On June 13, 2021, the Tax Administration Service (SAT) released through its website the first reference parameters regarding effective income tax rates for the measurement of tax risks corresponding to forty economic activities[1] for fiscal years from 2016 to 2019 on the register of large taxpayers.

According to the statement, the parameters disclosed were made based on the information provided in the institutional databases that contain annual returns, tax reports, information on the tax situation of taxpayers, informative returns, tax receipts, etc.

Likewise, the tax authorities indicate that in order to facilitate and encourage compliance, taxpayers are invited to consult the effective tax rate corresponding to the economic activity to which they belong and compare it with the effective rate of each fiscal year for measure your tax risks and, where appropriate, correct your tax situation by filing the corresponding complementary annual returns to minimize the possibility of in-depth reviews aimed at corroborating the correct compliance with your tax obligations.

According to the first parameters, if the effective rate calculated by the taxpayer in each year is higher than the industry’s effective rate calculated by the tax authority, there is a lower tax risk. On the contrary, if the taxpayer’s calculated effective rate is less than the parameter, the tax risk is greater.

Said publication is made as a result of the reforms to the tax provisions due to the economic package for the year 2021, by means of which subsection i) of section I of article 33 of the Tax Code of the Federation was added, which establishes that the authorities Taxpayers for the best fulfillment of their powers will provide free assistance to taxpayers and citizens, trying to make known periodically and in general for taxpayers of income tax, parameters of reference with respect to the utility, deductible concepts or effective rates of tax presented by other entities or legal figures that obtain income, compensation or profit margins for the performance of their activities based on the economic sector or industry to which they belong, establishing that the dissemination of said information will be done with the purpose of measuring tax risks. The SAT under the protection of voluntary compliance programs may inform the taxpayer, their legal representative and in the case of legal entities, their management bodies, when it detects cases of risk based on the parameters previously indicated, without considering that the tax authorities initiate the exercise of their powers of verification and without these programs being binding.

Next, we put at your disposal the link where you can consult the publication in comment in more detail.

http://omawww.sat.gob.mx/TasasEfectivasISR/Paginas/index.html

It should be noted that on this page the tax authorities also made known certain frequently asked questions in relation to the publication of the parameters.

Finally, in order to determine the tax risk that could exist for our clients, we are at your disposal in order to review the calculation of the effective income tax rate for the years 2016 to 2019 and, where appropriate, take the pertinent measures under the new control policy of the current tax authorities.

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June 2021

Mexico City

[1] The 40 economic activities are part of five economic sectors: mining, manufacturing, wholesale trade, retail trade, and financial and insurance services, including the automotive and pharmaceutical industries. Said economic activities are those referred to in Annex 6 of the Miscellaneous Tax Resolution.