or transfer
of minerals and substances referred to in the Mining Law, is less
than 50 million pesos, and for companies that employ people with
motor disabilities.
Universal Tax offset
The old procedure of general tax offsetting is now abolished and
there is a new law that states taxpayers can offset favourable tax
balances against the same tax. This will not apply to withholding
tax on third party payments. VAT balances are only creditable
against VAT inputs. This may have adverse cash flow
implications for taxpayers that have overpayments but cannot offset
the overpayments against other taxes.
Anti-money laundering law obligations
The law states that the taxpayers who must comply with Anti-
money laundering law (AMLL) obligations are entitled to implement
regularization programs. These obligations are related to
identification and reporting of possible vulnerable activities,
like issuing credit cards, purchase and sale of real estate,
foreign trade activities and more. The law states that no penalties
should be determined for the regularization program period, July
2013-December 2018.
TMF Group
Our experts at
TMF Mexico understand the new laws and can help your business
comply with all the new obligations. They can also help with
businesses that have activities with the options of fiscal
stimuli. If you have a business in Mexico or are planning to
expand, we can provide full administrative support, including
entity incorporation, legal administrative compliance,
representation and domiciliation services, HR and payroll and
accounting & tax services.
Talk to us.
Are you planning to expand to Mexico? Talk to us about how we
can help you with your incorporation and compliance operations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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