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Incorrect Transfer Of Tax Losses

Author:Mr Gerardo Nieto Martínez, Gil Alonso Zenteno, Rodolfo Barreda Alvarado and Alejandro Barrera
Profession:Basham, Ringe y Correa, S.C.

On June 1st, 2018, several amendments to the Federal Fiscal Code have been approved by the Federal Executive with respect to the transfer of tax losses. In this regard, a new anti-abuse rule regarding the transfer of tax losses was added to the Code in the context of business restructures.

In this scenario, the approved legislation establishes that where tax losses have been generated pursuant to certain regulated scenarios and the tax loss generating entity is part or a business restructure or change of shareholders in such a way that the entity entitled to offset said losses ceases to be part of the original group, then the right to offset such losses may be challenged by the tax authorities absent proof of non-tax related motives.

It is expected that the authority will notify electronically to the taxpayers who obtained the tax losses, in order to allow them to submit evidence to revert the observation of the authority.

Taxpayers who do not detract from the observations of the authority will be listed on the website of the Tax...

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