The “Decree granting tax benefits to the indicated taxpayers” (“Decree”) was published in the morning edition of the Official Federal Gazette today, entering into force on the same day and remaining in effect until December 31, 2020.
The benefits contemplated in the Decree are directed toward the permit holders that are obligated to pay the fee for the shared profit referred to in the Hydrocarbons Revenue Law (“Permit Holders”). The foregoing taking into account that the income from hydrocarbon sales has diminished considerably due to the fall in oil and gas prices in the international markets.
In general terms, the tax benefits granted consist of:
1. Tax incentive to the Permit Holders that are obligated to the payment of the fee for the shared profit , consisting of a tax credit equivalent to the result of multiplying 28% to the difference resulting from subtracting from the value of the hydrocarbons extracted (during the fiscal year in question) the amount of the deductions established in the Hydrocarbons Revenue Law.
2. Tax incentive to the Permit Holders that make monthly provisional payments, for the fee for the shared profit, consisting of a tax credit equivalent to the result of multiplying 28% to the difference resulting from subtracting from the value of the hydrocarbons extracted (in the period from the initiation of the fiscal year until the last day of the month the payment corresponds to) the amount of the deductions established in the referred Law .
The aforementioned tax incentives may be credited, in the first case, against the fee for the shared profit which should be paid in March 2021 and, in the second case, against the provisional payment resulting in the period corresponding to the payment of the fee for the shared profit.
It is important to mention that the referred tax incentives will be applicable for the 2020 fiscal year and will not give rise to any refund nor constitute accruable income for tax purposes.
To obtain additional information contact our experts:
Fernando Moreno, Partner: +52 (55) 5258 1008 | fmoreno@vwys.com.mx
Jorge Díaz, Associate: +52 (55) 5258 1008 | jdiaz@vwys.com.mx
Diego Benítez, Associate: +52 (55) 5258 1008 | dbenitez@vwys.com.mx