Federal Government On April 5, 2020, the President of the Republic of the United Mexican States, Andrés Manuel López Obrador, announced the “Economic Recovery Plan,” through which microloans will be granted to small and family businesses. He also emphasized that existing taxes will not be increased and no new taxes will be created during the health contingency. Finally, he stated that Value Added Tax (“VAT”) refunds will be made with the promptness the situation warrants. Another measure the Federal Government will be implementing over the following nine months will consist of injecting resources into the energy sector. Because the “Economic Recovery Plan” leaves out a large number of Mexican companies, the Business Coordinating Council (“CCE”) will meet again with the President on April 15, 2020, to negotiate the granting of additional economic support and tax incentives needed to promote the recovery of the Mexican economy. State Governments Aguascalientes This past March 30, 2020, the government of the State of Aguascalientes announced the “All for Aguascalientes Program,” which will contemplate the following support and tax incentives: • Financing and subsidies for micro, small, and medium-sized enterprises of around 940 million pesos (mp). • Boost to local consumption of 74 mp. • Public works investment of 300 mp. • Business incentives: (i) 40% discount on the Entertainment Tax until the end of the year; (ii) Payment of the Payroll Tax for April–June is deferred to July–December 2020, with no inflation adjustments, surcharges, or fines; • At the municipal level, among other measures, an extension of the 10% discount on the payment of Property Tax accrued through May 31 will be granted. Nevertheless, the government of the State of Aguascalientes has not officially published its economic plan. Baja California To date, the government of the State of Baja California has not granted economic support or tax incentives to the business sector. Baja California Sur On March 23, 2020, the following economic support and/or tax incentives were published in the Official Bulletin of the State of Baja California Sur: • Payment of the Payroll Tax and Vehicle Registration accrued during the months of March through May 2020 is postponed (to be paid in August, October, and December 2020, respectively). • Audit actions are suspended until April 20, 2020. • In the municipality of Los Cabos, the following incentives are granted: (i) Payment of the Property Tax is extended by 3 months; (ii) Deadlines for renewals of ordinary business and alcohol licenses are extended; (iii) Demands for tax debts are suspended; (iv) Collection procedures by the tax enforcement area are suspended; (v) Urban planning inspection visits are suspended; (vi) Surcharges for failure to pay fees are waived through June 2020; and (vii) A 100% discount is granted on the issuance of cadastral keys and registration services through June 2020. Campeche To date, the government of the State of Campeche has not granted economic support and/or tax incentives to the business sector. Chiapas To date, the government of the State of Chiapas has not granted economic support and/or tax incentives to the business sector. Chihuahua On March 26, 2020, the government of the State of Chihuahua announced the granting of economic support and/or tax incentives for micro, medium, and small enterprises. However, to date no economic measures have been officially published. Mexico City This past March 27, 2020, the government of Mexico City announced an investment of 800 mp to support the economy of Mexican families and microenterprises. Among the measures contemplated is the payment of 200 mp to the Economic Development Fund in order to grant 50,000 microloans of $10,000.00 pesos each for microenterprises, at 0% interest, with a 4-month grace period and payable over 2 years. However, to date no other type of economic support and/or tax incentives has been officially published. Coahuila The government of the State of Coahuila is working on an economic program; however, to date, no type of economic support and/or tax incentives has been officially published. The Municipality of Saltillo, which is the state capital, announced the following measures in effect through June 30, 2020: (i) Suspension of audits or administrative visits. (ii) 5% discount on the Property Tax. (iii) 30% discount on the tax on the exercise of commercial activities, on cleaning services, waste collection, and public transportation service (taxi and bus renewals). (iv) 80% discount on the payment of fees for the issuance of licenses, permits, authorizations, and environmental control services, including vehicle inspection. (v) 40% discount on the total amount calculated for the tax on the occupation of public roads. (vi) 85% discount for the advance annual payment for 2020 on the total amount of proceeds from the lease of premises located in municipal markets. (vii) Charge of $1.00 for the collection of annual surcharges generated by waste collection, tax on the exercise of commercial activities, markets, traffic services, and matters related to establishments that sell alcoholic beverages. (viii) Temporary suspension of audit actions, as well as civil protection actions in low-risk activities. (ix) Suspension of audit actions, as well as civil protection actions in low-risk activities. (x) Full (100%) waiver of the municipal fees accrued as set forth in subsection a) of section I of article 31 of the Revenue Law of the Municipality of Saltillo for fiscal year 2020, corresponding to the cadastral fees arising from the review, calculation, and registration of subdivisions, lot divisions, re-lot divisions, and/or adjustments, as well as functions and subsidies on authorizations granted by the Municipal Directorate of Urban Development. Colima On March 19, 2020 and on March 30, 2020, the following economic support and tax incentives were published in the Official Gazette of the State of Colima: • Payment of the following taxes is extended until April 30, 2020, without surcharges: (i) Payroll Tax; (ii) Tax on the Provision of Lodging Services; (iii) Tax on the Exercise of Professions; (iv) Tax on Lotteries, Raffles, Draws, Contests, and Permitted Games; (v) Fee for the Extraction of Materials; (vi) Issuance, annual renewal, or replacement of the Vehicle Tax Sticker; and (vii) Ownership or Use of Vehicles. • From April to June, there will be a 100% waiver of the payment of the Tax on the Provision of Lodging Services. Durango On March 24, 2020, the following economic support and tax incentives were published in the Official Gazette of the State of Durango: • 50% exemption from the Payroll Tax. • Special incentive for micro, small, and medium-sized enterprises consisting of a waiver of up to 75% of the Payroll Tax for those that establish measures to facilitate goods and services to the public. • Extension of deadlines for payments under agreements for state taxes and/or fees for six months. • Application of a 5% discount on all state procedures. • Strengthening of financing programs operated by the Ministry of Economic Development. • Productive Public Investment to receive projects, applying a loan of 800 mp already approved by the State Congress. • The financing programs operated by the State Government will be strengthened, which together total 350 mp for micro, small, and medium-sized enterprises. • Public investments in the amount of 800 mp to reactivate the economy, with preference given to local companies in tenders. • Loans from $30,000.00 up to $50,000.00 to micro, small, and medium-sized enterprises. The economic policies just mentioned will be valid for up to 12 weeks from their publication, and beneficiaries must meet the requirements established by the authority. State of Mexico On March 26, 2020, the following economic support and tax incentives were published in the Official Gazette of the State of Mexico: • 50% discount on the Payroll Tax during the month of April for companies with up to 50 workers. • 200 mp for productive projects, zero-rate microloans with a four-month grace period. • Fund of 300 mp for lines of credit for the purpose of financing small and medium-sized enterprises. • 300 mp allocated to farm producers for the purchase of inputs, equipment, fertilizer, and baskets for self-consumption. Guanajuato The following support and tax incentives were published on the official website of the government of the State of Guanajuato as well as in the Official Gazette of the State: • Economic Boost Program in Response to the COVID-19 Contingency. • Payment of the Payroll Tax for the months of March and April is extended until July. • Support for workers with a Special Temporary Employment Program. • Innovative Credit Program for entrepreneurs, micro, small, medium, and large enterprises (800 mp). • Interest Reimbursement Program. Guerrero On March 31, 2020, the implementation of economic support and tax incentives was published in the Official Gazette of the State of Guerrero, and the following measures were published on the official website of the government of the State of Guerrero: • Tax on Remuneration 2% – 50% incentive in the months of March and April 2020, as well as an extension for the filing of monthly returns, to be filed and paid in the months of June and July 2020. • Lodging Tax 3% – 100% incentive in the months of March and April. • Suspension – during March and April – of the commencement of state tax audit actions on the economic sectors. • Extension of the validity period of the tax incentives for the Vehicle Ownership Tax and vehicle control fee for private and public transportation service until June 30, 2020. Hidalgo On March 26, 2020, the implementation of economic support and tax incentives was published in the Official Gazette of the State of Hidalgo: • 50% discount on the payment of the Payroll Tax during the March–April period for micro, small, and medium-sized enterprises. • 100% exemption from the Tax on the Provision of Lodging Services during the March–April period. • Suspension of scheduled audit actions on state contributions for Hidalgo companies until April 20, 2020. • Line of credit for micro, small, and medium-sized merchants. Payment extension of 3 months at 0% interest. Jalisco On March 25, 2020, the “Guidelines of the Jalisco COVID-19 Income Protection Plan” were published in the Official Gazette of the State of Jalisco regarding the implementation of the following economic support and tax incentives: • Emergency Plan for the Protection of Employment and People’s Income of 1,000 mp, divided into three subprograms: (i) 400 mp for people engaged in informal economic activities. (ii) 450 mp for micro and medium-sized enterprises. (iii) 150 mp to protect the income of corn producers. Michoacán The “Emergency Plan to Protect the Economy” was published on the official website of the government of the State of Michoacán, which involves: • 100% subsidy for the Payroll Tax during the March–May period, in the case of restaurants, hotels, spas, and travel agencies with up to 50 workers that do not make layoffs during the contingency. • Subsidy for the Lodging Tax, with those resources allocated to the Tourism Promotion Trust to reactivate the sector. • From April 1 to November 30, surcharges will be waived for late payment of vehicle fees such as: issuance of license plates, vehicle registration card, annual renewal, and annual renewal of public service concessions. • Payment of outstanding loans with SIFINANCIA will be extended for three months. • Creation of a Fund of 1,000 mp to grant loans to family businesses and micro and small enterprises. The amount of these loans will be $6,000.00; $50,000.00 and up to $250,000.00 pesos. They will be granted with grace periods, at 0% interest, or in some cases, at minimum interest. Morelos The Governor announced the State Plan to Support the Economy and Employment; this plan contemplates 300 mp, a resource directed to companies affected by the current situation. Affected companies may apply for loans at very low rates and even at a zero rate. Payment of the Payroll Tax corresponding to the months of March, April, and May was postponed until June 2020. Nayarit To date, the government of the State of Nayarit has not announced any relevant economic support or tax incentive for companies. Nuevo León The State of Nuevo León, through the Ministry of Economy, makes available the following benefits published in the Official Gazette of the State: • One-month exemption for companies from payment for water and sewage service. • Exemption from the Payroll Tax corresponding to the months of March, April, and May of fiscal year 2020 for companies with 1 to 10 employees and whose annual gross income level is less than 4 mp. • Exemption from the Payroll Tax during the months of March, April, and May 2020 for hotels, restaurants, casinos, movie theaters, bars, and social centers. • Loans for micro, small, and medium-sized enterprises of up to $1 million pesos, payable over 3 years. • Administrative visits were likewise postponed until April 20, 2020. Oaxaca On March 25, 2020, the granting of a 50% tax incentive for the second two-month period of 2020 with respect to the Payroll Tax was published in the Official Gazette of the Free and Sovereign State of Oaxaca, for companies that demonstrate, through their 2019 fiscal year tax returns, that their current income decreased during that same period by at least 50%. A possible extension of the incentive for subsequent two-month periods will be assessed depending on the evolution of the contingency. Likewise, a 100% incentive is established for the second two-month period on the Tax on the Provision of Lodging Services. Investment in infrastructure projects to reactivate the State’s economy. Puebla To date, the government of the State of Puebla has not announced any relevant economic support or tax incentive for companies. Querétaro To date, the government of the State of Querétaro has not announced any relevant economic support or tax incentive for companies. Quintana Roo This past March 24, 2020, the State of Quintana Roo published in the Official Gazette of that State the following tax benefits directed at the private sector: • Extension until October, November, and December 2020 to file returns and payments of the Payroll Tax, Lodging Tax, and Tax on the Extraction of Material from the Soil and Subsoil for the months of March, April, and May 2020. • Taxpayers who choose to file the returns and payment of said taxes in a timely and proper manner will receive a 20% subsidy. • The benefits will be granted provided that taxpayers are current in the fulfillment of their tax obligations and meet the following requirements: - Maintain the same average number of employees declared before the tax authority in the months of March, April, and May of last year, and - Submit a letter of commitment to the State Ministry of Labor and Social Welfare. • There will be no penalties, surcharges, or service suspension by the Drinking Water and Sewerage Commission for debts in March, April, and May. San Luis Potosí By means of a publication on April 1, 2020 in the Official Gazette of the State of San Luis Potosí and through an official announcement made by the Governor of the State, the following economic support and tax incentives are announced: • Extension of the deadline for payment of the Payroll Tax to July 15, 2020, for the months of March through June. • Companies with up to 50 employees are granted a 100% incentive on the Payroll Tax accrued in the months of March through June 2020, the purpose of which is for them to retain their workforce. • Suspension of audit and enforcement procedures for state contributions is applied until June 30. This implies no collection of final tax debts. • Labor inspection procedures are suspended until June 30. • $250,000,000.00 (two hundred fifty million pesos 00/100) are allocated for 25,000 women entrepreneurs who are heads of household and entrepreneurs of the social market economy. • $104,000,000.00 (one hundred four million pesos 00/100) are allocated for micro and small business owners. • $256,000,000.00 (two hundred fifty-six million pesos 00/100) are allocated for food-based social assistance. Sinaloa This past March 20, 2020, the government of the State of Sinaloa announced economic support in the form of loans through the “Fosin Emergente COVID-19” Network of the Business Financing Funds Unit of the Ministry of Economy of the Government of the State of Sinaloa. Sonora By means of Decrees published in the Official Gazette of the State of Sonora on March 25 and 26, 2020, a health emergency is declared in that state, adopting the following fiscal and economic measures relevant to companies: • A 50% discount is granted on the payment of payroll taxes for companies with 50 workers or fewer. • Provisional and temporary 100% suspension of the tax on lodging services. • The suspension of state audit actions is decreed during the months of April and May. Likewise, the Government of the State of Sonora will allocate a fund of 1,300 mp to support local companies. Tabasco To date, the government of the State of Tabasco has not announced any relevant economic support or tax incentive for companies. Tamaulipas The state government announced a plan of tax and economic incentives for business owners on account of COVID-19, which is pending publication. Tlaxcala To date, the government of the State of Tlaxcala has not announced any relevant economic support or tax incentive for companies. Veracruz This past March 30, the governor of the State of Veracruz presented the Agreement for Economic Reactivation with the purpose of supporting the state’s economy. The relevant aspects of that agreement concerning private-sector companies are the following: • Deferral of the payment of the Payroll Tax accrued during the March/April 2020 two-month period, only for micro, small, and medium-sized enterprises with a workforce of no more than 50 workers, deferred to be paid between July and December 2020, and conditioned upon not making unjustified layoffs. • Suspension of state tax and administrative reviews until June 30, 2020. Yucatán Pursuant to a publication on March 30 in the Official Gazette of the State of Yucatán, the state government establishes the following actions to address the economic situation: Regarding the Payroll Tax collected during the months of March and April 2020: • 50% financial incentive. • The remaining 50% of the tax may be paid no later than December 10, 2020. • The tax return for the months of March and April may be filed before December 10, 2020. • The tax returns for withholdings made during the months of January, February, and March 2020 may be filed no later than June 10, 2020. • The tax returns for withholdings made during the months of April and May 2020 may be filed no later than July 13 and August 10, respectively. Regarding the Lodging Tax collected during the months of March, April, May, and June 2020: • There is a 100% financial incentive. • The tax return for the months of March, April, May, and June 2020 may be filed no later than December 10, 2020. Other economic measures: • The tax return for the Scheduled Tax on Income associated with Commercial Activities for March and April 2020 may be filed no later than December 17, 2020. • There will be a 100% financial incentive on the tax applied to professional services collected during the months of March and April 2020. In addition, the tax return for said months may be filed no later than December 10, 2020. • The deadline to file the 2019 return for the Scheduled Tax on income associated with commercial activities is extended until July 13, 2020. • The returns for the Tax on the Transfer of Real Estate collected in March and April 2020 may be filed within the 60 business days following the date of disposition or signing of the deed, as the case may be. • The tax returns for Lotteries, Raffles, Draws, and Contests collected in March and April 2020 may be filed no later than July 10 and August 10, 2020. • The tax returns for expenditures on games and contests collected in March and April 2020 may be filed before July 10 and August 10, 2020. • The tax returns for pawnshops collected in March and April 2020 may be filed no later than July 17 and August 17, 2020. • The tax returns on the sales of alcoholic beverages received in March and April 2020 may be filed no later than July 17 and August 17, 2020. Zacatecas This past March 23, the Governor of the State of Zacatecas announced a package of economic and fiscal measures intended to support the State’s economy in addressing the national emergency situation. Some of the measures contemplated that benefit private-sector companies are the following: • 100% waiver of the Payroll Tax for companies with fewer than 20 workers. • 50% reduction of the Payroll Tax for companies with 21 to 40 workers. • 30% reduction for companies with more than 40 workers. • 100% waiver of the Tax on Lodging Services generated during April and May. • Discounts of 10%, 20%, and 30% for the Infrastructure Tax. Likewise, the following economic support is contemplated: • Existing loans: from April to June, no principal will be paid, only interest, while the latter is lowered to 5%. As for restructurings over 60 months, during the first 6 months only 5% interest will be paid from April to June; from July to September the contracted interest will be paid, and starting in the 7th month the contracted interest and principal will be paid. • New loans: companies with up to 10 employees will be granted up to 125 thousand pesos over 36 months at a fixed annual rate of 5%, where for the first 4 months they will pay nothing (grace period), while in the 5th and 6th months they will pay only interest; starting in the 7th month they will pay interest and principal, with no opening commission. Companies with more than 10 employees will be granted up to 500 thousand pesos over 36 months at a rate of 7%, where for the first four months only 5% interest will be paid, and starting in the 5th month 7% interest and principal will be paid. For additional information, contact our experts: Rupert Hüttler, Partner: +52 (55) 5258 1038 | rhuettler@vwys.com.mx Anna Maria Brandstädter, Associate: +52 (55) 5258 1038 | abrandstadter@vwys.com.mx José Miguel Reséndiz, Associate: +52 (55) 5258 1038 | jresendiz@vwys.com.mx
