SUPPORT FOR THE AREAS AFFECTED BY HURRICANE OTIS

November 10, 2023

TAX BENEFITS.

On October 30, 2023, the "Decree by which several tax benefits are granted to taxpayers in the areas affected by severe rains and strong winds during October 24, 2023" (the “Decree”) was published in the Official Gazette, becoming effective on the same day of its publication.
The decree derives from the natural disaster caused last October 24th, 2023 in several areas of the State of Guerrero by Hurricane Otis, which left millions of dollars in damage, as well as infrastructure losses.
The Decree grants tax benefits to taxpayers who have their tax domicile, branch, agency or any other establishment in the affected areas. The areas considered affected in the state of Guerrero are indicated in the Natural Disaster Declaration issued by the competent authority.

The following tax benefits were granted:
 

Immediate Deduction:
 

A tax incentive is granted, consisting of immediately deducting investments in new or used fixed assets, during the period from October to December 2023, applying the rate of 100% on the original amount of the investment, provided that they are used exclusively and permanently in affected areas and are destined for replacement, reconstruction or rehabilitation.
This will not be applicable in the case of automobiles, armored equipment or any fixed asset that is not individually identifiable, nor in the case of airplanes other than those used for agricultural aerial spraying.

Installments for the payment of Income Tax withholdings for salaries:
 

Taxpayers that make payments for salaries and in general for the rendering of a subordinated personal service, except those assimilated to salaries, will be able to pay the income tax (ISR) withholdings of their workers, corresponding to October, November and December 2023, in three equal installments, provided that the subordinated personal service is rendered in affected areas.
The installments will be paid in January, February and March 2024, without having to pay updates, surcharges or fines.
 

VAT and IESPS installments:
 

Taxpayers will be able to pay in 3 equal installments, the final payment of Value Added Tax (VAT) and the Special Tax on Production and Services (IEPS) corresponding to the months of October, November and December 2023.
Such installments will be payable in January, February and March 2024, without having to pay updates, surcharges or fines.
The taxpayers filed the respective notice before the Federal Taxpayers Registry (RFC) prior to October 24 will be entitled to adopt these tax benefits.

Exemption of provisional ISR payments:
 

It shall be exempted from making provisional Income Tax payments for October, November and December 2023, from the fourth quarter of 2023, as well as the third quarterly period of 2023, as applicable, for income obtained by legal entities under the general regime and the Simplified Trust Regime (RESICO), as well as for the individuals with income arising from: i) business and professional activities, ii) electronic platforms, iii) leasing, iv) RESICO, provided that such income corresponds to their tax domicile, agency, branch or any other establishment, which is located in affected areas.

Deferral of RIF returns:
 

Individuals still taxed under the Tax Incorporation Regime (RIF), in force until December 31, 2021, who have their tax domicile, agency, branch or any other establishment in affected areas, are deferred the obligation to file returns corresponding to the 5th and 6th two-month periods of the fiscal year 2023, which must be filed no later than February 2024. This is not considered a non-compliance for which the taxpayer must stop paying taxes as RIF, nor will it imply payment of updates, surcharges and fines.

Income through electronic platforms:
 

Individuals who obtain income through technological platforms and receive part of the payment directly from users or purchasers, who choose to pay ISR on such income received directly, considering it as a definitive payment, and who have their tax domicile in affected areas, are deferred the obligation to file ISR payments, corresponding to October, November and December 2023, which must be paid no later than February 2024. This will not imply payment of updates, surcharges and fines.

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AGAPES VAT returns:

Taxpayers taxed under the regime for agricultural, livestock, forestry and fishing activities, dedicated exclusively to such activities, and who choose to make half-yearly provisional income tax payments, during the 2nd semester of 2023, may choose to file monthly VAT returns corresponding to such half-year period.
 

Deadline for VAT refunds:
 

VAT refund requests filed up to December 2023 by taxpayers in affected areas, corresponding to balances in favor generated prior to the aforementioned month, will be processed in 20 days, instead of the 40-day term provided in Article 22 of the Federal Tax Code.
The foregoing will not be applicable in the following cases:
• Taxpayers to whom the presumption of inexistent transactions covered by tax receipts has been applied.
• Taxpayers that request a refund based on tax receipts issued by taxpayers from the list referred to in the previous item.
• Taxpayers who have not corrected irregularities or denied causes that motivated the temporary restriction of the digital seal certificate (CSD).
• Taxpayers that prior to the entry into force of the Decree have been subject to the exercise of verification powers in order to verify the origin of the balance in favor.

Installments for the payment of omitted taxes:

Taxpayers who, prior to the 24th of October 2023 have been authorized to make the payment in installments of omitted taxes and their accessories and have their tax domicile in affected zones, may defer the payment of the installments corresponding to October 2023 and subsequent authorized installments, resuming, under the same terms and conditions, the payment program as from February 2024, without it being considered that the installments were not paid on time, therefore, no surcharges for extension or late payment will be payable.

Benefits of payments in installments:
 

Taxpayers who pay in installments according to the Decree are not required to guarantee the tax interest.
In the event that they fail to pay totally or partially any of the installments referred to in the Decree, the benefits of payment in installments granted in the Decree will be considered revoked. In this case, the authorities will demand the payment of the totality of the amounts owed to the federal tax authorities, with the corresponding updates and surcharges.