April 21, 2021
Mexican Congress approves bill that would prohibit outsourcing services in Mexico
The impact that the bill will have on service company structures will require careful analysis. Taxpayers may need to restructure their operations in Mexico to comply with the bill’s provisions.
On 20 April 2021, the Mexican Congress approved an amended version of the bill, originally introduced in November 2020, that would prohibit outsourcing services in Mexico. The bill incorporates the verbal agreement on the outsourcing prohibition reached by Mexico’s Government and representatives of the labor and business sectors during the first week of April. For more information, see EY Global Tax Alert, Mexico: Government reaches agreement with representatives of labor and business sectors on outsourcing services in Mexico, dated 12 April 2021.
Congress substantially amended the bill. Those amendments include the following:
The bill will be sent to the President for his signature and then for publication. The bill would be effective the day following its publication in the Official Gazette, except for the amendments to the tax provisions, which would be effective 1 August 2021.
We will issue a Tax Alert with further details on the bill.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), Latin American Business Center
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
Ernst & Young LLP (United Kingdom), Latin American Business Center, London