Decree granting tax benefits

Decree granting tax benefits

Today, in the morning edition of the Official Gazette of the Federation, the “Decree granting tax benefits to the taxpayers indicated therein” (“Decree”) was published, which entered into force on the same day and will remain in effect until December 31, 2020.

The benefits contemplated in the Decree are directed at the assignees that are obligated to pay the shared-utility duty referred to in the Hydrocarbons Revenue Law (“Assignees”). This is because their income from hydrocarbon sales has been considerably reduced due to the fall in oil prices on international markets. In general terms, the tax benefits granted consist of: 1. A tax incentive for Assignees that are obligated to pay the shared-utility duty, consisting of a tax credit equivalent to the result of multiplying 28% by the difference resulting from subtracting, from the value of the hydrocarbons extracted (during the relevant fiscal year), the amount of the deductions provided for in the Hydrocarbons Revenue Law. 2. A tax incentive for Assignees that make monthly provisional payments on account of the shared-utility duty, consisting of a tax credit equivalent to the result of multiplying 28% by the difference resulting from subtracting, from the value of the hydrocarbons extracted (in the period from the beginning of the fiscal year until the last day of the month to which the payment corresponds), the amount of the deductions provided for in the aforementioned law. The aforementioned tax incentives may be credited, in the first case, against the shared-utility duty to be remitted in March 2021 and, in the second, against the provisional payment resulting in the period to which the payment of the shared-utility duty corresponds. It is important to note that the referenced tax incentives will be applicable for the 2020 fiscal year and will not give rise to any refund, nor will they constitute taxable income for tax purposes. For 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

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