Posted by Mario Barrera
On June 1, 2018, Mexican President Enrique Peña Nieto published a decree in the Federal Register amending several provisions of different statutes, including the Federal Fiscal Code (Código Fiscal de la Federación). The most relevant amendments to the Code are the following:
1. For persons engaged in the production, processing, transportation, storage, distribution, or sale of hydrocarbons and petroleum, it includes within the concept of “accounting records” computer equipment and programs designed to keep volumetric controls as well as test lab reports determining the sort of hydrocarbon or petroleum concerned, in addition to octane in the case of gasoline. Further, such equipment, programs, and reports must be obtained from persons authorized by the Mexican tax authority. As a result, such equipment, programs, and reports must be kept by taxpayers until the relevant statute of limitations elapses, which typically encompasses five years. In addition, the tax authority may request that taxpayers produce such items in case of an examination.
2. Losses may only be transferred from one taxpayer to another in very specific cases. The amendment to the Code introduces a procedure allowing the tax authority to determine whether such a transfer is illegal. Such determination is possible whenever the recipient of the relevant losses was a party to a restructure, spinoff, merger, or change of shareholders and certain tests are met. The consequence of such determination is that the recipient of the losses may not carry them forward and, if it already did, it must reverse the effect thereof within 30 days or the tax authority may begin a full examination.
If you have any questions about the information contained in this post, please contact Mario Barrera or the Thompson & Knight tax attorney with whom you regularly work.