Decree granting various tax benefits to those taxpayers located in areas affected by the severe rains and strong winds on October 24, 2023

11 / 01 / 23

Decree granting various tax benefits to those taxpayers located in the areas affected by the severe rains and strong winds on October 24, 2023

MEXICO CITY, MEXICO, November 1^st, 2023 – On October 30, 2023, the “DECREE granting various tax benefits to those taxpayers located in the areas affected by the severe rains and strong winds on October 24, 2023” (Decree) was published in the Federal Official Gazette. This Decree grants tax benefits to individuals or legal entities who have their fiscal domicile, branch, agency, or establishment in the affected areas, which include the municipalities of Acapulco de Juárez, Coyuca de Benítez, Benito Juárez, Atoyac de Álvarez, Técpan de Galeana, San Marcos, Florencio Villarreal, Petatlán, and Zihuatanejo de Azueta, all of them in the State of Guerrero.

The Decree grants some tax benefits for individuals and legal entities located in the affected areas. Amongst others, the notable tax benefits under the Decree include:

Immediate Deduction. Taxpayers are allowed to immediately deduct investments made in the affected areas consisting of new or used fixed assets acquired during the months of October to December 2023, provided that the acquired assets are used solely and permanently in said affected areas. This benefit doesn’t apply to the acquisition of automobiles, armored equipment, or aircraft.

VAT Refunds. Requests for the refund of VAT credit balances generated until December 2023, made by taxpayers with their fiscal domicile, branch, agency, or any other establishment in the affected areas from the date of the Decree’s publication until the mentioned month, will be processed within 20 business days, if the taxpayers don’t fall into the following scenarios:

Listed as issuers of false invoices under Article 69-B of the Federal Tax Code.
Used digital tax invoices issued by taxpayers listed under Article 69-B of the Federal Tax Code during the relevant months.
Had their digital seal certificates previously revoked by tax authorities.
Have been subject to revision by the tax authorities to verify the eligibility of the requested credit balance.

Withheld taxes and VAT. Individuals and legal entities who have withheld income tax on wages and salaries (excluding the assimilated to wages regime) of their employees providing services in the affected areas may pay those withheld taxes in three equal installments during the first three months of 2024 for those made in October, November, and December 2023. This situation will not give rise to interest, fines, or surcharges.

Individuals and legal entities conducting activities in the affected areas may make their final payments for VAT and Special Tax on Production and Services (IEPS) in three equal installments during the first three months of 2024 for those that correspond to October, November, and December 2023, without incurring interest, penalties, or surcharges.

Provisional Payments. In addition, taxpayers of income tax, either under the general regime, the simplified trust regime, or individuals engaged in business activities or who obtaing income from leases, are exempt from making provisional income tax payments for the months of October to December 2023.

The SMPS Legal team is at your service should you require further details on the Decree and need to assess its applicability in specific sectors for its potential implementation.