Time quickly running out for businesses to apply for Mexican tax amnesty

Businesses that owe back taxes in Mexico have one week to apply for Mexico’s tax amnesty programme, which closes on May 31st.

Under Mexico’s FY 2013 Federal Revenue Law (Ley de Ingresos de la Federación Para el Ejercicio Fiscal), taxpayers can obtain forgiveness of some or all interest due and certain penalties when they settle tax liabilities that arose before December 31st 2012. For tax liabilities that arose before January 1st 2007, they can obtain forgiveness of 80% of the tax liability if they fulfil certain requirements. The amnesty applies to income tax, the business flat tax, the VAT, customs duties and certain fines for noncompliance.

While the 2013 Federal Revenue Law is in effect all year, Mexico’s tax agency, Servicio de Administración Tributaria, issued regulations in February setting a May 31st deadline (capitulo II.12.4). Taxpayers must apply for amnesty through the Servicio de Administración Tributaria’s website.

On the website, a taxpayer must identify which tax liability it wants considered for the amnesty programme, and if the taxpayer disagrees with the amount of tax identified on the website, it must use a prescribed procedure to challenge the amount. If the taxpayer agrees with the amount, the taxpayer confirms, under oath, that it has complied with the amnesty’s requirements and submits the request. Payment will due within a specified period.

Amounts forgiven under the amnesty are not considered taxable income.

—Alistair Nevius (anevius@aicpa.org) is editor-in-chief, tax for CGMA Magazine.