Relevant amendments to tax and budgetary laws for 2024
On November 13, 2023, the following were published in the Official Gazette of the Federation (“DOF”): (i) the Decree issuing the Federal Revenue Law for Fiscal Year 2024 (“Revenue Law”), (ii) the Decree amending, adding to and repealing various provisions of the Federal Duties Law, and (iii) the Decree amending and adding various provisions of the Federal Budget and Fiscal Responsibility Law, in order to include the Annex
These changes have a significant impact on the country’s revenue collection, resource distribution and budgetary approach for the coming fiscal year. Below, we detail the aspects that we identified as relevant to these amendments: 1. Revenue Law It provides for tax revenue collection of 4.564924 trillion pesos by the federal government. Within this fiscal policy, the resources obtained by the federation from parastatal entities and companies of the national port system will be allocated to the Interoceanic Corridor of the Isthmus of Tehuantepec, for the purpose of supporting its operations, programs and projects. In accordance with the provisions of articles 54 and 135 of the Income Tax Law (“ISR”), the withholding rate increases, rising from 0.15% in the previous year to 0.50% in this fiscal year. In addition, the transfers of assets, rights and obligations carried out by the State’s productive enterprises, such as CFE and PEMEX, for the purpose of restructuring their subsidiaries and affiliates, will not be considered as disposals for tax purposes, since they constitute internal redistributions of an administrative nature. As for the surcharge rates for extensions in the payment of tax credits, they remain unchanged with respect to the previous fiscal year. With respect to the tax incentives provided for in said law, they remain without relevant changes compared to 2023. Lastly, in relation to the withholding and remittance of ISR on interest paid by the financial system, it is established that the annual withholding rate for fiscal year 2024 will be 1.48%, a significant increase with respect to the 0.15% of the previous year. 2. Federal Duties Law (“LFD”) The LFD presents a series of adjustments aimed at adapting to administrative provisions and international agreements entered into by Mexico. Among the various measures proposed, the specific allocation of the revenues generated by the duty linked to the issuance of the immigration status for tourists to the federal trust related to the company Tren Maya, S.A. de C.V. stands out. This measure seeks to channel those resources to strengthen tourism infrastructure projects. Another relevant aspect is the introduction of fees for customs services in cases where international treaties exclude the charge based on the value of the merchandise. This provision seeks to guarantee a tariff framework consistent with the trade agreements entered into by the country. In addition, an update is proposed to the amount of the duty for concentration notifications under the Federal Economic Competition Law. This adjustment entails an increase in the amount payable, accompanied by a specification of the payment conditions regardless of the agreements or final resolutions of the proceeding. An important institutional reorganization measure is the regulation of the transfer of powers from the Ministry of Infrastructure, Communications and Transport to the Ministry of the Navy, especially with regard to maritime services. This entails a redistribution of responsibilities and a change in the management of these areas. In the educational sphere, it is proposed to establish a payment of 30% of the amount of the fee for the registration of technical or professional degrees issued by institutions of the National Educational System at the upper secondary level. This adjustment seeks to cover the administrative costs associated with these procedures. Likewise, it is proposed to exempt from the payment of duties for forestry services, specifically those related to the authorization of commercial plantations on forest land in excess of 800 hectares. This exemption is aimed at promoting forestry activity in these areas without additional burdens. In the area of water resources, it is proposed to modify the definition of transfer (trasvase) in order to exempt from the corresponding payment when it involves the natural connection between hydrological basins without the intervention of hydraulic infrastructure works. This modification seeks to align the charges with the natural use of water. In addition, adjustments are included to harmonize definitions related to wastewater discharges with the environmental laws in force, the incorporation of payments for the temporary use of the radioelectric spectrum, and the replacement of references to conform with the Federal Telecommunications Law. Lastly, it is proposed to exempt from the payment of duties for access to archaeological zones and cultural assets of the Nation for indigenous communities and tour guides. 3. Federal Budget and Fiscal Responsibility Law (“LFPRH”) The LFPRH has undergone significant changes. Among the most notable amendments, article 2, section III Bis, now includes the Anti-Corruption sector as a cross-cutting annex of the budget. This addition allows this sector to receive specific resources for its development. In article 41, section II, subsection w) has been introduced, detailing the obligation to include in the Draft Expenditure Budget the items intended for the prevention, detection, investigation and sanctioning of acts of corruption, as well as actions for the auditing and control of public resources. This reform also has an impact on subsection c) of section III of article 41, requiring that the budgetary proposal of the programs include the methodology, factors, variables and formulas for anti-corruption actions. In addition, it is established that the quarterly reports of the Executive to the Congress must contain the evolution of the public expenditure provided for anti-corruption, as indicated by numeral iv) of subsection b) of section I of article 107. In accordance with these reforms, article 107 also establishes that the Public Account must reflect the results of the budgetary exercise in the Cross-Cutting Annexes, now incorporating anti-corruption. These changes are reflected in the reform of the LFPRH, specifically in articles 2, section III Bis; 23, sixth paragraph; 41, section III, subsection c); 107, section I, subsection b), sub-subsection iv); in addition, subsection w) is added to section II of article 41 to include the expenditure provisions in the fight against corruption and actions for the control of public resources. These adjustments promote transparency, accountability and strengthen the fight against corruption in the allocation and exercise of public resources. This document is valid as of the date of its issuance and its purpose is merely informative and not interpretative with respect to the information it contains. It is not an opinion, so it should not be considered as advice applicable to particular cases under any circumstance. Should you require professional advice regarding the topics included in the document, we would appreciate being contacted directly. For additional information, contact 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 Diego Benítez, Associate:+52 (55) 5258 1008 | dbenitez@vwys.com.mx Alfonso Leñero, Associate:+52 (55) 5258 1008 | alenero@vwys.com.mx
