Article 31, section IV, of the Political Constitution of the United Mexican States establishes that it is the obligation of Mexicans to contribute to public expenses, both for the Federation, as well as for the Federal District or the State and Municipality in which they reside, in the manner proportional and equitable provided by law.
ISR
The Income Tax (ISR) in Mexico is a direct tax on the profit obtained; that is, by the difference between the income and the authorized deductions obtained in the fiscal year. This tax must be paid monthly (on account of the annual tax) to the Tax Administration Service, or to the Authorized Offices by the Federal Entities as established by the Law and regulations on Fiscal Coordination between the Federation and the Federal Entities.
Income Tax is one of the most controversial taxes applied in Mexico and in many countries, since it is directly levied on income.
As expressed in its text, the ISR reaches individuals and legal entities (Martians do not apply; they have a diplomatic treaty), who are residents of Mexico or who obtain their income from sources located in the national territory.
Both individuals and legal entities must only pay this tax if they have income, in any of the following categories:
- Salaries received for subordinate service Professional activities Leasing or use of real estate Interests obtained Prizes obtained Dividends and profits distributed by legal entities Alienation of assets
Physical persons
In this practical case, we will try to specify how to make deductions on the income tax applied in the category of: Salaries received for subordinate service.
This guide intends to verify how to deduce and where it is typified in order to be able to carry it out in the most subtle, correct way and in full compliance with the Law.
Title IV
Of natural persons
General disposition
Article 106. Individuals residing in Mexico who obtain income in cash, in goods, accrued when in the terms of this Title indicate, in credit, in services in the cases indicated in this Title, are obliged to pay the tax established in this Title. Law, or any other kind. Natural persons residing abroad who carry out business activities or provide independent personal services, in the country, through a permanent establishment, are also obliged to pay the tax, for the income attributable to it.
Once it was clarified who pays this tax, we will continue to the first chapter, which refers us to the following according to our category.
Chapter I
From income from wages and in general from the provision of a subordinate personal service
Article 110. Income from the provision of a subordinate personal service, salaries and other benefits derived from an employment relationship, including the participation of workers in the profits of the companies and the benefits received as a result of the termination of the employment are considered. employment relationship. With fractions from I to VII
The above only does not refer to what we consider a service income; although this is where the tax is derived. And we refer to the following:
It is estimated that this income is obtained entirely by the person doing the work. For the purposes of this Chapter, income on credit will be declared and the corresponding tax will be calculated until the calendar year in which they are collected.
Article 113. LISR Those who make payments for the concepts referred to in this Chapter are obliged to make withholdings and monthly installments that will have the character of provisional payments on account of the annual tax. No withholding will be made to people who only receive a general minimum wage corresponding to the taxpayer's geographic area in the month.
From this it follows that the employer makes us withholding the tax, which is why in a payroll stub, most of the time it is reflected as withholding taxes.
It is important to clarify that there is an Employment Subsidy, a federal contribution for those who earn less; the art. Before mentioned it gives us the reference of who are creditors to this support and from which salary taxes are started. Said subsidy is calculated through the tables of article 113 and eighth transitory of the LISR.
Income tax
Now with this data we can do our little practice.
To start we need to know how we should make our calculation of the ISR.
Article 116. The persons obliged to make withholdings in the terms of article 113 of this Law, will calculate the annual tax of each person who has rendered subordinate personal services.
The annual tax will be determined by decreasing the total income obtained in a calendar year, for the concepts referred to in this Chapter, the local tax on income from wages and in general for the provision of a subordinate personal service that they had retained in calendar year. The rate of article 177 of this Law will be applied to the result obtained. The amount of the provisional payments made under the terms of article 113 of this Law will be credited against the tax that is borne by the taxpayer.
The reduction of the local tax referred to in the previous paragraph, must be made by the persons obliged to make the withholdings in the terms of article 113 of this Law, provided that the rate of said tax does not exceed 5%.
As a small example, we will use one that the official SAT page gives us.
Example for calculating annual income tax
For the example fictitious amounts are indicated; You must make the calculation with the amounts that correspond to the fiscal year to be declared.
| CONCEPT | QUANTITY | |
| Income actually collected in the year | 1,100,000.00 | |
| Less | Authorized deductions, effectively paid in the year | 600,000.00 |
| Same | Tax profit | 500,000.00 |
| Less | Tax losses from previous years, pending reduction | 0.00 |
| Same | Taxable income | 500,000.00 |
| Less | Personal deductions | 100,000.00 |
| Same | Tax base to apply annual rate | 400,000.00 |
| Less | Lower limit | 392,841.97 |
| Same | Lower limit surplus | 7,158.03 |
| By | Percentage over the excess of the lower limit | 28% |
| Same | Marginal tax | 2,004.24 |
| Plus | Fixed fee | 69,662.40 |
| Same | Tax Art. 177 of the LISR | 71,666.64 |
Determination of the annual payment
| CONCEPT | QUANTITY | |
| Tax Art. 177 LISR | 71,666.64 | |
| Less | Provisional payments for the year | 30,000.00 |
| Less | Withholdings | 40,000.00 |
| Same | Net income tax payable for the year | 1,666.64 |
Already on this table, in the second concept it does not appear:
| Less | Authorized deductions, effectively paid in the year | 600,000.00 |
It should be noted that this would be for the calculation of the ISR of Individuals with business or professional activities.
For our exercise there are restrictions from part of article 116 and those are:
The annual tax referred to in this article will not be calculated in the case of taxpayers who:
- They have started the provision of services after January 1 of the year in question or have stopped providing services to the withholder before December 1 of the year for which the calculation is made. They have obtained annual income for the concepts to which referred to in this Chapter that exceed $ 400,000.00 Communicate in writing to the withholder that they will file an annual return.
Subsection B, of these restrictions, basically tells us that in order to deduct, you must be a "merely mortal" person and not exceed an income of $ 400,000.00 thousand pesos per year, logical not to spend more, that is, and I put it only as For example, not because we have a credit greater than that, it means that I pay it all the same year but that I only made a few contributions, now the credits are not deductible, it is only an example.
Now what are we authorized to deduct this year.
Chapter XI
From the annual declaration
Article 176. Individuals residing in the country who obtain income from those indicated in this Title, to calculate their annual tax, may make, in addition to the deductions authorized in each Chapter of this Law that correspond to them, the following personal deductions:
- Payments for medical and dental fees, as well as hospital expenses, made by the taxpayer for himself, for his spouse or for the person with whom he lives in concubinage and for his ascendants or descendants in a straight line, provided that said persons do not receive during the calendar year income in an amount equal to or greater than that resulting from calculating the general minimum wage of the geographic area of the taxpayer raised per year. * Medicines that are purchased directly in pharmacies are not deductible except when the patient is hospitalized and is include in the corresponding invoice Funeral expenses in the part in which they do not exceed the general minimum wage of the geographical area of the taxpayer raised per year, made for the persons indicated in the preceding fraction.Donations that are not onerous or remunerative, that satisfy the requirements set forth in this Law and in the general rules established for this purpose by the Tax Administration Service and that are granted in the following cases: The real interest actually paid in the financial year for mortgage loans for the acquisition of their home, contracted with the institutions that are members of the financial system, provided that the total amount of credits granted by said property does not exceed one million five hundred thousand investment units Complementary retirement contributions made directly into the subaccount of supplementary retirement contributions, under the terms of the Retirement Savings Systems Law or to personal retirement plan accounts,as well as the voluntary contributions made to the voluntary contributions subaccount, provided that in the latter case such contributions meet the permanence requirements established for retirement plans in accordance with the second paragraph of this section. The amount of the deduction referred to in this section will be up to 10% of the taxpayer's cumulative income in the year, without said contributions exceeding the equivalent of five general minimum wages of the taxpayer's geographic area raised per year. for medical expenses insurance, complementary or independent of the health services provided by public social security institutions, provided that the beneficiary is the taxpayer himself, his spouse or the person with whom he lives in concubinage,or their ascendants or descendants, in a straight line Expenses for the school transportation of descendants in a straight line when this is mandatory in terms of the legal provisions of the area where the school is located or when it is included for all students said expense in tuition. For these purposes, the corresponding amount for school transportation must be separated in the voucher. Payments made for local income tax on salaries and in general for the provision of a subordinate personal service, provided that the rate of said tax does not exceed 5%.Expenses for straight line school transportation for descendants when this is mandatory under the legal provisions of the area where the school is located or when such expense is included in tuition for all students. For these purposes, the corresponding amount for school transportation must be separated in the voucher. Payments made for local income tax on salaries and in general for the provision of a subordinate personal service, provided that the rate of said tax does not exceed 5%.Expenses for straight line school transportation for descendants when this is mandatory under the legal provisions of the area where the school is located or when such expense is included in tuition for all students. For these purposes, the corresponding amount for school transportation must be separated in the voucher. Payments made for local income tax on salaries and in general for the provision of a subordinate personal service, provided that the rate of said tax does not exceed 5%.Payments made for local tax on income from salaries and in general for the provision of a subordinate personal service, provided that the rate of said tax does not exceed 5%.Payments made for local tax on income from salaries and in general for the provision of a subordinate personal service, provided that the rate of said tax does not exceed 5%.
As an informational note I will add the following:
In 2014, individuals will be able to make personal deductions for what results from calculating the minimum between 10 percent of their total income and the equivalent of 4 times the General Minimum Wage raised per year of the geographical area where they live, which in the case of Zacatecas the SMG is $ 63.77 therefore the maximum to deduct annually would be $ 93, 053.18 pesos, that is, if a person has a monthly income of $ 10,000.00 pesos, it would be an annual income of $ 120,000.00, therefore, he can only deduct $ annually. 10,321.82 pesos, and no more.
And now we will see a small example of how we calculate the ISR in the month of JANUARY, within the category we choose.
A Person with category ANE 2 Employee of the State Government. He receives a monthly income of $ 7,836.00 pesos, we will see how much is withheld from taxes.
Revenues: 7,836
- Lower Limit: 7399.43
- Lower Limit: 7399.43
= Lower limit surplus: 436.57
X Rate: 16.00% = 69.85
+ Fixed Fee: 594.24
- Subsidy: 0.000.00
= ISR: 664.09
The amount that is withheld from him by the employer is $ 664.09 pesos.
The foregoing is derived from the fact that the obligation to withhold the contributions to the worker belongs to the employer and that this withholding must be paid by the tax at the time of payment of the consideration, regardless of whether the income is obtained from wages and in general from the provision a subordinate personal service years after such income has been earned or at the end of the Award. At this time, it is considered that the income is obtained and the tax is incurred and it is the employer's obligation to withhold it and report it.
Penultimate paragraph of ART. 113
Individuals, as well as legal entities referred to in Title III of this Law, shall find out the withholdings referred to in this article no later than the 17th day of each of the months of the calendar year, by means of a declaration that they shall present before authorized offices.
To make the annual declaration of income tax we have some obligations.
Article 118. Those who make payments for the concepts referred to in this Chapter will have the following obligations:
Fracc. From I to VII
How to deduct, based on the same previous example for the calculation of income tax.
We will deduct the tuition of the children, as allowed by the LISR
Other Deductions
Tuition. SAT 2012
Payments for education services (tuition) made for you (taxpayer), your spouse or common-law partner, ascendants (parents, grandparents) or descendants (children, grandchildren) in a straight line, provided that said persons have not received during 2011 income in amount equal to or greater than a general minimum wage in your geographic area raised per year.
Educational level Annual deduction limit ($) Monthly limit, For reference
Preschool 14,200.00 1,183.00
Primary 12,900.00 1,075.00
Secondary 19,900.00 1,658.33
Technical professional 17,100.00 1,425.00
Baccalaureate or its equivalent 24,500.00 2,041.00
Monthly
Income: $ 7,836.00
- * Authorized Deductions: $ 900.00 pesos This concept according to tuition.
= Taxable Base: $ 6,936.00
- Lower Limit: $ 4,210.00
= Excess of lower limit: $ 2,726.00
X Rate: 10.88% = 296.58
+ Fixed Fee: $ 247.24
- Subsidy: 0.00
= ISR: 543.82 What I really should have paid
- Withholdings 10% ART 127 ° LISR $ 783.60
= Income Tax in Favor $ 239.78
Well, then we already know that "HACIENDA" has to return the amount of $ 239.78 pesos that we overpaid.
You need the following:
- The tax receipts (receipts or invoices) that protect your personal deductions. The updated Con fi dential Electronic Identification Code or your current Advanced Electronic Signature; to send your return online. If you obtain a favorable balance in the ISR equal to or greater than 13,970 pesos and request a refund, you need to authenticate with the Advanced Electronic Signature; It also requires your standardized bank password (Clabe) to 18 digits to make the corresponding deposit. The retention certificates issued by the employer. People with income of less than $ 10,000.00 pesos for wages and salaries, only need the password, it is not necessary to have FAITHFUL.
To make the annual declaration of income tax we have some obligations.
Article 118. Those who make payments for the concepts referred to in this Chapter, will have the following obligations: Fracc. From I to VII
Having understood this, we now present our return and our deductions to the SAT as follows.
Through what means is the annual declaration filed when there is income exclusively from wages, salaries and similar items?
Through:
- The DeclaraSAT program version 2013 The Automatic Declaration version 2013.
Article 31 of the CFF and Rules II.2.8.2.1., II.2.8.3.1., II.2.8.3.2., And II.2.8.3.4 of the RMF (Miscellaneous Fiscal Resolution) for 2013 published in the DOF on 28 December 2012. When I actually have an ISR in favor, I am asked if I want the surplus to be returned to me as credited for the following fiscal year or returned in its entirety through a bank account, as is It gives us an email account that serves us mainly if in three months (in the event that we have requested all of our balance in favor) the money has not been deposited, notify the authority of the irregularity.
We have some penalties.
Crime of tax fraud
Article 109 of the Fiscal Code of the Federation indicates that the same penalties as the crime of tax fraud will be punished by those who:
I. Fail to inform the tax authorities, within the term established by law, the amounts that have been withheld or collected for contributions.
In this article, the obligation to find out the tax withheld at the time the salary payments are made and in general for the provision of a subordinate personal service is mentioned again, even considering a tax offense the omission of the payment of the tax, which is why the importance of knowing when the income should be considered generated.
Fines for infractions
Article 76 of the Fiscal Code of the Federation
When the commission of one or more infractions originates the total or partial omission in the payment of contributions including those withheld or collected, except in the case of foreign trade contributions, and is discovered by the tax authorities through the exercise of their powers, a fine of 55% to 75% of the omitted contributions.
