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Mexico: Labor subcontracting arrangements; labor and tax information requirements

Mexico: Labor subcontracting arrangements

Taxpayers involved in labor subcontracting agreements must obtain certain labor and tax information from the contractor.


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The “First Resolution of Amendments to the Miscellaneous Fiscal Resolution for 2019” (Primera Resolución de Modificaciones a la Resolución Miscelánea Fiscal para 2019) and the related annex 1 and annex 1-A were published 20 August 2019 in the official gazette, and provide rules with respect to labor subcontracting obligations.

In general, under this rule (effective 1 August 2019), taxpayers must obtain directly from a contractor involved in a labor subcontracting agreement certain information about social contributions, tax returns, and tax withholding with respect to the workers; and payments of worker-employer fees or value added tax (VAT) returns. The rule addresses compliance with the labor subcontracting obligations established under Mexico’s income tax law and VAT law for purposes of deductibility and accreditation.

Given the new rule, taxpayers may need to consider reviewing information required under their labor subcontracting arrangements.

Read an August 2019 report (Spanish) prepared by the KPMG member firm in Mexico

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