Mexico tax authority asks steel producers to rectify contributions

Mexico’s tax authority SAT urged a second group of large taxpayers in the mining and metal producing sectors, including steel companies, to voluntarily supplement their 2020 and 2021 tax contributions if the rates were lower than the authority’s effective ones.

"Those taxpayers whose effective rate is below the parameters published by the SAT have been contacted via the tax mailbox, so that they carry out their analysis and voluntarily correct their tax situation by submitting complementary annual returns," SAT said in a statement.

The publication of this second list of effective rates is part of the inspection actions detailed in the SAT 2023 master plan and includes eight other economic sectors. Last week, SAT published the effective rates for silver, gold, copper and nickel miners for both fiscal years.

Effective rates

The effective 2020 rate for steel complexes is 4.61% and 6.95% for 2021, and 4.17% and 3.67% for the wholesale trade of construction and mining machinery and equipment.

SAT reiterated that the measure will "minimize the possibility of initiating in-depth reviews aimed at corroborating the correct compliance with its tax obligations."

The authority defines a large taxpayer as an entity with declared annual income of over 1.5bn pesos (US$79.3mn).

The rates are established "based on the information available from SAT itself, such as that obtained in annual returns, tax reports, information on the tax situation of taxpayers, informative returns, digital tax receipts online, petitions, among others," according to the authority.

Guillermo Mendieta, audit and tax partner at the Mendieta & Cía. law firm, told BNamericas in a recent interview that those urged to review their tax situation do not necessarily have to adjust to the published effective rates, since they are an average or reference.

But Mendieta highlighted potential risks, since “if the authority has that idea nailed down, an audit falls on you and determines that the executed rate is below average, because they will create a tax credit for you and they will collect it.”

Among others, SAT release reference parameters for waste management and remediation services, construction, electricity, water and gas supply.

Mining chamber Camimex said in its 2022 sustainability report that the income tax contribution of the metallurgical mining industry was 24.2bn pesos in 2020 and 54.2bn pesos in 2021.