1.1. Subjects and activities that generate a PE
Article 64 of the LISH provides that a PE is created whenever ever a resident abroad for tax purposes carries on with activities under the LH in Mexican territory or the exclusive economic zone over which Mexico has jurisdiction.
Let us be reminded that pursuant to the provisions set forth in Article 27 of the CPEUM, the exclusive economic zone is that which spans to 200 nautical miles, from the base line from which territorial sea is measured.
We consider that the wording used in Article 64 of the LISH is extremely ambiguous, which in practice may lead to generate several interpretation conflicts.
Actually, the reference to carrying on with "activities under the LH" is so wide that carrying on with any of the activities set forth therein may (verbatim) create a PE; the same also goes for the reference to "whenever a resident abroad", without specifying the scope of such phrase, which implies that any resident abroad, such as a provider of goods and services, would create a PE.
Rule 10.10 of the RMF 2015 attempts to overcome this ambiguity, by establishing that "activities under the LH" are those mentioned in Article 2 of such Law, notwithstanding the quality of the resident abroad that carries on with them. Let us be reminded that the following are activities set forth in such provision:
Reconnaissance and superficial exploration, as well as the Exploration and Extraction of Hydrocarbons. Treatment, refining, sale, trade, transportation and storage of oil. Processing, compression, liquefaction, decompression and regasification, as well as transportation, storage, distribution, trade and sale of natural gas to the public. Transportation, storage, distribution, trade and sale of oil derivatives. Transportation of petro-chemical products through pipes, and pipe-related storage. 1.2. Time rule to create a PE
A time rule is set forth to create a PE, which consists in activities made by the resident abroad that are developed in a period that adds, in aggregate, more than 30 days in any given 12-month term.
During such term, activities that are made by the related party of a resident abroad, provided such activities are identical or similar, or constitute part of a same project must be considered.
Article 36 of the Regulations to the LISH provides that calculation of the days of duration of the above-mentioned activities shall be made considering all of the calendar days comprised between the beginning and termination of activities.
Rule 10.11 of the RMF 2015 provides that it shall be considered that activities continue to be carried on...
Energy Reform - Chapter VI: Implications On International Tax Matters
|Author:||Turanzas, Bravo & Ambrosi|
|Profession:||Turanzas, Bravo & Ambrosi|
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