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Deduct taxes with specialized services

TAx the new labor regulation establishes different parameters for the subcontracting of personnel and payroll administration. Such changes establish new measures to manage the payment of taxes for these concepts, leading users of these services to update themselves. The most frequently asked question is how taxes can be deducted under this new model. Here we give you the answer.

Yes it is possible to deduct taxes with the new law

In their declaration before the SAT, companies can only deduct expenses for those concepts that are strictly essential for business activity, this in accordance with article 27 of the Income tax relief service Law (LISR) that in the reform, establishes that 

as well as the payment of contributions to the Institute of the National Housing Fund for Workers. The contractor will be obliged to deliver to the contracting party the vouchers and the information referred to in this paragraph.

Outsourced services must be specialized. The Federal Labor Law contemplates three types of subcontracting: specialized services, execution of specialized works and complementary services or works provided between the same group only when the contracting is not part of its corporate purpose or its main economic activity. 

In other words, the subcontracting of personnel for activities that are the same as those of the personnel contracted for the corporate purpose of the company cannot be done. 

For this, the subcontracting process establishes the obligation that there be a formalization through a written contract indicating the services or works to be provided and the approximate number of workers that will participate under this scheme. 

In order to provide subcontracted services, supplier companies are required to have the respective registration with the Ministry of Labor and Social Welfare. They must be registered in a public register, available on the Internet and must renew their registration every three years. To renew it, they will be required to be audited. Those companies that do not have the registry or prevent the audit, may receive fines of 250 to 5 thousand Units of Measurement and Update

Therefore, as established by the SAT, payroll administration is classified as a specialized service, as long as this activity is not part of the company’s corporate purpose and since they are essential services for business activity, they are tax deductible .

Requirements for the ISR deduction

However, in order to apply the Income Tax (ISR) deduction, it is mandatory to comply with the legal requirements established by the SAT, such as the payment of full salaries, the affiliation to the IMSS of workers, and compliance with legal benefits.

In this regard, the reform establishes that the contracting company, to deduct the payments made to the contractor must: 

  • Verify that the contractor has the registration referred to in article 15 of the Federal Labor Law (registration in the register)
  • Copy of tax receipts for payment of workers’ salaries
  • Copy of the payment receipt issued by a banking institution for the full declaration of the tax withholdings made to the workers
  • Copy of the payment of the worker-employer contributions to the IMSS
  • Copy of payment of contributions to INFONAVIT

It will not be possible to make ISR deductions in the following cases established in article 15-D of the Federal Code of the Federation: 

  • Payments made for the concept of subcontracting personnel to carry out activities related to the corporate purpose and predominant economic activity of the contracting party.
  • Payments in the case of the provision of personnel to the contractor when:
    • the workers were originally employed by the contractor and have been transferred to the contractor
    • the workers cover the main activities of the contractor

Requirements for VAT deduction

The withholding of 6% VAT for subcontracted services is no longer possible. To do so, it is necessary to demonstrate that the VAT was transferred to the taxpayer and must be recorded separately in tax receipts. In order to transfer the VAT to specialized services, verification is required that the contractor is registered in the register of the Ministry of Labor and Social Welfare and the VAT declaration, with acknowledgment of receipt corresponding to the period in which this was made. a payment that was transferred to you. 

The notification must be made on the last day of the fiscal period. In the event that the contractor is unable to do so, he will have to submit a supplementary statement where he formalizes the concepts for this action. 

In conclusion, it is important that clients who contract a payroll administration service or specialized services know that they can deduct their expenses and obtain tax benefits by opting for this contracting scheme.

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