The tax reform effective in 2014 includes a new obligation requiring the monthly filing of accounting information on electronic media pursuant to the general rules.
The general rules issued by the Tax Administration Service ("SAT"), establish the effective date to enter into force for the new obligation July 1st,2014.
Notwithstanding the above, on July 4, 2014 the SAT published on the Official Federal Gazette the second modification of the general rules, which established the obligation to file the electronic account.
These rules provide as follows:
- Taxpayers must keep their accounting records in electronic systems capable of generating files in XMLformat, with the following information: (i) chart of accounts,(ii) trial balance,(iii) journal entries.
- Taxpayers must submit their accounting records through the Tax Mailbox, as follows:
- The chart of accounts must be added with a group code of accounts issued by the SAT, and should be delivered no later than October, 2014 or whenever it is modified.
- The trial balance must be submitted for companies no later than the 25th day of the following month; and for individuals no later than 27th of the following month.Notwithstanding the above, a transitional provision provides that the trial balances from July to December 2014, must be filed within the following months: the July trial balance - on October; the August trial balance - on November; the September and October trial balance - on December; the November and December trial balance - on January 2015.
- The closing balance of the FY that includes the adjustments recorded must be filed by legal entities no later than April 20th of the immediately following tax year; and individuals must do so, no later than May 22 of the immediately following tax year.
- The journal entries must be submitted only if the SAT requires such information.
- The file structure must be in accordance with Annex 24, sections A, B, C and D of the general rules that are pending to be published on the Official Federal Gazette.
- For taxpayers located in areas without Internet service or where the Tax Mailbox is unavailable, the information is to be filed with the Local Taxpayer Services Administration corresponding to the taxpayer’s tax domicile, on electronic media such as compact discs, DVDs or flash memories.
- In case the files contain data errors, the SAT will send a notice through the Tax Mailbox, for the taxpayer to correct the situation in a period of three business days. If the requirement is not met, the information will be deemed unfiled. Also the taxpayer will be able to modify the information through the filing of new information.
- Special requirements apply to financial entities subject to oversight and regulation of the Ministry of Treasury (SHCP), with respect to the presentation of their chart of accounts.
Requirements for the balances and journal entries
- The trial balance and the journal entries must identify the taxes with their rates, including the tax charged effectively collected and the creditable tax effectively paid, and the activities that does not trigger taxes.
- The balance of the closing FY must include the information related with the adjustments duly recorded.
- The journal entries of the transactions must allow identifying the electronic tax invoices (CFDIs) that supports the operation, and also the taxpayer identification number of third parties.
Obligation to file electronic accounting.
- In case of a tax audit, tax refunds or offsetting, the SAT will be able to request to the taxpayers the journal entries and a copy of the filings of the chart of account and trial balances.
- During a tax audit procedure it is possible that the tax authorities request electronic journal entries of 2015 FY or subsequent years.
- Regarding tax refunds and offsetting, when the SAT request to the taxpayers information about journal entries related to the months of July to December, 2014, the filing date will be the one established for the trial balance of those months.
- In the case that the companies offset favorable balances, the taxpayers must submit in addition to the journal entries of the period offset, the information of the journal entries where the favorable balance where showed and generated, in case are originated on July 2014 or subsequent months.
In our view this new set of obligations represents a significant administrative burden for the companies, especially the obligation related to the journal entries of the commercial transactions related with the electronic tax invoices (CFDI's), in particular for those companies that are either subject to an audit or those which have generated value added tax favorable balances.
In this regard, there is a possibility to file an amparo action before the corresponding Courts; we consider that the amparo must be file no later than August, 12, 2014.
We consider that there are reasonable arguments in order to challenge the unconstitutionality of these new obligations.
As part of the legal strategy, it is possible to request that the application of these new obligations is suspended with the aim that companies are not required to submit this information during the litigation procedure.