SAT Publishes New Tax Parameters for 12 Economic SectorsBy Cinthya Alaniz Salazar | Mon, 08/02/2021 - 17:07
Yesterday, Mexico’s Tax Administration Services (SAT) published its second income tax reference parameters corresponding with 84 economic activities for the fiscal years 2016 – 2019 to encourage voluntary compliance from big business.
The new guidelines are for the following economic activities: construction, temporary accommodation services, food and beverage preparation, manufacturing industries, business support services, waste management and remediation services, mining, transportation, postal services and warehousing, wholesale trade, retail, real estate and rental services, financial and insurance services, and finally professional, scientific and technical services related to electricity, water and gas supply.
SAT has provided these rates as part of its efforts to combat tax evasion efforts. The reference parameters are meant to be consulted by tax payers that seek to rectify their tax status. By filing the corresponding complementary annual returns, businesses effectively curb the possibility of initiating an extensive review of their tax obligations.
“With the aim of continuing to facilitate and encourage voluntary compliance, taxpayers are invited to consult the effective income tax rate corresponding to the economic activity to which they belong and compare it with their own effective tax rate,” said the collecting body.
Rates currently indicate that large contributors paid income tax rates lower than 9 percent. Considering that the maximum rate in Mexico is 35 percent, there seems to be a large discrepancy. Out of 84 economic activities, in 2019 the largest rate paid was 8.95 percent by fluorite mining companies, while the lowest was 1 percent by secondary copper lamination industries making an estimated MX$12 billion (US$602.7 million) in estimated annual revenue.
The SAT published the first income tax reference parameters in June 2021. These two guidelines represent a total of 124 income tax guidelines covering various industries. It is clear these publications are meant as a warning, but the agency has not mentioned by when compliance is expected nor how it intends to deal with tax evasions beyond the review process.