1. The tax
2. Subjects tax
3. Use or enjoyment of goods.
4. Income Tax.
5. Fixed assets, expenses and deferred charges
1. The tax
Taxes are benefits, now usually in money, the State and other public entities, that they claim, by virtue of its coercive power, in the form and amount determined unilaterally and without special consideration to the needs collective.
The tax is a compulsory tax provision, whose budget is in fact not an activity referred to state and forced to cover government expenditures.
The tax is providing cash or in kind made by the State under the law, a mandatory basis by individuals and corporations to cover government spending and without any consideration or benefit for them special, direct and immediate.
The first element involved in a relationship is the subject tax. The subject is of two kinds, one active and one passive subject.
Within the organization of the Mexican state, the active subjects are: the Federation, local authorities and municipalities.
They are active subjects because it has the right to demand payment of taxes, but not all have the same amplitude, the Federation and the Entities, except those constitutional limitations to be discussed in due course, can set the taxes required to cover their budgets; however, the municipality only has the power to raise them.
Considering the difference explained we can say that the Federation and local authorities have full fiscal sovereignty. Municipalities have subordinate tax sovereignty.
Taxpayer is the person who is legally obliged to pay tax
Value Added Tax.
The value added tax, is part of the sales tax affects the consumer through manufacturers and merchants. Because the value-added tax levied on income apparently industrial and merchant, when in fact it is taxed consumer spending.
The State believes that whatever gains the party to get to their business, there is the benefit derived from the particular state action aimed at the provision of public services and which must be paid in order to sustain the cost these utilities demand.
This means that by the action of the state, including two kinds of benefits derived: one which is represented by the use it can make of the services the government provides and the other by the gain that can be derived from the activity carried out within the legal world in which he moves, within the limits and under the protection of the State.
The Value Added Tax abrogates or replaced, among others, the federal tax on business income, whose main shortcoming was that it caused “cascade”, ie, to be paid at each stage of production and marketing, that determined in all increased costs and prices, whose cumulative effects increase, ultimately affecting end users.
The VAT eliminated the harmful results of federal business income tax, it destroys the cumulative effect cascade and the influence it exerts on the general price levels.
VAT is not levied or intended to tax business income, which is taxed overall value, real and definitive of each product through taxation for different partial values of each producer, manufacturer, wholesaler, retailer is adding to Article at each stage of the negotiation of the goods, both in the industrial cycle and commercially, are producers of wealth and should be therefore subject to this type of tax.
The VAT, however they also paid in each of the stages of production, no cumulative effects because each industrial or merchant to receive payment of the tax to their customers move, recover that he had passed his providers, and only delivers the State the difference, in this way, the system does not allow the tax paid at each stage influences the cost of goods and services, and to get them to the final consumer are not hidden in the price no charge tax.
The VAT in Mexico, is an indirect tax that is paid as a person who has not only the right but the obligation to transfer, so that in the end the consumer pays. Type is real because the taxable event does not take into account the personal circumstances of taxpayers, but only the nature of economic transactions.
2. Subjects tax
We understand such to those individuals and companies legally obliged to pay that tax.
According to the Law on Value Added Tax in its article 1, are required to pay the value added tax that individuals and corporations in national territory, perform the acts or activities:
* Sale of goods.
* Provision of independent services.
* Granting the use or enjoyment of goods.
* Imported goods or services.
Transfer means any transfer of ownership of property, except to be made because of death or amalgamation.
The grant is considered taxable disposition, if done business for which the donation is not deductible for income tax purposes.
The sale in which the seller retains ownership of the thing sold since the conclusion of the contract, even if subsequently operate transfer, or fail to take place.
The awards, even when conducted in favor of the creditor.
The contribution to a company or association.
Which is done by leasing
No tax is payable on the sale of the following goods
* The soil
* Building attached to the ground, intended or used for household. Where only part of the property used for residences, not pay tax on that part. The hotels are not included in this fraction.
* Books, newspapers and magazines as well as the right to exploit a work, to perform its author.
* Personal property used, except sold by companies.
* Tickets and other vouchers that allow participation in lotteries, raffles, or games of chance and contests and prizes respective referred to the Income Tax Law.
* Local and foreign currencies as well as gold or silver and have had such character pieces called “troy ounce”.
* Gold Ingots with a minimum of 99% of the material, provided the sale takes place in retail sales to the general public.
It is considered on the sale in any of the following circumstances:
* From the moment you send or deliver the property to the buyer.
* Since the partially or fully pay the price of good.
* From the time of issue of the document under which the sale.
They are considered independent services:
* The delivery obligations do you make a person in favor of another, regardless of the act that gives origin and the name or classification given to that measure other laws.
* The transport of goods or persons.
* Insurance, consolidation and refinancing.
* The mandate of the committee, mediation, agency, representation, brokerage, consignment and distribution of.
* Technical assistance and technology transfer.
* Any other obligation to give, to do or not to allow, assumed by a person on behalf of another, provided it is not regarded by the law as sale or use or enjoyment of goods.
No tax is paid for the provision of the following services:
* The Federation provided directly by the City., States and municipalities that do not match their public law functions.
* The public institutions provided by social security.
* Commissions and covering considerations credited to your creditor to mark the granting of mortgage loans.
* The fees charged by Afores manage their resources.
* The free services.
* Education services.
* Public transport ground people, except rail.
* International shipping of goods paid by foreign residents without a permanent establishment in the country.
* The maquila of flour or dough, corn or wheat.
* The pasteurization of milk.
* The insurance against agricultural risks and life insurance, either covering the risk of death or grant or pension annuities and agent commissions corresponding to the aforementioned insurance.
* Financial derivative transactions.
* Services provided to its members, political parties, associations, coalitions, unions, chambers of commerce, employers’ associations and professional associations.
* The public entertainment for the ticket. Not considered public entertainment provided at the restaurants, bars, nightclubs, ballrooms and dance or nightclubs.
3. Use or enjoyment of goods.
Means use or enjoyment of goods on lease, usufruct and any other act, regardless of the legal form that is used for this purpose, which allows a person to use or enjoy other tangible temporarily in exchange for a fee.
No tax is payable in the following cases:
* Buildings designed or used exclusively for household. If a property hath several uses, the proportional to s household tax is payable.
* Farms for agricultural or livestock.
* Tangible whose enjoyment is granted by foreign residents without a permanent establishment in the country.
* Books, newspapers and magazines.
Imports of goods.
The law considers importing goods:
* The introduction of foreign goods into the country.
* The acquisition by persons resident in the country of tangible goods sold by non-residents in it.
* The use or enjoyment, in Mexico, of intangible assets provided by persons not living in it.
* The use or enjoyment in the national territory of the services referred to in the previous topic, when supplied by non-residents in the country. This fraction is not applicable to international transport.
* Those that do not yet consummated, are temporary, with the return character or temporarily exported goods are the subject of transit or transhipment.
* The baggage and household goods referred to in the Customs Code.
* Real donated by overseas residents to the Federation, states, municipalities according to the general rules established for this purpose by the Secretary of Finance and Public Credit.
Exports of goods and services.
Companies resident in the country will pay the tax on the sale of goods or services when one or the other exported at the rate of 0%.
* The sale of intangible assets by persons residing in the country who resides abroad.
* The use or enjoyment, abroad, of intangible assets provided by persons residing in the country.
* The use abroad of services provided by residents of the country in respect of: a) technical assistance, b) export maquila operations, c) advertising, d) and mediation committees, e) insurance and reinsurance, f) operations financing.
* The international transportation of goods provided by residents in the country.
* The air transportation of persons, provided by the resident in the country for the service is not considered paid in the country.
The exporter may choose from the crediting or refund of amounts paid on goods or services exported even in the case of exempt items, or when companies resident in the exporting country to dispose of tangible property, or of extending the use or enjoyment abroad.
Obligations of taxpayers
Taxpayers are required to keep accounts of its operations, separating those taxable and exempt and which do not lead to accreditation.
Issuing documents proving the value of hiring agreed, expressly stating separately the value added tax that is transferred. These documents must be delivered to the customer within fifteen calendar days after the operation.
A file returns, taxpayers who have several establishments must file a single statement.
Give vouchers which he goes the VAT separately.
The commission made its separation from other accounting records.
VAT is included in the price, when dealing with the general public.
It must be kept in each establishment, copies of pay statements.
Issuing certificates due to withholdings.
4. Income Tax.
Is called rent, the product of capital, labor or combination of capital and labor. Indistinguishable for gross income tax purposes, which is the total income earned without any deduction, as for example when a tax is levied on income from work or from capital in the form of interest. Sometimes free income is taxed when it is after deducting necessary expenses income ara obtaining income, it also allows the deduction of certain expenses subject’s particular tax.
The individuals and corporations must pay income tax on:
* Residents of Mexico on their income.
* Foreign residents who have a permanent establishment or a fixed base in the country, with respect to income attributable to that establishment or base. Likewise those whose income from sources within the country and who do not have a permanent establishment as it exists, that revenues are not attributable to them.
It is referred to anywhere business which engaged in business activities (branches, agencies, offices, workshops, installations, mines, instead of exploration, development or extraction of natural resources).
Income from a business establishment.
They are from the business developed, and fees from those derived from the provision of independent personal service.
Also from the sale of goods or real estate in Spain.
Moral as Personal Income Tax Law.
Corporations are considered commercial companies, decentralized organizations with business, credit institutions, societies and associations.
The companies will pay for income tax calculated by applying 35% to the taxable profit earned during the year (Art. 10 ISR).
* You get the tax profit decline of the total taxable income earned in the year, the deductions allowed by law
* A tax earnings for the year will decrease the tax loss carryforwards of other exercises.
Partial exemption be granted to corporations devoted exclusively to agriculture, livestock, forestry and fishing provided their income in the period not exceeding 20 high general minimum wages annually.
This exemption shall not exceed entirely of 200 times the minimum wage.
Also do not pay income tax on their products:
* Unions ejidos.
* Social Enterprises.
* Associations rural collective interest.
* Industrial agricultural unit of rural women.
* Colonies farming and ranching.
Activities with tax cuts:
Tax reduction will be granted in the following cases and percentages:
* 50% dedicated to agriculture, livestock, fisheries and forestry.
* 25% if those taxpayers industrialize their products.
* 25% if carried on business in which they have a maximum of 50% of their income.
* 50% if it is engaged in book publishing.
Taxpayers of this type are those whose income representes activities at least 90% of its total revenue.
The companies accrue all income in cash, property, services, credits to obtain any other during the year, including those from their establishments abroad.
Is the income derived by the taxpayer real decrease their debts.
Other taxable income.
Are considered taxable income as follows:
* Income determined by the SHCP.
* Income in kind. – The difference between the investment have not deduced, updated as the law and the value under the appraisal made by a person authorized by the SHCP has on the date of transfer of property by payment in kind .
* Difference between livestock inventories in case. – The difference between the final and initial inventories of a year, when the final inventory is the biggest case of taxpayers engaged in farming.
* Benefit passing improvements to the lessor. – The coming of buildings, facilities or improvements to property, according to the contracts that were awarded by the use or enjoyment are to benefit the owner.
* Gain on disposal of assets, securities, merger, division, etc..
* Recovery Payments deducted for bad credit.
* Recovery insurance, bonds. Etcetera.
* Income from insurance compensation of key man. – Amounts that taxpayers get as compensation to compensate him for the decrease in productivity caused death, injury or illness of technicians or leaders.
* Interest and inflationary gain.
Taxpayers may make the following deductions:
* Returns, discounts or rebates. – Even if made in subsequent years.
* Acquisition of goods and raw materials, semi-finished or finished products that use to serve, to make goods to sell them, with diminished returns, discounts and allowances made them even in subsequent years.
* Difference inventories in the case of livestock.
* Bad debts and losses by accident.
* Contributions to funds for technology and training (Art. 27).
* Creation of reserves for pension funds, pensions, and so on.
* Interest and inflation loss.
* Advances and pay yields of production cooperatives and advances to deliver the societies and associations to their members.
5. Fixed assets, deferred charges and expenses.
Investments are considered fixed assets, deferred charges and expenses.
Tangible set using taxpayers for the conduct of its activities and to invalidate the exercise by the use of taxpayer service and over time. The acquisition or manufacture of these goods have always intended to use them for the development of the activities of the taxpayer, and not to be sold in the normal course of its operations.
They are represented by intangible assets or property rights to reduce operating costs or improve quality or acceptance of a product, for a limited period, less than the duration of the activity of the firm. Also considered intangible assets Deferred expenses for the exploitation of public property or the provision of a public service concession.
Those who meet the requirements outlined in the previous paragraph. Except those relating to the exploitation of public property or the provision of a public service concession, but whose benefit is for an unlimited period will depend on the duration of activity of the firm.
Obligations of corporations.
* Carry accounting.
* Issue receipts for transactions.
* Formulate financial statements and conducting inventories.
* Present annual statement.
* Keep records of transactions in securities issued in series value.
* Retain supporting documentation.
Pagan ISR persons residing in Mexico.
The living abroad with business or providing independent personal services in the country.
* Non-wage benefits and overtime.
* Compensation for risk or disease.
* Retirement, pensions and retirement assets.
* Reimbursement of medical, dental, hospital and funeral.
* Provision of social security and social welfare.
* Delivery of deposit to Infonavit or social security institutes.
* Banks and Savings of workers.
* Fee IMSS.
* Seniority premiums, retirement and severance (SMG x 90 times each year of service).
* Gratuities, holiday bonuses and profit sharing (15 times SMG).
* Remuneration received by foreigners.
* Representation expenses and per diem.
* Revenue frozen.
* Disposal of household whenever it is proved to have inhabited the last two years prior to the sale.
* Agriculture, livestock, forestry and fishing (20 times a year SMG).
* Interest paid by credit institutions provided that they are incurred by savings deposits an amount not to exceed the equivalent of twice the highest SMG year.
* Interest received by international lending institutions.
* Interest on bonds issued by the Federal Government.
* Interests arising from insurance institutions.
* Inheritance or bequest.
* Donations (3 times annual SMG).
Income from salary (Subordinate Service Person).
Table of withholdings for income.
Obligation of subjects.
* Provide data for inclusion in the RFC.
* Ask for the retention of records of taxes.
* Present annual statement.
* Communicate in writing when two or more labor to employers.
* Hold the ISR.
* Calculate the annual tax.
* Provide workers records no later than January 31.
* Request records where the employee worked for other patterns.
* Request the worker report having worked for another employer.
* Submit annual return for wages paid.
* Request information workers to enroll at RFC.
Work submitted by
Juan Carlos Vides Hurtado
Tlalnepantla Institute of Technology.