On November 12, 2020, the Federal Executive submitted to the Chamber of Deputies of the Union Congress the “Initiative of the Federal Executive, which reforms, adds and deviates from various provisions of the Federal Labor Act, the Social Insurance Act and the Employee Housing Act, and deviates from the Fund Institute, Federal Tax Code, Income Tax Law and Value Added Tax Law. “To this day, this proposed change is still being discussed and reviewed. Notwithstanding the proposed federal legislation, additional systems to regulate outsourcing have been developed at the local level.
In Mexico City, the Mexico City Tax Code (TCMX) amendment went into effect on January 1, 2021, adding an obligation for individuals and legal entities to submit a notice to the Mexico City Ministry of Administration and Finance (MAF ) Submit. when Hiring or subcontracting from a contractor, which is the subcontracting of personnel. (Currently, the obligation is based on Article 15-A of the Federal Labor Code. Additionally, we understand that this obligation will be updated if the payment of allowances to subcontracted personnel is subject to Mexico City wage tax.)
The announcement must be submitted through the application, which is currently under development and created by the MAF through the Contribution Administration System (CAS). The MAF will temporarily provide an e-mail for the preliminary transmission of the corresponding notifications and will contain, among other things, the original or a certified copy of the contract within 10 days of the execution or amendment of the respective contract. A transitional provision provides for an initial period of 30 days to submit notification of contracts that came into effect or changed before January 1, 2021.
The MAF has the authority to request the submission of omitted notices within 10 days. The fine for such omission or for early filing ranges from 3,713 Mexican pesos to 9,413 Mexican pesos.
The state of Quintana Roo has already implemented similar requirements. On January 1, 2019, an amendment to the State Income Tax Act came into effect introducing a similar obligation regarding the payment of cash or benefits in kind for subordinate personal work regardless of the designation assigned to them deriving from the construction for a specific work or time .
© 2020, Ogletree, Deakins, Nash, Smoak and Stewart, PC, All rights reserved.National Law Review, Volume XI, Number 29