October 12, 2011
 
Dear clients and friends
As follows you will find a summary of the important points of the Decree published today, by means of which they are established basically requirements for the application of the Maquila Incentive in Business Flat Tax matters (Federal Official Gazette NOV-5-07), this requirements will become valid on January 1 2012 and will be applicable for the periods of 2012 and 2013:
I.              File final annual or monthly tax returns.
II.           Don’t have fiscal determined credits, firm or not.
III.         File auditor’s report or alternate information, in case of being obligated.
IV.        File DIOT.
V.           File DIEMSE.
VI.        Do not be in liquidation.
VII.      That the Tax ID number data is not false.
VIII.   Comply with the obligations of article 24 of the IMMEX Decree.
IX.        Have probationary documentation of the foreign trade operations.
X.           Attend requirements in fiscal or customs matters.
XI.        That the foreigner (provider or client), pointed in the customs declaration or invoice is not false or inexistent.
 
Furthermore it establishes that the noncompliance of fractions I-V is a cause of suspension of the Importers Registry, not withstanding this, it clarifies that fraction V will become valid when the Revenue Administration Service (SAT) appoints it by means of rules of general character. In relation to such, it is clarified that since January 2010 it was published such application in the SAT’s webpage, nevertheless until now it is established as an obligation for all the maquilas, considering that they have transfer pricing study or safe harbor, when previously it could be simply be used as a facility to avoid the presentation of the SH writ.
In addition, it clarifies that the noncompliance of any of the fractions or the lack of separation of the information of the maquila operations from those that are not in the annual tax return, it loses the right of incentive, and the authority will demand the payment of the quantities that should have corresponded to be paid to the taxpayers not applying the fiscal incentive, with the actualization and the corresponding extra charges. 
 

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Contacts:
 
Guillermo Gómez
ggomez@mmc-mx.com
Tax Partner
 
Mauricio Monroy
mmonroy@mmc-mx.com
Tax and Managing Partner

1. There is not an automatic payroll system in the marketplace. Although there are very good and friendly payroll systems, they all should be properly fed in order to avoid errors. Is not uncommon, when we found involuntary mistakes that clients reply is: “I thought the system automatically will change the minimum salary there” as an example. Fortunately, there are ways to avoid them.

2. In the last few years, the addition of different shifts in companies created confusion in the computing of the employees’ overtime, vacations and hourly benefits. We have noticed that although there are very common less than 8 hours a day shifts, the compensations are computed with 8 hours a day basis. These errors are not carrying out differences of contributions to the social security, but may lead to labor problems with employees, such they are somehow underpaid.

3. Nevertheless all middle size and big companies are currently making reconciliations between Payroll system, SUA and IMSS databases; there are still some errors in names and social security numbers that are not being properly amended.

4. The lean of administrative structure in companies is now visible. In the last few years of recession, austerity was a trend and some finance and HR departments were cut down. Now we are seeing some negative consequences such as lack of internal control in payroll process and errors in tax and contributions payments in general.

5. Now, the Housing Fund authorities (INFONAVIT) are being more aggressive with Housing Fund mortgage withholdings, and collecting all differences to the employers who are jointly responsible. Keep in mind that nearly half of employees now, have a credit.

The good news is that all errors named before could be not only corrected, but prevented, and as your advisors, we can help you. There are some easy ways to improve your internal control and minimize involuntary mistakes such as:

1. Have your variable entries in payroll reviewed either internally or externally.

2. Have your withholdings of Housing Fund loan payments properly reviewed and reconciled every two months.

3. Have your records in payroll system, SUA and IMSS reconciled and follow up with any inconsistence.

4. Remember that if there are different shifts in your company, hourly compensations and benefits should be computed accordingly.

5. Your lean team can be strong if they are continuously trained and educated and there is a sound internal control.

6. Do not wait until the end of the year or to the final audit to have your contributions proved.

We will be more than glad to assist you in any of these issues, please contact us.

Best regards,


Contacts:


Elisa Ibanez
Human Capital Taxation Partner
elisa.ibanez@monroycp.com
011-52-664-972-9072 ext. 105

Guillermo Gomez
Tax Partner
guillermo.gomez@monroycp.com
011-52-664-972-9072 ext. 104

Mauricio Monroy
Tax and Managing Partner
mauricio.monroy@monroycp.com