Tax Opinion and ISSIF: Obligations 2022

The relevant comments on the above are as follows:

1. Tax opinion

a) Taxpayers required to submit an opinion

Article 32-A of the CFF, from 2022 onward, states that legal entities that are taxed in Title II of the Income Tax Law (ISR) are required to issue an opinion by Registered Public Accountant (CPI) for their financial statements if:

• They recorded cumulative income for income tax purposes equal to or greater than $1,650,490,600.00 MXN in their normal returns for the immediately preceding fiscal year declared
• They placed shares among general investors in the stock exchange at the end of the immediately preceding fiscal year

The aforementioned article 32-A establishes that the taxpayers who are required to issue the opinion, as well as those who chose to do so, will have fulfilled the obligation to submit the ISSIF for fiscal year 2022 as part of the annual return for the year.

b) Taxpayers who may elect the tax opinion

As in previous years, there is still the possibility of auditing financial statements only for individuals with business activities and legal entities if either of these criteria is met:

• In the immediately preceding fiscal year they obtained accumulable income in excess of $140,315,940.00 MXN
• The value of their assets determined under the terms of the general rules issued for this purpose by the Tax Administration Service, is above $110,849,600.00 MXN
• At least 300 of their employees have provided services every month of the immediately preceding fiscal year

c) Deadlines for the submission of the tax opinion

• The deadline to submit the opinion of the financial statements issued by a CPI is May 15 of the year immediately following the end of the financial year in question
• The fine for failing to submit the opinion when required to do so, or for submitting it after the deadline, under articles 83, section X and 84, section IX of the CFF is $15,410.00 MXN to $154,050.00 MXN

d) New Obligations and Responsibilities of the Public Accountant who issues the opinion

The CPI has the obligation to inform the tax authorities if the taxpayer has incurred in any breach of tax and customs provisions or if the taxpayer has incurred in any conduct that may constitute the commission of a tax crime.

Starting on 2022, there are specific penalties for Public Accountants, if the tax authorities find, in the exercise of their powers, any omitted contributions (collected, withheld, transferred or from the taxpayer himself) that were not detected in their opinion.

The CPI will be punished for failing to report that the taxpayer incurred in a breach of the tax and customs provisions or in a conduct that leads to the commission of a tax crime.

The CPI shall be liable for the following violations related to their opinion:

• Suspension of their license to issue opinions on financial statements before the tax authorities for a period of 3 years, (suspension of their license as an auditor)
• If the CPI became aware of an act likely to constitute an offense without reporting it, the concealment shall be punishable with a prison term of three months to six years

No penalty shall be incurred when the omission does not exceed 10% of the contributions collected withheld or transferred or 15% in the case of the taxpayer's own contributions.

2. ISSIF 2022

A new section VI was added to Article 32-H of the CFF, and it indicates that taxpayers who are related parties of taxpayers required to submit an opinion on their financial statements will be required to submit ISSIF no later than March 31, 2023.

"Resolution Four of Amendments to the Miscellaneous Fiscal Resolution (RMF) for the financial year 2022" also added new provisions to rule 2.16.5, that establish the following:  

Taxpayers who fall within the provisions of the aforementioned section VI, shall submit the ISSIF if they have carried out the following transactions with their related parties who are obliged to submit an opinion on their financial statements:

• If the amount of the transaction exceeds $13,000,000.00 MXN for the performance of business activities
• Or, $3,000,000.00 MXN for professional services

In addition, they must consider the following:

• In the event of failing to submit the ISSIF or to do so in a timely manner (no later than March 31, 2023), the taxpayer may incur in a fine ranging between $15,410.00 and $154,050.00 MXN, under section XV of article 84 of the CFF
• For 2022, a fast-track option for taxpayers who were required to submit ISSIF for transactions carried out with residents abroad was eliminated, which consisted of filling in a simplified form, providing information only on certain sections that apply to them

Therefore, it is important to analyze your situation in order to be in time to foresee these new obligations before the end of this fiscal year. At Mazars we are ready to assist you with any questions or concerns you may have.