As we discussed in our Tax News No. 18, on September 1 of this year, certain transitional provisions of the Decree reforming various provisions on subcontracting[1] published in the Official Gazette of the Federation on April 23, 2021, will enter into force, which will involve the adoption of administrative review procedures for taxpayers who hire specialized services.

Derived from the above, in FRALLA we put ourselves at your disposal to carry out these services among which the following are incorporated:

1) Review of the operations to be concluded or concluded with the main suppliers, service providers in general in order to verify whether these operations would be within the scope of the Reform in terms of subcontracting.

2) Review or due diligence of suppliers that provide specialized services or carry out the execution of specialized works in order to verify the due fulfillment of the obligations established in the Reform in terms of subcontracting, which include the following:

1. Review of the contracts to be concluded with the aforementioned suppliers, particularly of the activities to be carried out, as well as the social objects of both the client and the suppliers;
2. Verification of registration in the Registry of Providers of Specialized Services and Specialized Works (REPSE);
3. Review and verification of the presentation of the notice to the local authorities of Mexico City on the occasion of the conclusion of subcontracting contracts (services or specialized works);
4. Review of the information that must be provided periodically by said suppliers to the client.

Finally, we reiterate our commitment in the provision of our services with the intention of avoiding risks or contingencies in terms of subcontracting, strictly adhering to the applicable legislation.

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August 2021

Mexico City, Mexico

[1] Decree amending, adding to and repealing various provisions of the Federal Labor Law; the Social Security Law; the Law on the Institute of the National Housing Fund for Workers; the Federal Tax Code; the Income Tax Law; the Value Added Tax Law; the Federal Law on Workers in the Service of the State,  Regulations of Section B) of Article 123 of the Constitution; of the Regulatory Law of Section XIII Bis of Section B,  of Article 123 of the Political Constitution of the United Mexican States, on Labor Subcontracting