Decree – Tax benefits for taxpayers in the affected areas of the state of Guerrero
On October 30, 2023, the “Decree granting various tax benefits to the taxpayers in the affected areas indicated herein as a result of the severe rains and strong winds on October 24, 2023” (the “Decree”) was published in the Federal Official Gazette, through which the Ministry of Finance and Public Credit seeks to contribute to the reactivation of the productive base and the preservation of sources of employment in the areas affected by the hurricane
Incentives The Decree grants the following tax incentives to taxpayers whose tax domicile, agency, branch or any other establishment is located in the municipalities of Coyuca de Benítez, Benito Juárez, Acapulco de Juárez, Atoyac de Álvarez, Xalpatláhuac and Técpan de Galeana in the state of Guerrero: 1. A tax incentive is granted consisting of the immediate deduction of investments made in new or used fixed-asset property carried out in such municipalities during the period comprised between October and December 2023, in the fiscal year in which such property is acquired, applying a rate of 100 percent on the original amount of the investment, provided that such fixed assets are used exclusively and permanently in the aforementioned areas and are intended for the replacement, reconstruction or rehabilitation thereof. It is worth noting that the incentive in question shall not be applicable in the case of automobiles, automobile armoring equipment or any fixed-asset property that is not individually identifiable, nor in the case of aircraft other than those used for agricultural aerial spraying. In turn, taxpayers that hold damage insurance on fixed-asset property that has been declared a partial or total loss due to Hurricane Otis may apply the tax incentive only on the amount of the sums additional to those that, as the case may be, are recovered by way of insurance indemnity payments and that are invested in fixed-asset property. 2. A tax incentive is granted to taxpayers that make payments for income from wages and salaries and, in general, for the rendering of a subordinated personal service (except for those treated as wages), consisting of the ability to remit the income tax withholdings of their workers corresponding to the months of October, November and December 2023 in three equal installments, provided that the subordinated personal service for which such income is paid is rendered in the affected areas. The first installment shall be remitted in January, the second in February and the third in March 2024, without any inflationary adjustments, surcharges or fines being payable for these purposes. 3. A tax incentive is granted to taxpayers consisting of remitting in three equal installments the final payment of the value-added tax and the special tax on production and services payable by them corresponding to the months of October, November and December 2023, for the acts or activities pertaining to their tax domicile, agency, branch or any other establishment located in the affected areas. The first installment shall be remitted in January, the second in February and the third in March 2024, without any inflationary adjustments, surcharges or fines being payable for these purposes. 4. A tax incentive is granted whereby legal entities that are taxed under the terms of Titles II or VII, Chapter XII of the Income Tax Law, and individuals that are taxed under the terms of Title IV, Chapter II, Sections I and III and Chapter III of the same Law, are exempted from the obligation to make provisional income tax payments corresponding to the months of October, November and December 2023, to the fourth quarter of 2023, as well as to the third four-month period of 2023, as applicable. This, provided that such income pertains to their tax domicile, agency, branch or any other establishment located in the affected areas. Likewise, individuals that are taxed under the terms of Title IV, Chapter II, Section IV of the Income Tax Law are exempted from the obligation to file the monthly payments corresponding to October, November and December 2023, provided that the income pertains to their tax domicile, agency, branch or any other establishment located in the affected areas. 5. A tax benefit is granted to individuals that are taxed under the terms of Title IV, Chapter II, Section II of the Income Tax Law in force until December 31, 2021, consisting of the deferral of the obligation to file the returns corresponding to the fifth and sixth two-month periods of the 2023 fiscal year until no later than February 2024, provided that the income pertains to their tax domicile, agency, branch or any other establishment located in such affected areas. This, without such deferral being considered noncompliance for the purposes of the provisions of Article 112, section VIII, second paragraph, of the aforementioned statute. In addition, individuals referred to in Article 113-A, last paragraph of the Income Tax Law, are granted a deferral of the obligation to file the income tax payments corresponding to October, November and December 2023, which must be remitted no later than February 2024, provided that the income pertains to their tax domicile, agency, branch or any other establishment located in the affected areas. It is important to note that the provisions of this item shall not give rise to the payment of inflationary adjustments, surcharges and fines. 6. A tax incentive is granted to taxpayers that are engaged exclusively in agricultural, livestock, fishing or forestry activities, that elect to make semiannual provisional income tax payments pursuant to the provisions of rule 1.3. of the “Resolution of administrative facilities for the sectors of taxpayers indicated therein for 2023,” published in the Federal Official Gazette on March 3, 2023, during the second half of 2023, who may elect to file monthly the value-added tax returns corresponding to said half-year, in accordance with the Value-Added Tax Law, without being considered to fail to comply with the requirements established in the aforementioned resolution of facilities in order to elect to file semiannual provisional income tax payments. 7. In addition to the foregoing items, refund requests for value-added tax filed through the month of December 2023 by taxpayers whose tax domicile, agency, branch or any other establishment is located in the affected areas, corresponding to favorable balances generated prior to the aforementioned month, shall be processed within half of the term established in Article 22 of the Federal Tax Code, namely, 20 business days. This shall not be applicable to: i. Taxpayers to whom the presumption established in Article 69-B of the Federal Tax Code has been applied, once the list referred to in the fourth paragraph of the aforementioned article has been published in the Federal Official Gazette and on the Tax Administration Service Portal. ii. Taxpayers that request the refund based on tax receipts issued by taxpayers included in the list referred to in the preceding section. iii. Taxpayers whose Digital Seal Certificate has been cancelled for having failed to remedy or disprove the irregularities detected by the tax authorities under the terms of Article 17-H, section X of the Federal Tax Code. iv. Taxpayers that, prior to the entry into force of the decree, have been subject to the exercise of verification powers to confirm the appropriateness of the favorable balance. 8. On the other hand, it is established that taxpayers that, prior to the month of October 2023, hold authorization to make payment on an installment basis of omitted contributions and their accessories under the terms of Article 66 of the Federal Tax Code and that have their tax domicile in the affected areas referred to in the Fourteenth Article of this decree, may defer the payment of the installments corresponding to the month of October 2023 and subsequent ones that have been authorized to them, resuming, under the same authorized terms and conditions, the payment schedule of such installments as of the month of February 2024, without the installments being considered, for these purposes, not to have been paid in a timely manner, and therefore no surcharges for extension or default shall be payable. 9. Finally, the Decree establishes that individuals whose dwelling is located in the affected areas referred to in the Fourteenth Article of this decree, that are taxed under the terms of Title IV of the Income Tax Law, shall not consider as taxable income for the purposes of said law the income from economic or monetary support that they receive from legal entities or trusts authorized to receive donations deductible for income tax purposes, provided that such economic or monetary support does not come from related parties under the terms of the Income Tax Law and is used for the reconstruction or rehabilitation of their dwelling. VWYS has a highly trained tax team to assist you in obtaining the benefits provided in the Decree. We hope you find this note useful, and for more information or clarification of any matter, below is the contact information of our experts: Alejandro Torres, Partner:+52 (55) 5258-1072 | ajtorres@vwys.com.mx Luis Enrique Torres, Counsel:+52 (55) 5258-1023 | ltorres@vwys.com.mx Juan Manuel Morán, Associate:+52 (55) 5258-1072 | jmoran@vwys.com.mx
