On July 31st 2021 an amendment decree was published in the Official Gazette of the Federation (“DOF”) in terms of which several transitory articles derived from the reforms to (i) the Federal Labor Law, (ii) the Social Security Law, (iii) the Law of the Institute of the National Fund for Employees’ Housing, (iv) the Fiscal Code of the Federation, (v) the Income Tax Law, (vi) the Value Added Tax Law, among others, were modified and published in the DOF on April 23rd, 2021. These were published to grant an extraordinary extension for employers to carry out all required procedures to comply with provisions arising out of the new subcontracting regime.
The extraordinary extension was granted until September 1st, 2021 with the aim that during this period:
(i) the tax effects in terms of the aforementioned reform will not be lost (that is, the impossibility of deducting the Income Tax and crediting the Value Added Tax);
(ii) An asset transfer subject to the exploitation of the business will not be required to carry out an employer substitution process between the substituted employer and the substitute employer upon a transfer of employees;
(iii) Registration of individuals or legal entities may be carried out before the Registry of Providers of Specialized Services or Specialized Tasks from the Ministry of Labor and Social Welfare without penalty; and
(iv) Providers of specialized services or specialized tasks will have until the end of the extraordinary extension period to provide Social Security authorities the information from services agreements entered into between said provider of services or tasks and the beneficiary of such services.of services or tasks and the beneficiary of such services.
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