Mexico: Changes Introduced By Federal Revenue Law 2019 In Mexico

Last Updated: 8 February 2019
Article by Susana Martinez

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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