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Mexico: Labor and tax law changes proposed regarding subcontracting of personnel

Mexico: Labor and tax law changes proposed

A proposal published on 19 November 2020 in the official record of the Chamber of Deputies would revise provisions of the labor and income tax laws.

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In particular, the measures would affect the treatment of subcontracting with regard to certain “specialized services” and would create a national registry for subcontracting companies. One aim would be a requirement for companies to verify compliance with certain labor and social security obligations.

The related income tax law changes would deny deductions for expenses paid with regard to subcontracting of personnel when the company does not have listed within its corporate purpose the provision of personnel subcontracting services.

The proposal is subject to congressional discussions and then approval by both chambers. Certain of the measures in this pending proposal are similar to an initiative presented earlier this month by the executive authority regarding companies that provide temporary or permanent personnel services. Read TaxNewsFlash

Read a November 2020 report (Spanish) prepared by the KPMG member firm in Mexico

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