Notice of Activities Suspension for Mexican Corporations

Is your corporation currently no longer operating and you want to avoid the unnecessary costs of complying with tax obligations? In this newsletter we will discuss that possibility.

Dear client and friend,

Is your corporation currently no longer operating and you want to avoid the unnecessary costs of complying with tax obligations? In this newsletter we will discuss that possibility.

After a long period of a prevailing violation of the principle of tax equity by our Tax Authority “SAT” that  did not consider (i) to include into the recent new Federal Fiscal Code Bylaws the Taxpayer Advocate Office Prodecon’s recommendation about allowing the companies (“personas morales”) to suspend their activities, and (ii) the opinion expressed in the isolated thesis of May 2013 by the First Appellate Court on Administrative Matters of the Sixth Circuit, finally last October 16th it was published in the Official Gazette the Rule RM I.2.5.26. of the Fifth Amendment to the Fiscal Miscellaneous Resolution RMF for 2014, in which it was established the option for companies to submit the fiscal “Notice of Activities Suspension”, which until then only individuals could submit.

Who can submit it?

Corporations who interrupt their economic activities and remain subject to comply with the submission of payment or informative tax returns periodically, without having further obligations of periodic payment returns generated from their own activities or on behalf of third parties. Main requisites to meet by the interested corporations are:

• Fiscal address status as “located”.
• Being up-do-date with their tax obligations.
• Not having fiscal credits, court sentences or pardoning debts with the tax authorities.
• Not being included into the SAT “black list” (simulation of transactions).
• Having the digital seal certificate status as “active”.

The application should be filed by using the SAT website through the Process Tab number 177 / CFF (Annex 1-A), during the following month to that in which the motivating legal situation takes place.

The annual tax return for the year in which the Activities Suspension is authorized must be submitted in March of the following year. It should be noted that the Activities Suspension is applicable only to the obligation of filing tax returns, so any other fiscal or legal liability must be accomplished in accordance with the taxpayer applicable fiscal regime.

The Activities Suspension will last for two years with a one-year extension, provided that prior to the respective expiration the new application is filed regarding the Tab above mentioned.

By the time the Activities Suspension term is terminated the taxpayer must file the “Activities Reactivation” notice or in case, the corresponding Cancelation notice of the Federal Taxpayer Registry “RFC”; otherwise, the authority will carry out an ex-officio reactivation.

What document is obtained?
A receipt with digital stamp of the “Service or Application” filed with the date and folio number.

Steps to perform the procedure on the INTERNET:

• Enter to Procedures section; capture the RFC number, login and password in “Mi Portal”
• Select the options consecutively “Online Services”: “Service or Application”, Application.
• Fill in the information requested by the electronic form and list the files with scanned documents.
• Send it to SAT, print and keep the electronic receipt.