Mexico subcontracting reform - deadline extended

Last July 31st, 2021, the Chamber of Deputies passed a one month extension to the effective date of the changes derived from the labor reform on matters of outsourcing.

This term for both outsourcing companies and specialized companies that can meet the requirements established by the reform published last April 23^rd, expires on September 1^st this year, and therefore they will have an additional month for the transition to these changes to employment.

With the publication of this administrative facility, employers, in terms of the Federal Labor Law and the Social Security Law, may continue with the outsourcing processes, such as:

Obtaining their Specialized Service or Specialized Works Provider Registration (REPSE) for companies that provide specialized outsourcing services or execute specialized works, as well as companies that provide complementary services or works to companies from the same business group.
For companies that provide personnel, the transference of such personnel by means of employer substitution to the companies that benefit from the services, without transferring their assets.
For personnel provider companies, the employer registrations must be cancelled according to class.
Quarterly notices must be filed, as well as the information about the contracts made with the beneficiary companies of the specialized services or works that are underway.
Migration of workers by means of employer substitution, as long as employment rights are respected, such as seniority and work risk premiums, to mentioned just a couple.

In the field of taxes, it is important to remember those documents that as of September 1^st will form part of accounts for the purpose of deductions for Income Tax, as well as for crediting Value Added Tax.

Law	Document
Federal Labor Law	Entry in the Public Register of Specialized Services or Specialized Works Contractors, issued by the Ministry of Labor and Social Welfare. Contract of the Specialized Services company.
Social Security Law	Worker-Employer and INFONAVIT contributions. Receipt of Payment.
Federal Tax Code	· Online Digital Tax Receipt (CFDI) of the workers’ payroll, who have participated in the work or service.
Income Tax Law	Provisional Payment Tax Return for the Income Tax withholding obligation for wages and salaries. Registration code Receipt of Payment.
Value Added Tax Law	Provisional Payment Tax Return for the VAT obligation. Registration code Receipt of Payment.

What happens to the 6% VAT withholding?

With the extension published last July 31^st in the Federal Official Gazette, the obligation to obtain Specialized Service or Specialized Works Provider Registration (REPSE) for companies that provide specialized services outsourcing services or execute specialized works, as well as companies that provide complementary services or works between companies in the same business group, expires on September 1^st, and therefore the term for the withholding of 6% of VAT is extended to September 1^st.

For more information, please contact us.