Payment plans for employer-employee contributions are authorized

On April 13, 2020, the H. Technical Council of the Mexican Social Security Institute (Instituto Mexicano del Seguro Social) (IMSS) issued a communication regarding the legal and administrative instruments to help perform the payment of employer-employee contributions. The relevant opportunities consist in the possibility of paying such contributions in installments.

The aforementioned communication sets forth that, in accordance with the provisions of Articles 40-C and 40-D of the Social Security Law (Ley del Seguro Social), to be a beneficiary of the referred opportunities, an agreement for payment in installments must be entered into, in which it shall be agreed that the initial amount to be paid will be 20% of the employer’s contribution and 100% of the employee’s contribution, and the remaining amount may be deferred up to a maximum term of 48 months. Likewise, the deferred payment of the retirement, advanced age unemployment and old age insurance contributions may be authorized for complete periods due, without waiving accessories.

It is important to emphasize that, the aforementioned payment will be considered as not paid on due time, therefore, it will generate adjustments and late fees. The benefit of entering into said agreement will be that the monthly interest rate will range between 1.26% and 1.82% depending on the term agreed, whether it is 12, 24 or more than 24 months from the date of its execution.

Although, normally, when presenting a request for deferred payment or partial payment, the corresponding fiscal interest must be guaranteed in terms of the provisions of the Federal Fiscal Code (Código Fiscal de la Federación), for the execution of the aforementioned agreement it will not be necessary to present any type of guarantee in accordance with the ACDO.AS2.HCT.300419/150.P.DIR agreement regarding the authorization of the exemption from the obligation to guarantee fiscal interest to employers and other obliged subjects dated April 30, 2019 and published in the Federal Official Gazette (Diario Oficial de la Federación) (DOF) on May 9, 2019.

In the event of timely payment of the installments as mentioned in the executed agreement, the fines for late payment may be reduced by up to 90% (ninety percent) in accordance with the provisions of AGREEMENT 187/2003, issued by the H. Technical Council of the IMSS on May 14, 2003 and published in the DOF on July 15, 2003. In the event of a breach of the executed agreement, the authorization for payment in installments will be revoked and payment will be required through an administrative enforcement procedure.

The Social Security Law Regulations on Affiliation, Classification of Companies, Collection and Control (Reglamento de la Ley del Seguro Social en materia de Afiliación, Clasificación de Empresas, Recaudación y Fiscalización) sets forth the procedure, requirements and information that shall be filed along with the request for deferred or partial payment, which must be submitted to the administrative unit that controls the employer’s registry of the interested party.

If you have any questions or comments in relation to the aforementioned, please do not hesitate to contact any of our partners or associates

Sincerely,

Cannizzo, Ortiz y Asociados, S.C.