|The Official Gazette for Jalisco published on December 31st 2016 the decree which reforms, amongst others, articles from the State of Jalisco Tax Law related to the obligation to pay State Tax on Payroll, and came in to effect as of January 2nd 2017.
The most relevant modification regarding this tax concerns companies that receive employee services from third parties, that is to say employees hired through “outsourcing” companies.
Given the above, companies that hire personnel through third parties (meaning outsourcing companies) as of January 2017, must withhold and pay the State Tax on Payroll as if they were their own employees.
The above also applies to individuals and companies (regardless of where their tax address is) that hire construction services for a property located in Jalisco.
It is important to mention that companies that are under this obligation, based on the above mentioned, must register as withholders with the corresponding tax office based on their address and issue State Tax on Payroll withholding reports (monthly or annually) using the format approved by the competent authorities.
It is also important to mention that outsourcing companies must inform the contracting company of the payroll amount and the corresponding tax for subcontracted personnel that must be withheld each month. Should this not be the case, the contracting company is obliged to prepare the tax calculation per the following:
Total value of the services provided during the month (per the CFDI tax invoice)
(x) 0.90 factor
(=) Base for the State Tax on Payroll
(x) Tax rate (2%)
(=) State Tax on Payroll to be paid for the period.
Should this be your case, we recommend you contact your executive (from the outsourcing company) to coordinate obtaining the information and complying with the deadlines and requirements established by the Law and therefore avoid any possible sanctions.
Please consider that the deadline to pay the State Tax on Payroll corresponding to January 2017 is next Monday, February 13th 2017.
Please feel free to contact us should you have any doubts or questions.