Income Tax Law (ISR)

22/9/2020

Reforms are mainly proposed in relation to the requirements that authorized donees must meet, in accordance with the following:

• Eliminate the School-Company Programs as authorized donees, since there are no current authorizations in this area, by eliminating articles 27, section I, subsection f), 84 and 151, section III, subsection f)
• Establish that in the case of the following legal entities: societies or associations that grant scholarships; those that are dedicated to scientific or technological research; to the investigation and preservation of wild flora and fauna; as well as the reproduction of endangered species, they must have authorization to receive donations to be able to pay taxes in Title III as non-profit legal entities, the above through the reform of sections XI, XVII, XIX and XX of the Article 79.
• Eliminate the facility that allowed non-deductible expenses not to be considered as distributable remnants for the reason that they were not covered by a tax receipt (modification of the second paragraph of article 79).
• Incorporate an assumption that indicates that donees who obtain income from activities other than the purposes for which they were authorized to receive donations, in a percentage greater than 50% of the total income for the fiscal year, they will lose the corresponding authorization (addition of an eighth paragraph to article 80).
• Specify that in cases of revocation of the authorization or when its validity has concluded and it has not been obtained again or renewed within the following twelve months, the former grantee must allocate all of her assets to other entities authorized to receive donations deductible and not simply certify that the donations received were used for the purposes of its corporate purpose. In addition, establish that the donees who lose their authorization will be taxed under the terms of Title II of the Income Tax Law (amendment to section V of article 82).
• Incorporate the obligation to keep available to the general public the information related to the assets of the authorized donees, together with the information corresponding to the authorization to receive donations and the use and destination that has been given to the donations received, as well as to establish that donees who fail to comply with this obligation must correct it within the month following the month in which the notification of revocation took effect or in which the non-renewal of the authorization was published (amendment to section VI of article 82).
• Eliminate the “certification of compliance with fiscal obligations, transparency and social impact assessment for authorized donees”, which was never carried out because there are no certifying entities (elimination of article 82-Ter).

Include within the text of the Law by adding article 82-Quáter, the grounds for revocation of the authorization to receive deductible donations and the procedure that the SAT must follow for said revocation, which are currently provided for in Rules 3.10.15 and 3.10.16 of the RMF for 2020.