MORAL PERSONS WITH NON-PROFIT PURPOSES

24/10/2020

ARTICLE 79. Legal Persons who are not taxpayers of income tax

This article is reformed in the following 3 points:

Incorporation to Title III of the organizations that group cooperatives

Section VIII of this article is amended to include as non-taxpayers of income tax, the cooperative integration and representation bodies referred to in the General Law of Cooperative Societies.

Authorization to receive deductible donations as a requirement to pay taxes in Title III

Sections XI, XVII, XIX and XX of article 79 are amended, incorporating for the companies or associations that are mentioned, the requirement of having authorization to receive deductible donations in order to be able to pay taxes in the legal person regime for non-profit purposes, for be as follows:

The following legal persons are not taxpayers of income tax:

XI. Non-profit civil societies or associations authorized to receive deductible donations under the terms of this Law, dedicated to scientific or technological research that are registered in the National Registry of Scientific and Technological Institutions.          

XVII. Associations or civil societies, organized non-profit and authorized to receive deductible donations in the terms of this Law, that grant scholarships, referred to in article 83 of this Law.

XIX. Societies or civil associations, organized non-profit and authorized to receive deductible donations in the terms of this Law, that are constituted and function exclusively for carrying out research activities or preservation of wild, terrestrial or within the geographical areas indicated by the SAT through general rules, as well as those that are constituted and function exclusively to promote the prevention and control of water, air and soil pollution, the protection of the environment and the preservation and restoration of ecological balance.          

XX. Non-profit associations and civil societies authorized to receive deductible donations in the terms of this Law, which prove that they are exclusively dedicated to the reproduction of species in protection and danger of extinction and to the conservation of their habitat, always that in addition to complying with the general rules issued by the SAT, a prior opinion is obtained from the Ministry of the Environment and Natural Resources.

Expenses without proof will be distributable remnant

Finally, the second paragraph of article 79 is amended to consider distributable remnant as the expenditures that they make and are not deductible under the terms of Title IV of this Law, andlimiting the caveat that allowed non-deductible expenses not to be considered as distributable remnant due to the fact that they were not covered with a tax receipt or paid through authorized forms of payment, in accordance with the provisions of section IV of article 147 of the Income Tax Law

In relation to these reforms, the Second Transitory Article establishes the following:

I. When, on the date of its entry into force, the legal entities mentioned in sections XI, XVII, XIX and XX of article 79 of the Income Tax Law, do not have authorization to receive deductible donations, from that date they must pay taxes. in the terms of Title II of the aforementioned Law. However, they must determine the distributable remainder generated as of December 31, 2020 in the terms of Title III of the Income Tax Law in force until this last date, and their partners and members will accumulate the remainder that said legal entities deliver them in cash or goods    

II. The reform to sections XI, XVII, XIX and XX of article 79 of the Income Tax Law will enter into force on July 1, 2021

ARTICLE 80. Income not related to the authorized activity

A last paragraph is added to this article, to establish that the legal entities and trusts authorized to receive deductible donations from income tax, that obtain income from activities other than the purposes for which they were authorized, in a percentage greater than 50% of the total of the income for the fiscal year will lose the corresponding authorization, which will be determined by resolution issued and notified by the fiscal authority. If, within the twelve months following the loss of authorization to receive deductible donations, said authorization is not obtained again, they must allocate all their assets to another donee authorized to receive deductible donations.

ARTICLE 82. Destination of the assets of the authorized donee

Sections IV, V and VI of article 82 are amended, which indicates the requirements that must be met the institutions to be considered as authorized to receive deductible donations, specifying the following:

IV. That the corporate purpose to which they must allocate all of their assets is the one for which they have been authorized to receive donations deductible from ISR         

V. Q In the 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 from ISR, who must issue the tax receipt for donation, which will not be deductible for purposes of ISR.

The donees referred to in the preceding paragraph will be taxed under the terms of Title II of the Income Tax Law.

The foregoing will also be applicable in the event of approval of the authorization cancellation request made by the authorized donee.

SAW. Is established the obligation to keep available to the general public the information related to the patrimony 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.

The donees who fail to comply with this obligation must rectify it within the month following the one in which the notification of the revocation took effect or the one in which the non-renewal of the authorization was published.

ARTICLE 82-Ter. Certification for donees (Repealed)

The “certification of compliance with tax obligations, transparency and social impact assessment” is eliminated for authorized donees, as well as the procedure for obtaining them.

ARTICLE 82-Quáter. Reasons for revocation of the authorization to receive deductible donations

Is added Article 82-Quáter to include within the Law the grounds for revocation of the authorization to receive deductible donations and the procedure that the SAT must follow for said revocation, which are provided for in Rules 3.10.15 and 3.10.16 of the RMF , according to the following:

TO.      The following are grounds for revocation of the authorization to receive deductible donations, which will start the revocation procedure:

I.    Allocate their assets for purposes other than the corporate purpose for which they obtained the corresponding authorization, in accordance with section I of article 82 of the Law.

II. Failure to issue the tax receipt that covers the donations received or issue tax receipts for deductible donations to cover any other operation other than the donation. 

1. When due to the exercise of the powers of verification or of the files, documents or databases of the SAT or those to which said body has access or has in its power, the update of any fact that constitutes breach of the obligations is known or requirements that establish the fiscal provisions in charge of the authorized donees.
2. Be included in the list referred to in the fourth paragraph of Article 69-B of the CFF
3.             If the legal representative (s), partners or associates or any member of the Board of Directors or Administration of a civil organization or trust whose authorization has been revoked within the last five years, are part of the civil organizations and trusts authorized to receive donations deductible during the term of the same.
4. To be in the assumption established in the last paragraph of article 80 of this Law, relative to obtaining income for activities other than those that were authorized to receive donations, in a percentage greater than 50% of their total income for the year.

Civil organizations and trusts whose authorization to receive deductible donations for ISR purposes has been revoked due to the causes referred to in sections I to V of this section, will not be able to obtain authorization again to receive deductible donations, until they correct the reason for which they were revoked or, where appropriate, pay the corresponding income tax.

In the case of the cause referred to in section VI of this section, they will not be able to obtain the authorization again and must allocate all their assets to another authorized donee to receive donations deductible from income tax.

B. The SAT will carry out the procedure of revocation of the authorization to receive deductible donations from the ISR according to the following:

I.    It will issue a letter through which it informs the authorized donee of the reason for revocation that is configured in accordance with the previous section, granting it a period of ten business days following the one in which the notification of said letter takes effect, so that declare before the tax authority what is convenient for you, providing documentation and information to distort it.

II.   Once the term referred to in the previous section has expired, the tax authority will issue the corresponding resolution within a term that will not exceed three months, counted from the day following that on which the referred term expired.

III. The resolution will be notified in accordance with the applicable tax provisions.

ARTICLE 84. Business school programs (Repealed)

The school-company programs are eliminated from the legal persons regime for non-profit purposes and as authorized donees.