Tax Reform 2022

On Tuesday, October 19, the Senate approved the so-called Miscelanea Fiscal, the Federal Tax Act and the Revenue Law for 2022. Currently, the fiscal package has been turned over for enactment by the Federal Executive.

These tax reforms reaffirm the federal government’s position of not creating new taxes or increasing the stipulated rates; however, given the need to (i) strengthen public revenue collection, (ii) improve tax administration, and (iii) combat tax evasion, avoidance and corruption, measures have been agreed to strengthen the tax authority’s oversight.

Among the laws that will be amended are the Income Tax Law, the Value Added Tax Law, the Production and Services Tax Law, the Federal New Automobile Tax Law and the Federal Tax Code.

Some of the approved changes are as follows:

1. The requirements for the deduction of uncollectible accounts are tightened, which may be made until the civil or mercantile lawsuits for their collection are exhausted;

2. The Simplified Trust Regime is introduced in the Income Tax Law for corporations with income up to 35 million pesos and for individuals with income up to 3.5 million pesos, effective as of January 1, 2022;

3. It will be mandatory for young people over 18 years of age to register in the Federal Taxpayers Registry, regardless of whether or not they have an economic activity, although no penalties are set forth for not complying with this obligation;

4. The tax deduction of individuals for donations to civil organizations will be limited; they will only be able to deduct the equivalent of 15 percent of their annual income; and

5. The tax and criminal co-responsibility of auditors-accountants with the tax authority to report conducts that may be considered tax crimes is included.

If you would like more information in this regard, please do not hesitate to contact any of our partners or associates.

Yours sincerely,

Cannizzo