Global Tax Alert (News from Americas Tax Center) | 11 July 2014

Mexican tax authorities issue rules for electronically filing accounting records

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On 4 July 2014, Mexican tax authorities published in the Federal Official Gazette the Second Amendment to the Temporary Tax Regulations, which contains the tax reporting requirements for accounting information. Under these rules, the requirement to file accounting information monthly with tax authorities is effective beginning July 2014.

Background

As part of the 2014 Mexican tax reform, the Federal Tax Code (FTC) included a requirement for taxpayers to file accounting information with the tax authorities on a monthly basis. Until now, however, the extent of this filing requirement was not known, as there was no description of what needed to be filed.

Electronic accounting requirements

Fraction III of article 28 of the FTC requires taxpayers to maintain electronic accounting records, as applicable, in electronic devices pursuant to the regulations issued by the tax authorities. According to rule I.2.8.6., taxpayers must maintain accounting records through electronic systems that can create XML format files, which include the following:

1. Chart of accounts used during the period. The chart of accounts must include a field to include account groupings, as defined by the tax authorities in Annex 24 of the Temporary Regulations.

2. Trial balance, with initial balances, movement for the period and final balances for each of the accounts of the taxpayer, including assets, liabilities, equity and results of operations (revenue, costs and expenses). For final year-end balances, information on recorded tax adjustments should be included.

The tax accounts should be identified along with, when applicable, the different rates, quotas and activities for which no tax is due, as well as transferred taxes and creditable taxes. Guidance for these accounts is provided in Annex 24 of the Temporary Regulations.

3. Information related to journal entries in the accounting records. This should include details for each transaction, such as account, subaccount, sub-ledger and information related to electronic invoices, as well as identifies the different tax rates, quotas and activities for which no tax is due.

How to file

To satisfy the filing requirement, taxpayers must submit their files electronically by uploading their electronic files through their electronic mailbox.

Filing requirements

This newly enacted amendment to the Temporary Regulations establishes, among others, the type of electronic accounting records that taxpayers must file with Mexican tax authorities. Under rule I.2.8.7., taxpayers must electronically file, on a monthly basis, the trial balance information referenced in item 2 above. For companies, the filing deadline for each month is the 25th day of the following month (e.g., 25 August 2015, for July 2015’s information, 25 September 2015, for August 2015’s information). For individuals, the filing deadline for each month is the 27th day of the following month.

The end of the tax year information, along with the corresponding tax adjustments for each tax year, is due for companies by 20 April of the following tax year (e.g., 20 April 2015 for the 2014 tax year and 20 April 2016 for the 2015 tax year). For individuals, the filing deadline for each tax year is 22 May of the following tax year.

Taxpayers must submit the chart of accounts as described in item 1 above with the first monthly filing each year (e.g., for 2015, filed with the January 2015 submission in February 2015). Any changes to the chart of accounts will also have to be filed.

Information related to the journal entries described above (item 3 of rule I.2.8.6) would have to be provided to the Mexican tax authorities upon request as part of an audit or review of the tax returns or a review of a refund or compensation of favorable tax balances. In addition, as part of a review or audit, a tax refund or compensation process, the tax authorities may also ask the taxpayer to provide some additional items related to the journal entries referenced in item 3, such as links to the electronic invoices.

In the event that the taxpayer’s electronic files contain information errors, the tax authorities will notify the taxpayer by email. The taxpayer will have three business days to refile the correct information. If the taxpayer fails to correct the errors identified in the notice within the three-day period, the tax authorities will treat the information as not filed. Taxpayers that amend their previously filed information should send the new files within three business days of the modification.

Extended filing deadlines for 2014 reporting periods

The new rules extend the filing deadlines for monthly submissions of the 2014 trial balances as follows (for corporate taxpayers):

Reporting period

Due date

July

October 2014

August

November 2014

September

December 2014

October

December 2015

November

January 2015

December

January 2015

Similarly, taxpayers must upload the initial chart of accounts by 31 October 2014.

These extended due dates also apply to reviews by tax authorities as part of a tax refund or compensation process. Notably, tax authorities may only request a taxpayer’s detailed journal entries for tax periods commencing in 2015.

Beginning January 2015, taxpayers must upload the electronic trial balance through the tax mailbox in the month immediately following the month for which the trial balance is prepared.

For additional information with respect to this Alert, please contact the following:

Mancera, S.C., Mexico City
  • Oscar Ortiz
    +52 55 5283 1468
    oscar.ortiz@mx.ey.com
  • Koen van´t Hek
    +52 55 1101 6439
    koen.van-t-hek@mx.ey.com
  • Hector Gama
    +52 55 1101 6436
    hector.gama@mx.ey.com
Ernst & Young LLP, Latin American Business Center, New York
  • Alfredo Alvarez
    +1 212 773 5936
    alfredo.alvarez@ey.com
  • Enrique Perez Grovas
    +1 212 773 1594
    enrique.perezgrovas@ey.com
  • Ricardo Vargas
    +1 212 773 2771
    ricardo.vargas@ey.com
Ernst & Young LLP, Latin American Business Center, Miami
  • Terri Grosselin
    +1 305 415 1344
    terri.grosselin@ey.com
  • Edwin Solano Leiva
    +1 305 415 1526
    edwin.solanoleiva@ey.com
Ernst & Young LLP, Latin American Business Center, Houston
  • Oscar Lopez-Velarde Perez
    +1 713 750 4810
    oscar.lopezvelardeperez@ey.com

EYG no. CM4566