CONSIDERATIONS FOR THE CLOSING OF FISCAL YEAR 2020
The end of the year and therefore the close of the fiscal year is just around the corner, that is why we present some aspects that it is necessary to bear in mind to properly close the fiscal year 2020 and thus avoid setbacks at the time of calculate the income tax for the year and finally pay only the corresponding amount.
- Legal entities that carry out commercial activities (except construction companies) that receive advances without the good or service being delivered, must consider them as accumulative income for the year and in turn can deduct an estimated cost of sales, which is determined in accordance with the provisions of the Rule 3.2.4 of the RMF 2020.
- Advances made to suppliers for expenses (not purchases) are deductible in the year in which they are made, for which it is necessary to have a receipt of the advance in the year in which it is paid, and the receipt with tax requirements for the total of the operation, it must be obtained no later than in the following exercise.
- Art. 27 fraction VIII of the Income Tax Law establishes the requirement that payments that are both income from: individuals, partnerships and civil associations, legal entities that exercised the option to pay taxes based on cash flow, as well as taxpayers dedicated to motor transport through coordinated or primary activities and donations, must be effectively disbursed in the fiscal year to be deductible, so it is recommended to schedule your payment before the end of the fiscal year.
- In relation to the previous point, the expenses that are made with people other than those mentioned, will be deductible even when they are not paid at the end of the year, provided that they meet the other deductibility requirements and are recorded in the accounting, hence the importance of accounting for all expenses.
- Uncollectible accounts can be deducted when they prescribe or before, if their impossibility of collection is notorious, in accordance with and complying with the requirements provided in article 27, section XV of the Income Tax Law. Accounts receivable for amounts less than $ 5,000 can be deducted as uncollectible after one year without being collected, without additional requirements.
- At the close of fiscal year 2020, it is necessary to determine whether the exempt benefits paid to workers decreased compared to those granted in the previous fiscal year, in accordance with the procedure provided in Rule 18.104.22.168 of the RMF for 2020, which indicates the calculation of the following ratios:
If the result of 2020 is less than the result of 2019, it will be understood that there was a decrease in the benefits granted, in this case 53% of the payments that in turn are exempt income for workers will NOT be deductible, according to the fraction XXX of Article 28 of the Income Tax Law.
Otherwise, if the result of 2020 is greater than the result of 2019, it will be understood that there was no decrease in the benefits granted, therefore, 47% of the payments that in turn are exempt income for workers will NOT be deductible , according to section XXX of Article 28 of the Income Tax Law.
- In 2020 the immediate deduction of investments is not applicable.
- For 2020 the deductible limit for investments in conventional automobiles remains at $ 175,000 and for electric or hybrid cars (electric cars that also have an internal combustion engine or a hydrogen engine) the deductible limit is $ 250,0000.
- In relation to the previous point, expenses related to automobiles and other partially deductible investments, may only be deducted in the same proportion in which the automobile or investment in question is deductible. For example, when acquiring a car with a value of $ 350,000 this will be deductible by 50% ($ 175,000), and this proportion will apply to all relative expenses: fuel, maintenance, repairs, insurance, etc., which will also be deductible by 50 %.
- Donations are deductible up to 7% of the taxable profit obtained by the taxpayer in the fiscal year immediately prior to that in which the donation is granted. However, if the donations are granted to the Federation, the Federative Entities, the Municipalities, or their decentralized bodies, the deductible amount may not exceed 4% of the fiscal profit, without the total deduction exceeding the 7% mentioned, considering these donations and those made to authorized donees.
- Review the expenses incurred for services received, to find out whether or not there is an obligation to withhold VAT for 6% of the value of the consideration, when services are received in which personnel are made available to them and are used directly, in accordance with the provisions of section IV of article 1 -A of the VAT Law in relation to the section VI of article 27 of the Income Tax Law, this in order to minimize the risk of rejection of the deduction if the obligation to withhold and pay the VAT was not fulfilled.
- Detect possible operations with EFOS, for which it is recommended to review the publications made through the DOF and the SAT page, of the taxpayers who are allegedly involved in the invoicing of non-existent operations, to avoid the risk of rejection of deductions and VAT accreditation.