Extention for the application of the new CFDI “Payment Reception Complementary Receipt” and CFDI cancelation procedure coming in to efect on September 1, 2018.
Extension for the new “Payment Reception Complementary Receipt” (PRCD)
As stated in our prior tax alerts of August 2017, the Tax Administration Service (SAT) had announced two extensions for taxpayers to start using the new PRCD. The last announcement set September 1, 2018 as the new date. This means that starting on this new date the use of PRCD will be enforced. We remind our clients and friends that the PRCD will be required as part of the documentation to be able to take a deduction for purchases and expenses and also be able to take a credit of the value added tax (VAT) paid for these transactions.
Extension for the cancelation of the electronic Digital Tax Receipts (CFDI)
Also in addition to the above, the SAT included in this same extension the date in which the enforcement of the new procedure to cancel CFDI will be applicable. The date was also set to September 1, 2018.
Through this new scheme, this reform is intended to prevent CFDI issuers from canceling these electronic documents without the authorization of the recipient, which without this security mechanism, could cause problems in the deductions and crediting of the VAT paid.
For this, the recipients of the CFDI will receive a message through the tax mailbox indicating that they have a request from the issuer of the CFDI to cancel this electronic document. Recipient of the CFDI cancelation request will have 3 days to comply; otherwise, the issuer will be able to cancel the CFDI without the recipient authorization.
Additionally the SAT published a second option for the issuer of the CFDI to request the massive cancelation through the SAT Internet Portal. However, the rules to apply this second option are still pending to be published by the tax authorities.
New procedure to comply with obligations regarding labor subcontracting
Since 2017, the SAT published a new regulation which mandated that those taxpayers that subcontracted part of or all its labor, would have to comply with certain rules in order to be able to deduct the expense and credit the VAT paid.
These rules require the taxpayer to confirm that the subcontractors providing the labor service are in full compliance of all tax and Social Security regulations. This confirmation is done by accessing the electronic mail box of the subcontracting party and running a specific procedure. Once the procedure is complete, the system will provide a notice to the taxpayer that the subcontractor is in order and in compliance. The subcontractor will have to upload specific information to its mail box and provide the taxpayer (contracting party) a special access so he can complete this process. Failing to obtain the compliance certificate will prevent the taxpayer from deducting the expense and crediting the VAT paid.