Relevant tax aspects Covid-19 Mexico
Relevant Tax aspects Covid-19 Mexico
Please do consider that this information may change constantly.
No one should make decisions based on such information without adequate professional service after a detailed study of the particular situation.
Mexican Social Security (IMSS)
On April 14, 2020 the Mexican Institute of Social Security (IMSS) published a press release providing employers with the option of deferring payments of social security quotas for up to 48 months. Although announced in the context of the coronavirus pandemic, the option is not new and is stated in articles 40-C and 40-D of the Social Security law.
What it basically means is that the employer may choose to pay 20% of forthcoming payments instead of 100% and divide the balance in equal payments from 12 and up to 48 months. Those employers choosing this option will however incur interest but will be able to avoid penalties and legal actions from the IMSS. Although the interest may seem high (1.26 to 1.82 percent per month) it does represents some positive news in terms of companies’ cash flows.
This option does not require a guarantee, which should facilitate the registration to this program. However, based on the existing rules, registration for the program does require companies to submit a letter sign by the legal representative requesting the registration to the program. The letter must be submitted at the IMSS local collection office (subdelegacion ventanilla de cobranza). One letter should be submitted for each payment. This request does not include the Infonavit payment. Please note that given the shortage of IMSS personnel in the current situation, delays maybe expected. Indeed, some local offices may be closed due to the current lockdown. The rules for companies to register may change in the next few days based on the current lockdown in place, making it easier for companies to register, however no specific additional rules have been announced by the IMSS as yet.
Annual Tax Return for Individuals
The annual tax return for individuals is due on April 30. The government has not announced any extensions or additional benefits to individuals, so we do recommend to try to file in the days preceding the deadline as the system may get a lot of traffic during the last days which may prevent tax payers from filing on time.
Additionally, the tax authority has published a press release on April 15, 2020 where they present at disposition of the taxpayers a website to generate and update their tax password which is the minimum requirement to file the annual tax return for individuals. With this, the government is looking to decrease the volume of processes that require a physical appointment.
More information (in Spanish) is available at: https://satid.sat.gob.mx
Presentation: Relevant tax aspects Covid-19 Mexico
Below you will find the presentation with the main tax issues to be considered, where the differences between health emergency and health contingency are described, what should we consider for the annual declaration of individuals and lists some of the state incentives declared in the gazettes, in the midst of the Covid-19 pandemic.