Aug 30, 2020, By Jorge Gutierrez
VAT and IEPS certification derives from the 2014 Tax Reform where it was established that temporary imports of goods would be subject to the payment of these taxes, being possible to “apply a tax credit consisting of an amount equivalent to 100% of the tax… provided the obtaining of a certification from the Tax Administration Service (SAT”.
From the explanatory memorandum of the Reform, it was contemplated that this certification was free, since it represented a form of mitigation of the effects that it would cause in the industry, that the goods that will not be consumed in national territory were subject to this payment, altering the object of these laws, whose purpose is to tax national consumption.
In this context, the Federal Law of Rights has not been modified in its substantive part, the updates that have been made are exclusively in the quantities.
It is a notorious fact that the payment of rights for this certification was not contemplated in the described regulations, it was until five years later that this scheme came into force, it was established for the first time by means of rules in the first modification to the RGCE 2020, derived from a novel interpretation, which would be questionable, remember that the principle of legality, hierarchical subordination of the laws and reservations of law, establish what can be put in Rules.
The reality is that the doctrine of the jurisprudence of the Supreme Court of Justice of the Nation SCJN), even though it has been recognized the clause enabling that empowers to SAT the emission of rules of general character, the Court has not addressed specific subjects, as how the SAT can through rules establish procedures, deadlines, precatory measurements or obligations other to those pointed out by a law. In this operational aspect, the non-challenge of the structure of the rules generates the publication of these rules with the current scope, since no precedent has been generated to arrive to the interpretation of the Courts.
On the other hand, the SAT recommendation for the payment of these rights retroactively was made on the SAT website, that is, outside the norm; on average companies will have to cover approximately 300,000 pesos with updates and surcharges, when apparently according to the rules in force in those years they were misled by not considering that payment in the regulations or in the application, in such a way that, existing more than 3,500 companies, the figure that the Federal Government expects to collect for this right exceeds the figure of 1,000 million pesos, by establishing a scope greater than a contribution whose historical origin can be linked to Article 100-A of the Customs Law and not to Article 28-A of the VAT Law.
Regarding the retroactivity of collection, there is a lot of literature that could be analyzed and Mexicans in this context know their rights, so I will not ignore what is generally known to everyone, of course, that in operational terms of compliance, for many that payment will be necessary.
That said, assuming without granting that the origin of the tax obligation is effectively generated and the payment of rights proceeds retroactively, it is pertinent to refer to Article 3 of the Federal Rights Law, which establishes that the payment of rights must be made from the moment the taxpayer carries out the certification request process, as seen below:
“Article 3. The payment of the rights established by this Law must be made by the taxpayer prior to the provision of the services or prior to the use, enjoyment, exploitation or exploitation of goods in the public domain of the Federation, except in cases where it is expressly indicated that it is later.”
Once the authorization is granted and it is valid for more than one year, the first and fifth paragraphs of article 4 of the Federal Rights Law establish the following:
“Article 4. When Title I of this Law, establishes that the rights will be paid by monthly payments or annuities, it will be understood that said payments are prior to the provision of the corresponding service, except in cases where, due to the nature of the service, payment cannot be made with prior to the provision of the service.”
When it comes to annuities, the taxpayer will make the payment of the right in January of the year to which the payment corresponds and must present the proof of the imbursement to the agency that provides the service, not later than the 15th of the following February, except in cases where another term is indicated.
In this situation, to the Registration in the Business Certification Scheme, VAT and IEPS modality applying by analogy the Certification in Authorized Economic Operator, the payment obligation, as well as its annuity is foreseen in subsection m) of the first paragraph and in the second paragraph of article 40 of the Federal Rights Law, respectively:
“Article 40. For the procedure and, where appropriate, for the granting of the inscriptions, concessions or authorizations indicated below, the customs duty of registrations, concessions and authorizations will be paid, in accordance with the following quotas:
…
m.- For the registration in the certified companies register $29,747.90 D.O.F. 12/28/2019…”
The rights referred to in paragraphs b), c), d), e), h), k), l), m), n), ñ), o), p), q), s) and t) of this article will be paid annually. The rights referred to in paragraphs a), f), g), i), j) and r) of this article will be paid only once. Reformed Paragraph D.O.F. 12/09/2019.
In this order of ideas, contrasting the newsletters advertised in unofficial media by the SAT, it can generate doubt in the application.
That is why, based on the harmonic reading of these articles, the criterion of the authority published on August 5 of this year on its official website, is not shared. By means of an informative note recommending the payment of rights established in subsection m) of article 40 of the Federal Rights Law, in accordance with the fee in force in the year in which its registration was authorized or its renewal, as well as each year in which the Registry in the Certification Scheme of Companies VAT and IEPS modality was in force.
Notwithstanding, the recommendation is to make the corresponding retroactive payments as indicated in said information note, in order to avoid possible requirements of the authority and, with it, to avoid fines as sustained by the same bulletin, as well as to evaluate whether the payment should be made with updates and surcharges, since 2014 when the request was made or since the beginning of the effect in January 2015 (for those companies that obtained their certification before 2015), as the SAT implies in its statement.
In this case, the position of each taxpayer against the rules invoked and the tax authority interpretation should be evaluated, for the possibility arises that some of these periods may find opposition in the legal figure of the cessation of the collection faculty of the authority in terms of article 67 of the Federal Tax Code or, in a given case, the prescription of the article 147 of the same code regarding payment of rights, whose obligation was generated or born in the period 2014 and part of 2015, whose convenience should be analyzed by your tax areas.
Likewise, according to the articles in question, in the event of automatic renewal rejections and/or negative resolutions, it is necessary to evaluate with the corresponding areas the option of payment of said procedures, for the reason that even if they were not approved they were processed, which could give a patter to the authority to request the corresponding payment, derived from this new interpretation of the legislation.
In this link you will find into detail the following:
- Information note, “Payment of registration rights in the Business Certification Scheme”
- Example of determination
- Simulator
- Step by step assistance
Once the payment has been made, the proof could be electronically sent referring to the denomination and Taxpayer Federal Registration of the company, as well as the Registration in the Scheme of Certification of Business that corresponds, specifying the modality and rubric to the following e-mail: certificacion.iva.ieps@sat.gob.mx
Finally, people in Mexico have the right to judicial protection to exercise the ordinary or extraordinary legal means established by the legal provisions so that they can submit their petition to a Court and decide on the legality or illegality, constitutionality or unconstitutionality of this act of annoyance pursuant to Constitutional Article 17.
- Adapted. O. Octavio de la Torre, TLC Asociados S.C.
SYMBIOSIS is actively advising Canadian companies with operations in Mexico on all aspects of the broad Legal Compliance and Corporate Governance. We are tracking developments and are available to assist foreign investors with questions about Mexico’s legal framework and strict compliance options.
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