Issue 155 - September - October 2021

September 21, 2021

México and the U.S. Relaunch High-Level Economic Dialogue

By Iván Castañeda

On September 9, high level representatives from Mexico and the United States, including Vice President Kamala Harris, several Department Heads and Ambassadors, relaunched High-Level Economic Dialogue (“HLED”), a dialogue mechanism implemented in 2013 during the administrations of Presidents Enrique Peña Nieto and Barack Obama. Attendees of the HLED discussed several important topics for both nations, including labor, immigration, automotive, energy and compliance with the USMCA. The relaunched HLED will focus on four central pillars: Joint reconstruction. The purpose of this pillar is to strengthen existing and new supply chains and facilitate trade and infrastructure development in order to mitigate supply chain disruptions. Promoting sustainable economic and social development in southern Mexico and Central America. Both nations will identify opportunities to … read more

September 23, 2021

Mexican Tax Authorities Issue “Invitation Letters” to Taxpayers Regarding Alleged Discrepancies in Reporting Expense Deductions

By Rene Cacheaux, Miriam Name, and Esteban Gómez Aguado

Mexican tax authorities are sending notices to taxpayers inviting them to review and, if necessary, correct their tax filings (“Invitation Letters”). The Invitation Letters identify alleged discrepancies between amounts taxpayers claimed as authorized deductions and the expense and invoicing information they provided to support such deductions. It is important to review the Invitation Letter carefully because Mexico’s tax regulations provide for several legitimate deductions that do not necessarily tie into an Internet Digital Tax Invoice (“CFDI” for its acronym in Spanish). For example, investment deductions, annual adjustments for inflation, and exchange losses, among others, fall into this category. Legitimate discrepancies may also exist when a CFDI has been issued, but the deduction is filed for a different time period, such … read more

New Requirements for Providers of Registered Specialized Services or Registered Specialized Work
By Pablo Saénz and Fernanda Magallanes

In accordance with the recent amendment to Mexico’s Federal Labor Law in regard to outsourcing, entities or individuals who obtain a Specialized Service Provider or Specialized Work Registration (“REPSE” for its acronym in Spanish) must refrain from performing any work related to the principal business activity of the beneficiary of such services or work. They must also comply with the obligations established in Mexico’s Federal Labor Law, Social Security Law, National Institute for Employees Housing Fund Law, Income Tax Law (ISR), Value Added Tax Law (IVA), and any other applicable law, as well as any general REPSE rules set forth in article 15 of the Federal Labor Law. The primary obligations of providers of specialized services or work include: i) … read more

Forming a Company in the United States
By Carrie Osman

Determining the appropriate corporate structure for a U.S. entity with international owners involves factors such as limiting liability, tax considerations and often specific requirements for U.S. immigration and visa needs. A planning phase is advisable for foreign parties, which planning involves the participation of U.S. corporate counsel, accountants and fiscals advisors from both the U.S. and their home country, as well as their U.S. immigration counsel, if applicable. Decisions on choice of entity, ownership structure and place of formation can significantly impact international tax consequences and the company’s future. Below is an overview of some of the main considerations in forming a U.S. entity.    1. Choice of Jurisdiction.  In the U.S., company formations are governed by state law, and … read more