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  • Writer's pictureGabriela Rojas | C.P.C | Abogado Fiscal | L.D

Outsourcing in Mexico: An obstacle of efficiency?

Updated: May 27, 2022


In the business circle, subcontracting services has become a tool of great efficiency in the production chain; having an expert ally, responsible for legal, fiscal, and administrative matters, has helped companies fulfill their obligations efficiently. However, the new structural reform prohibits “the outsourcing,” and it has been the focus of attention at the business level due to the high costs, times, and restructurings that will require new implementations.


The prohibition of the outsourcing of personnel in Mexico is an issue that has acquired a special concern and uncertainty due to the changes in various laws on labor, tax, and social security, mainly.


Undoubtedly, this prohibition affects many corporations and microenterprises that for years have used outsourcing in their production chain of goods and services, subcontracting personnel services for the fulfillment of one or more of their activities.


This structural reform entered into force last April in labor matters; however, the changes in social security and fiscal issues are still pending mandatory compliance.


While it is true that the deadlines and new rules of the reform are legally published, in recent days, the media has warned that Congress intends to hold an extraordinary session with the purpose of “rectifying” the content of these regulations; because of multiple questions to these regulations expressed by experts in the field.


This reform allows the subcontracting of specialized services or works, when the following conditions are met:

  1. Although it does not clarify the nature or characteristics of these services, it does establish that they cannot and should not be included in the corporate purpose or the main activity of the person requesting them.

  2. When the service provider makes its workers available to the customer and.

  3. That the provider is registered in the new portal of specialized service providers.

To facilitate the analysis of the subcontracting of specialized services or works, the following are a series of elements that must be complied with to evaluate the type of relationship contracted and whether such contracting would be prohibited.


In the business circle, subcontracting services has become a tool of great efficiency in the production chain; having an expert ally, responsible for legal, fiscal, and administrative matters has helped companies to fulfill their obligations efficiently. However, the new structural reform prohibits “the outsourcing” and it has been the focus of attention at the business level due to the high costs, times, and restructurings that will require new implementations.


The prohibition of the outsourcing of personnel in Mexico is an issue that has acquired a special concern and uncertainty due to the changes in various laws on labor, tax, and social security, mainly.


Undoubtedly, this prohibition affects many corporations and microenterprises that for years have used outsourcing in their production chain of goods and services, subcontracting personnel services for the fulfillment of one or more of their activities.


This structural reform entered into force last April in labor matters, however, the changes in social security and fiscal issues are still pending mandatory compliance.


While it is true that the deadlines and new rules of the reform are legally published, in recent days the media has warned that Congress intends to hold an extraordinary session with the purpose of “rectifying” the content of these regulations, because of multiple questions to these regulations expressed by experts in the field.


This reform, allows the subcontracting of specialized services or works, when the following conditions are met:

  1. Although it does not clarify the nature or characteristics of these services, it does establish that they cannot and should not be included in the corporate purpose or the main activity of the person requesting them.

  2. When the service provider makes its workers available to the customer and;

  3. That the provider is registered in the new portal of specialized service providers.

To facilite the analysis of the subcontracting of specialized services or works, the following are a series of elements that must be complied with evaluate the type of relationship contracted and whether such contracting would be prohibited.

As we have mentioned, we must first analyze the situation that prevails among the client-supplier to corroborate if there is a subcontracting of personnel (which would be illegal) or a subcontracting of services and specialized works.


Critical to say that for tax purposes a series of additional requirements must be met by the client and the supplier, to avoid that these expenses are considered as non-deductible and/or the imposition of numerous fines.


Several of our clients have asked us to review their specific situation and to establish a “compliance” procedure with the aim of protecting their assets. If your activity considers that you could be affected, need to define the specific situation, or determine the impact of these new mandatory reform, contact us and one of our attorneys will provide you with personalized advice.

 

Published on September 09th, 2021.


“In terms of article 89 of the Fiscal Code of the Federation in force, the content of this reproduction, exhibition, presentation, program, or transmission and/or the documents and/or examples used to expose it, may express positions that do not coincide with the criteria of the Mexican tax or judicial authorities. This reproduction or exhibition is not intended and may not be used by any person for the purpose of circumventing (i) a federal, local, or municipal tax, or (ii) the imposition of tax penalties in the United Mexican States.


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