Financial Package for Fiscal Year 2019
On December 15 of this year, the President’s Office presented to Congress through the Ministry of Treasure and Public Credit, the proposed financial package for the year 2019.
It is still waiting approval through the legislative process, but in the initial document no new taxes are proposed for fiscal year 2019; however, there are some important proposals to avoid certain improper practices.
Below please find some of the aspects which, in our opinion, are the most relevant:
Estimate of Income and Expense
It is estimated that for the Year 2019, revenue will be 5.27 billion pesos, an actual increase of 6.3% compared to the figure approved for 2018.
Tax income will be 3.28 billion pesos, obtained mainly from the collection of Income Tax (1.73 billion pesos) and from Value- Added Tax (989 thousand million pesos).
A net paid expense of 5.8 billion pesos is proposed for 2019 which represents an increase of 6.1% compared to 2018 and resources are included for priority projects of the central sector.
The estimate presents a primary surplus of 1.0% for the year 2019.
Late payment rates
Late payment rates applicable to extended term for the payment of taxes due, will continue in force as follows:
- Interest rate 0.98%
- Rates for payment in installments:
- 1.26% for terms shorter than one year.
- 1.53% for terms between one and two years.
- 1.82% for terms longer than two years.
Penalty reduction
It is proposed to maintain at 40% the reduction for infractions derived from failure to meet tax obligations other than those payment obligations of the taxpayers subject to electronic audits in terms of article 53-B of the Federal Tax Code.
Likewise, it is proposed that only 50% of the amount of the penalty or fine will be paid when the same are imposed for infractions related to failure to meet federal tax obligations other than payment obligations and those other unrelated to statements of tax losses in excess.
Bank withholdings
It is established that the rate of withholding for interest paid by the financial system shall be 1.04% instead of the 0.46% that was applied during the year 2018.
Regime to Start Paying Taxes
For the taxpayers in the Regime to Start Paying Taxes, the option to pay, if applicable, the corresponding VAT and IEPES taxes, is maintained through the application of the benefits program established in article 23 of the bill of law in study, after the previous compliance with the obligations indicated in said regime during the period that taxpayers remain in the same, for the activities they undertake with the general public.
Tax Benefits
It is ratified that tax benefits described in items VIII, IX, X and XI of section A of article 16, shall not be considered as cumulative income for the effects of income tax (ISR). Likewise, it is explained that anything not expressly indicated as non-cumulative, shall be considered as such for the effects of Income Tax according to articles 16 and 90 of the applicable.
It is important to mention, that it is established that the tax benefit regarding contributions made to investment projects in national movie production may not be applied jointly with other treatments that grant tax benefits or incentives. This might detract from and reduce the base of the contributing taxpayers.
Universal Compensation
One of the most substantial changes is the proposal in the referred document to offset universal compensation of amounts in favor from different federal taxes, that is, in case of being approved, only the compensation of amounts in favor may be offset against those resulting due, so long as these are amounts payable for the same tax and for their own debt; therefore, compensation among amounts in favor of the taxpayer shall not be allowed against the amounts withheld due by third parties.
Likewise, it is established that any credit balances for Value-Added Tax may only be credited against taxes due corresponding to the following months until offsetting it or, if applicable, its refund must be requested.
Federal Duties Act
Article 25, section VII, item A), that describes all referent to the dues paid for services of inspection and surveillance provided by the National Banking and Securities Commission (CNBV) is amended.
Financial entities subject to surveillance by the CNBV, as established in article 29-D of the current Federal Dues Act for 2019, save for multiple banking institutions, instead of paying the dues for inspection and supervision indicated in the said article 29-D, may pay the fees which, according to the current provisions in fiscal year 2018, they would have opted to pay for the said fiscal year, plus 5% of said fee.
This, in comparison to the indications in the Federal Income Act for 2018, which establishes the additional percentage at 6%
Regarding item b) of section VII, of article 25, multiple banking institutions referred to in article 29-D, section IV of the Federal Dues Act, the same additional percentage of 10% is maintained which is applied to the results of the addition of items a) and b) of section IV of the said article 29-D.
In relation to item c) of section VII, of article 25, the same option for stock exchanges referred to in article 29-E, fraction III of the Federal Dues Act, is maintained, which consists of the option to pay the amount equivalent in local currency resulting from multiplying one per cent of the stockholders’ equity. In case of exercising this option, stock exchanges shall be subject to the provisions in article 29-K, section II of the Federal Dues Act.
Obligations on money laundering.
It is proposed to implement a system to facilitate compliance through a transitory provision so that the persons conducting vulnerable activities according to the Federal Law to Prevent and Identify Operations with Funds of Illicit Origin (LFPIORPI), may meet their obligations on the subject of prevention and identification of operations with funds of illicit origin or money laundering.
For these effects, the Mexican Internal Revenue Service (SAT) will not impose any fines or, if applicable, will waive the penalties previously set according to the aforesaid law.
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