Skip to content Skip to footer

Loading Results

Mexican bill would reform tax law for subcontracted services

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

November 2020

Overview

Mexico’s Executive branch submitted a bill to Congress on November 12 that would reform labor and tax laws related to the tax treatment and legal permissibility of subcontracted services. Given the political context, Congress likely will pass some version of the proposed legal reform and that the effective date could be as early as January 1, 2021.

The takeaway

Taxpayers should analyze the possibility of significant change to the tax and legal treatment of subcontracted services or workforce solutions for discussion with management, as the consequences extend far beyond tax.  Since legislative action is likely and there is a compressed timeline for the amendments’ effective date, companies should consider contingency planning for any Mexican business with subcontracted services.  This action should include a labor law review, a functional review of the Mexican legal entities, analysis of the overall tax impact, and a human resources review of the potential impact to employees.

Contact us

Doug McHoney

International Tax Services Co-Leader, PwC US

Follow us