We wish to inform you that in recent days two bills were introduced in order to extend the deadlines to facilitate compliance with the new labor, social security and tax obligations under the subcontracting Reform published in the Federal Official Gazette (DOF) on April 23, 2021 (Reform).
This reform bill responds to the express request of numerous companies and business chambers for a longer term that would allow them to complete the procedures aimed at regularizing their workforces, as well as registering their specialized services and works, among other matters relating to the restructurings that practically all companies must carry out. In this regard, this past Friday, July 30, in an extraordinary session, the Congress of the Union approved one of the bills extending the deadlines set forth in the transitory articles of the Reform, which was published on July 31 in the Federal Official Gazette. Accordingly, the deadlines were extended until September 1, 2021, on the following terms: 1. The tax amendments provided for in the Reform are extended until September 1, 2021. This means that payments made for the subcontracting of personnel and specialized services or the execution of specialized works of companies that do not yet hold the registration before the Ministry of Labor and Social Welfare in the so-called Registry of Providers of Specialized Services and Specialized Works (REPSE) may continue to be deducted (for Income Tax purposes) and credited (for Value Added Tax purposes). It should be noted that taxpayers must continue to withhold 6% of the value of the consideration actually paid in accordance with article 1-A of the Value Added Tax Law in order to be able to make such deduction. 2. Individuals or legal entities that provide specialized services or carry out specialized works and that, for this purpose, provide or make personnel available for the benefit of another party will have until September 1, 2021 to be registered before the REPSE. 3. With respect to employer substitution and until September 1, 2021, the transfer of the assets that are the object of the company or establishment to the substitute employer will not be necessary for the employer substitution to take effect. 4. Employers who, prior to the entry into force of this Decree, had requested the Mexican Social Security Institute to assign one or more employer registrations by class in order to register their workers nationwide, will have until September 1, 2021 to cancel them, as well as to request that the Institute grant them a new employer registration. 5. Individuals and legal entities that provide specialized services or carry out specialized works will have until September 1, 2021 to submit to the Mexican Social Security Institute the information relating to the contracts entered into during the relevant four-month period, obligations contained in article 15 A, sections I, II and III of the Social Security Law. 6. From the entry into force of the Reform and until September 1, 2021, the migration of workers from companies that operated under the labor subcontracting regime will be considered employer substitution (for purposes of the Social Security Law), provided that the company to which the workers are transferred recognizes their labor rights before the corresponding legal authorities. For more information regarding the Reform, you may consult this link. Likewise, you may consult the publication in the DOF here. We are at your service to resolve any questions regarding this Reform, which brings significant changes to the labor market in Mexico, and to support you in implementing action plans to comply with it. For additional information, contact: Rodolfo Trampe, Partner: +52 (55) 5258-1054 | rtrampe@vwys.com.mx Fernando Moreno, Partner: +52 (55) 5258-1008 | fmoreno@vwys.com.mx Alix Trimmer, Associate: +52 (55) 5258-1016 | atrimmer@vwys.com.mx Jorge Díaz Carvajal, Associate: +52 (55) 5258 1008 | jdiaz@vwys.com.mx Diego Benítez, Associate: +52 (55) 5258 1008 | dbenitez@vwys.com.mx Alejandro Pérez, Associate: +52 (55) 5258 1054 | alperez@vwys.com.mx Ricardo Rosas, Associate: +52 (55) 5258 1054 | rrosasg@vwys.com.mx
