2024 Tax Resolutions: Changes in Fintech, Trust, and digital platforms

Repeal of the rule on the gain on stock certificates sale

Rule 3.1.12 is repealed. This allowed the gain derived from the sale of stock certificates that represented rights established by the Stock Market Law related to trusts dedicated to the acquisition or construction of real estate to receive the same treatment as said trusts.

Modification to the assumptions of business profit

Due to the repeal of Rule 3.1.12., it is deleted from Rule 2.1.13., which considered passive income the gain from the sale of fiduciary stock certificates of trust invested exclusively in a real estate Trust.

Assumptions that no business activity is carried out through trusts

As a result of the repeal of Rule 3.1.12., Rule 3.1.15. is modified to delete the gain on the sale of stock certificates issued by Trust from the income that is considered passive, in order to determine that no business activities are carried out through a trust.

Ease for Income Tax (ISR) withholding and payment by Fintech

In terms of interest income, the ease for withholding and paying Income Tax (ISR) on payments corresponding to interest related to financing operations carried out through Collective Financing Institutions (Fintech) is added. These must comply, in lieu of its clients, with the obligation to withhold and pay the corresponding ISR on the nominal interest paid to individuals and legal entities with non-profit purposes that provide resources for financing operations. It is now necessary to submit a clarification case through the Tax Administration Service (SAT) Portal where information on the interest paid is sent in accordance with the guidelines of the financial system obligations. 

Investment percentage of trusts dedicated to the acquisition or construction of real estate

As a result of the repeal of Rule 3.1.12, the last paragraph of Rule 3.21.2.4. is modified to delete the reference to the repealed rule. The modified paragraph allows the requirement regarding the minimum percentage of the trust’s assets invested in real estate to be met by each issue of participation certificates.

Ease for VAT withholding by Fintech

With regard to interest income derived from financing operations through Fintech, the ease with which the Value Added Tax (VAT) withholding and payment will be the responsibility of these entities arises. Fintech shall assume the obligations to withhold and pay said tax in lieu of their clients, making the withholding on the nominal value of the accrued interest paid to natural persons. Thus, said institutions shall have to comply with the tax obligations arising from this action.

VAT Withholding by digital intermediation platforms when payments are deposited in accounts abroad

Rule 12.2.10 is added. This clarifies the assumption of withholding for digital intermediation platforms where, if the amount collected by the digital platforms is deposited in accounts located abroad, 100% of the transferred VAT should be withheld. According to the requirements set out in the rule, it shall only apply when there are national residents with accounts abroad and the consideration collected through these intermediation platforms is deposited in said accounts.

One of the requirements that represent a great challenge for digital intermediation platforms is to obtain a statement from the suppliers informing them about the accounts abroad and their willingness to have 100% of the VAT withheld. However, this statement does not require complying with any formality, since it may be generated through the website, the application, the platform, or any other similar means.

Criterion 44/ISR/NV.Deduction of expenses for the provision of services

A non-binding criterion was added to Annex 3 to 2024 RMF. It mentions that the requirement of the strict indispensability of deductions may only be verified in operations with effective existence; that is, that the operation has materiality and is strictly indispensable for the taxpayer.

Therefore, the new criterion 44/ISR/NV establishes that expenses made for the provision of services, paid either by a person resident in Mexico or abroad, are not deductible if it is not proven that the service was actually received. This is because the tax authorities have detected that some taxpayers make expenses for alleged provision of services with the purpose of reducing the ISR taxable base, but although there are tax receipts for the provision of services, there is no materiality, that is, the necessary elements to support the transaction.

The following are considered improper tax practices:

1. Those who deduct, for income tax purposes, expenses for the provision of services without supporting information on the operation that proves the provision of the service.
2. Those who advise, counsel, or participate in the implementation of this improper practice.

Non-Binding Criterion 12/IVA/NV. Acquisition of goods in national territory owned by a resident abroad. VAT withholding

This non-binding criterion reinforces the regulations where the Authority establishes the obligation to retain VAT in cases where individuals or corporations acquire goods in national territory from a resident abroad who does not have a permanent establishment in the country, in accordance with Section III of Article 1A of the VAT Law (LIVA). Said withholding may be credited once it is paid, in accordance with Section VI of Article 6 of the LIVA.

Failure to comply with or incorrectly apply the provisions of the non-binding criterion shall be considered an improper practice. Therefore, tax advisors must guide their clients to establish solid processes that guarantee compliance with these withholding obligations. Failure to do so could result in taxpayers receiving penalties from the Authority.

Regulatory Criterion 40/IVA/N digital services. Definition of intermediation services for the purposes of the provisions of Article 18-B, Section II of the LIVA

Regulatory criterion 40/IVA/N is added, in which the concept of intermediation services is defined, since there is no definition of this concept in the current tax legislation. The definition set out in this criterion follows what was established from the beginning in the explanatory statement, so now it is clearly established that “digital platforms are considered to provide intermediation services when, in exchange for payment of a price or consideration, they offer or allow, through their website, their application or any other digital network, that their clients offer goods or services to third parties, and that said suppliers and demanders agree, through the digital platform, the conditions of said operations and the price or consideration thereof.”

The foregoing is true even when the same technological platforms state that they only establish an online store and that, in addition to selling goods or services of their own, they put other suppliers and demanders in contact. Likewise, when the technological platforms state that they do not intervene in the negotiation and that, therefore, they are not to be considered intermediaries, the concept of intermediation shall be applicable to them.

As a conclusion, any national or foreign resident who provides digital services through an internet page, application or any other digital network, where there are suppliers who agree or contract the price of goods and services with demanders, shall be considered as an intermediation service and all the obligations indicated in the current tax legislation must be fulfilled.

This second modification to the RMF has relevant changes that cover issues of international taxation, real estate trusts, withholdings in Fintech, deduction for the provision of services, as well as digital platforms for intermediation services. For this reason, the Forvis Mazars tax team is available to provide you with advice regarding compliance with tax regulations, in order to avoid any possible contingencies in the future.