RELEVANT ARTICLES & INDUSTRY ALERTS
"More Taxpayers Contest CTA Reporting"
American taxpayers in two states are the latest to expand challenges to the U.S. Corporate Transparency Act’s new Beneficial Ownership Information reporting.
The main issue: Can the U.S. government interfere with a business arrangement that’s essentially between a private enterprise and American state government?
"Mexico Implements New Gender-Focused Protocol for Labor Inspections"
Mexico’s Ministry of Labor and Social Welfare (“Secretaría del Trabajo y Previsión Social” or “STPS”) published a Gender-Focused Protocol for Labor Inspections, designed as a tool for labor inspectors to assess employers’ compliance with the gender equality laws. The new protocol instructs labor inspectors to assess compliance by requesting information either on documents and/or through a specific questionnaire when interviewing employees to elicit statements that might signal an employer’s noncompliance with the gender equality laws. As labor inspectors can interview employees during an inspection, an innocuous statement from any employee can spark an administrative nightmare for employers that ultimately could end in steep penalties.
"Financial freedom: A gift to your family"
Here’s a sobering statistic: 72% of retirees say one of their biggest fears is becoming a burden on their families, according to a study by Edward Jones and the consulting firm Age Wave. If you are near retirement, how can you prepare yourself to become financially free, so you won’t have to depend on grown children or other family members?
"Lessons from CBP Summit"
CBP held its Trade Facilitation and Cargo Security Summit in Philadelphia. The sold-out event brought together government representatives and the trade community including a key note speech by the United States Secretary of Homeland Security Alejandro Mayorkas. There were two recurring threats that were highlighted throughout the conference: fentanyl and de minimis shipments. The common theme to combat these threats was to know your supply chain.
"Plaintiffs Win – To A Degree – In Decision Regarding Florida Foreign-Ownership Law"
The U.S. Court of Appeals for the 11th Circuit has partially granted the plaintiffs’ motion for an injunction pending appeal in Shen v. Simpson. The federal suit challenges the new law in Florida that restricts certain individuals from China and other “foreign countries of concern” from owning real property in the state.
"FinCEN Proposes Tighter Reporting Rules For U.S. Residential Real Estate Deals"
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury has issued a Notice of Proposed Rulemaking (NPRM) for regulations designed to fight money laundering by increasing transparency in the U.S. residential real estate sector. The proposed rules could impact international investors in American residential real estate.
"USCIS to Implement Varying Filing Fees by Visa Category"
U.S. Citizenship and Immigration Services (USCIS) will implement its new filing fee structure. The new fees will vary by visa type with exceptions for small employers and non-profit entities. A new Asylum Program Fee will also be added to certain petitions.
"Time for financial spring cleaning"
Spring is almost here, which means it’s time for some spring cleaning. This year, in addition to tidying your home and surroundings, you might want to consider sprucing up your financial environment, as well.
“Expats Face Major Hit From Billionaires’ Tax Bill”
Proposed American legislation on billionaires could have a major impact on the “exit tax” of expatriates. Legislation recently introduced in the U.S. Congress to curtail billionaires’ tax loopholes could also effectively increase the “exit tax” on wealthy who want to expatriate.
“New York Greenlights LLC Transparency Law”
On the heels of new reporting requirements for the Corporate Transparency Act, the state of New York has made it easier to find out who owns buildings.
"Navigating the FY2025 H-1B Lottery: What Employers Need to Know"
The upcoming H-1B lottery for Fiscal Year 2025 marks a significant shift in the registration and selection process for professional foreign workers seeking employment in the United States. With the U.S. Citizenship and Immigration Services (USCIS) introducing a Final Rule on February 2, 2024, aimed at enhancing the integrity of the H-1B registration process, employers and their legal representatives must stay informed of these changes to effectively participate in the lottery.
"Simplifying US-Mexico cross-border trade: How Nuvocargo delivers on its promise"
Powered by proprietary technology, Nuvocargo is simplifying US-MX cross-border trade, bringing a new level of visibility and efficiency. This leads to 33% faster border crossings and considerable cost savings for shippers.
"H-1B Filing Season gets into Full-"How Will Higher Rates Affect You?"
As you know, interest rates have risen considerably over the past couple of years. But what does this mean to you, as a consumer and as an investor?
From a consumer’s standpoint, it’s not hard to see the effects of higher interest rates. If you want to take out a mortgage or refinance an existing one, you’ll find that it’s considerably more costly, in terms of the interest you’ll pay, than it was a few years ago. And the same is true of car loans and credit cards. Paying these debts at higher rates can affect your cash flow, so while rates are high, you may need to make some important decisions about your overall budget and spending plans.
"H-1B Filing Season gets into Full-Swing for H-1B Employers and Prospective H-1B Employees"
U.S. Citizenship and Immigration Services on Dec 6, 2019, announced a requirement for employers seeking to file H-1B cap-subject petitions, including those eligible for the advanced degree exemption, to first electronically register and pay the associated $10.00 H-1B registration fee before filing a petition. USCIS will open an initial registration period for a minimum of 14 calendar days each fiscal year.
"DOL Releases Annual Fine Increases for Immigration-Related Violations"
The U.S. Department of Labor (DOL) published its new immigration-related fines/penalties, effective January 15, 2024. Immigration-related violations before the DOL involve these visas: H-1B, H-2A, and H-2B. These increases are pursuant to the Federal Civil Penalties Inflation Adjustment Act of 2015. Since that time, penalties have been adjusted yearly based on the rate of inflation.
"Chinese Income Figures in Case Against Californian"
A man who worked simultaneously for employers on the West Coast and in the People’s Republic of China may be on the hook for failure to file FBARs, among other tax charges.
"2024 Currency Outlook"
After strengthening 12.0% in two years, the U.S. Dollar (USD) declined by 3.5% overall in 2023 per the Bloomberg Dollar Spot Index (BDXY). Much like the year prior, the fourth quarter (Q4) of 2023 resulted in major depreciation for the buck, marking a 5.0% downfall. A major beneficiary in Q4 was the Euro (EUR), which recovered almost all it had lost the year before, climbing by 4.6% in value. The United Kingdom managed economic pain and kept up with the Fed, helping to revive Pound Sterling (GBP), as it rose by 6.4%
"The future of the packaging industry: Artificial intelligence and nearshoring."
The packaging industry is in constant evolution: nowadays, two innovative forces are guiding the way forward—nearshoring and artificial intelligence (AI). The merging of these trends is giving rise to a situation where efficiency meets adaptability, bringing production closer than ever to consumer markets. This strategic circumstance is shaping the future of packaging, redefining not just how products are manufactured but also how they adapt to buyer demands.
"Artificial Intelligence: Innovation in the Digital Video Era"
In the ever-evolving landscape of the digital age, video production has undeniably become a foundational cornerstone of communication. Whether you’re a content creator, a business, or an organization with a message to convey, video has revolutionized the way we share information and connect with audiences worldwide. But what’s making this revolution even more exciting? The seamless integration of artificial intelligence (AI) into video content production.
"How can business owners plan for an exit?"
If you’re a business owner, you always have a lot to do and a lot to think about. But have you put much thought into how you’ll eventually leave it all behind?
Even if you’re a few years away from that day, it’s a good idea to create an exit strategy. If you’re like most other owners, most of your net worth may well be tied up in your business — so how you exit that business can have a big impact on your finances and your retirement.
"NAYARIT: DESTINATION WHERE LUXURY IS EXPERIENCED IN MEXICO"
The Nayarit Ministry of Tourism has placed the luxury segment as one of the priority sectors in tourism promotion, as it contributes to greater attraction of tourists to the state, with a higher average expenditure and with a low-impact approach that allows maintaining the environmental preservation policies that have been established while generating greater economic development for the community.
"How Biden’s AI Executive Order Can Revolutionize Employment-Based Immigration"
President Biden’s recent executive order on artificial intelligence has the potential to revolutionize employment-based immigration in the United States. The order aims to modernize the Schedule A list, which is critical to fill labor shortages in high-demand fields and attract global talent to the country’s crucial sectors.
"Nayarit joins the WTTC´s Hotel Basics initiative to promote sustainability"
In a joint effort to promote sustainability in travel and tourism, the Mexican state of Nayarit joins the World Travel and Tourism Council (WTTC) Hotel Basics initiative. This alliance seeks to establish criteria global sustainability standards in the hotel industry and marks a significant step towards a more committed to caring for the environment and developing its communities.
"H-1B Rule from DHS provides new changes to an old system"
Key modifications include broadening definitions for research organizations to increase flexibility and revising exemption criteria for beneficiaries indirectly linked to qualifying organizations. Extensions for F-1 status transitions to H-1B are proposed, along with a change in the H-1B cap registration process to prioritize unique beneficiaries and reduce abuse. Enhanced integrity measures involve clearer job offer verifications, refining the U.S. employer definition, and stipulations about a petitioner's legal presence. DHS also seeks clearer guidelines on beneficiary-owner H-1B eligibility, site visit compliance, and third-party staffing rules to maintain program integrity.
"State of Nayarit sets the table for Thanksgiving"
With Thanksgiving just around the corner is a time of togetherness with family, coupled with a delicious feast, making it one of the most sought-after holidays of the year. It is also a great time to begin planning for your late fall/early winter getaway and what better place to escape the freezing weather.
Many restaurants at the property where visitors stay or in any of the coastal towns of the Riviera Nayarit, they will enjoy the delicious turkey coming out of the oven, pumpkin pie and cranberry sauce.
Thanks to the excellence of its cuisine and service, seven restaurants are in the eighth edition of “Guía México Gastronómico. Los Grandes Restaurantes de México 2023.” El Delfín at the Garza Canela hotel in San Blas, and Emiliano Cocina y Vino in Tepic. For the second consecutive year also Loma 43 in Tepic, Loma 42 Bahía in Nuevo Nayarit, Hectors Kitchen and Tuna Blanca in Punta de Mita. For the first time, Codex inside the Conrad Punta de Mita.
“Brazil Again Seeks to Tax Citizens' Foreign Financial Investments”
The Brazilian government is making another attempt to tax its resident citizens on income from oversea financial investments, after an initial proposal failed. This could mean major changes to the tax treatment of individual income in that country.
The government of Brazil is again looking to increase revenue by taxing the capital income from financial investments obtained abroad by individuals who live in Brazil.
"Ultimate Guide to Navigating Internal Audits for Form I-9: Your FAQs Answered"
Learn everything you need to know about internal audits for Form I-9. From what to do if you've used the wrong form, to dealing with E-Verify, this ultimate guide answers all your questions.
"Changes in the New Form I-9, Employment Eligibility Verification"
On August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) released a revised version of the Form I-9, Employment Eligibility Verification, which may be used now but must be used for all new hires and rehires starting November 1, 2023.
"The Federal Consumer Protection Attorney's Office seeks to regulate "Influencers"
Over the last few years, and thanks to the development of different digital platforms and social networks, there has been a notable increase in collaborations between brands of different products, goods or services, and individuals known as "influencers" in order to promote or advertise certain products, goods or services (the "Products or Services").
"Case Claims IRS Failed To Comply With Penalty Rules On A Foreign Trust"
The IRS faces a legal challenge for a penalty collection for failing to file an information return for a foreign trust. Did the IRS itself fail to comply with requirements for written supervisory penalty approval?
"Bridging Borders: A Small Business Guide to Sponsoring Green Cards"
Finding qualified employees is often a challenge for many small businesses, especially in highly specialized fields. One potential solution is to hire foreign workers looking for green card sponsorship. However, many small business owners are under the impression that they can't sponsor employees for a green card. In this blog post, we aim to debunk this misconception by explaining the process of sponsoring an employee for a green card.
"Tips on Physical Reverification of Virtually Verified Remote Employees"
As was previously reported, employers have until August 30, 2023, to conduct in-person physical verification of identity and employment eligibility documentation for all employees who were onboarded using remote virtual verification between March 20, 2020 and July 31, 2023. Employers have been raising several questions about this process. The USCIS has provided answers to many of these questions.
"IRS Curtails Mitigation of Some FBAR Penalties After Bittner"
The IRS will no longer routinely reduce the penalty for non-willful failure to file Reports of Foreign Bank and Financial Accounts (FBAR) following a major Supreme Court decision.
"Supreme Court To Hear Moore Case, With Major Implications"
The Supreme Court will hear a tax case of a seemingly insignificant amount of money – one that could open floodgates to billions in refunds to multi-nationals.
"EMERGING MARKETS-Latam FX mixed, Mexico's peso dips as inflation slows"
Latin American currencies were mixed against a softer dollar, with Mexico's peso easing after data showed slowing inflationary pressures, while an uptick in copper prices supported Chile's peso. Mexico's peso was last down 0.4% at 1501 GMT after holding near the unchanged mark earlier in the day, also bogged down by a fall in crude prices.
The Bank of Mexico's decision to halt its nearly two-year-long rate-hiking cycle last month had raised concerns about a setback to the peso, which has enjoyed a rally this year on the back of its interest rate differential with the United States.
"Deadline Nears for Filing the Mandatory Bureau of Economic Analysis 2022 BE-12 Survey"
The Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce requires all entities subject to the reporting requirements to file a mandatory BE-12 Benchmark Survey of Foreign Direct Investment in the United States. The BE-12 survey is conducted once every five years in place of the BE-15 annual survey and is the BEA's most comprehensive survey in terms of both the number of companies covered and the amount of information gathered. It is used to produce statistics on the scale and effects of foreign-owned business activities in the United States.
"INTERNATIONAL TAXPAYERS ONE BIG FOCUS OF NEW IRS PLAN"
After the IRS unveils its plans to spend billions in new funding, wealthy and international taxpayers can expect new attention from the agency in coming years. The Internal Revenue Service has released its strategic operating plan for the next decade, the agency’s blueprint for how it plans to spend $80 billion in funding that was green lighted by last year’s passage of the Inflation Reduction Act.
"Streamlined Arrival Process for International Travelers"
U.S. Customs and Border Protection (CBP) has officially implemented its “Simplified Arrival” program that was piloted in various cities from 2021 to 2022 to streamline the arrival process for international travelers at all 238 arriving airports, 34 seaports, and all southern pedestrian and most northern secondary land ports. Under the Simplified Arrival program, CBP no longer issues entry stamps on admission to the U.S. and will now only issue an electronic Form I-94 on its website.
"The Mexican Government will grant tax incentives for companies that decide to establish or relocate their facilities in the Interoceanic Corridor of the Tehuantepec Isthmus"
The Ministry of Treasury issued the tax benefits applicable to taxpayers that decide to establish or relocate in the so-called Development Poles of the Inter-Oceanic Corridor of the Tehuantepec Isthmus (southeastern Mexico). Such tax incentives are intended to foster the economic growth of the region, as well as to encourage the creation of jobs through private investment and will be granted to companies that are awarded with concession titles for land plots located in the Development Poles through public tenders to be launched soon by the Federal Government.
“CALLS FOR U.S. WEALTH TAX AGAIN GROW LOUDER – BUT ANY MORE EFFECTIVE?”
After years of debate, discussion and indecision over income gaps, some states have proposed laws to tax the uber-rich even as President Biden calls for the same. Is America ready to cross this major threshold of taxation?
"Explorando la Visa H-1B Concurrente: Una guía para trabajar con múltiples empleadores"
En el cambiante panorama laboral de hoy, los tabajadores extranjeros con visa H-1B pueden estar considerando trabajar simultáneamente para múltiples empleadores. La buena noticia es que es posible, siempre que se cumplan ciertos requisitos y el empleador adicional presente una petición de H-1B concurrente para una ocupación especializada calificada. Este artículo proporciona una descripción detallada del proceso, requisitos y consideraciones clave para empleados y empleadores con visa H-1B que buscan empleo concurrente.
“Employment Contracts in the Americas”
In this How to Do Business in the Americas podcast series episode, Littler Share holders Courtney Wilson and Juan Carlos Varela discuss the practical implications of employment contracts in the Americas and their interaction with non-compete agreements and confidentiality clauses. In this podcast, Courtney gives the audience a summary of the common misconceptions employers have when structuring their employment agreements.
Juan Carlos and Courtney then offer practical recommendations.
"Supreme Court Decides For Bittner in Case of FBAR Penalties"
A narrow U.S. Supreme Court decision in Bittner has curtailed federal penalties in a major case involving failure to file FBARs.
“Questions Abound for FinCEN Beneficial Ownership Database”
A key part of the Financial Crimes Enforcement Network’s activity under the Corporate Transparency Act is a sprawling database. How to build it – and who should have access?
“Construction Insights 2023: Mexico”
In Mexico, laws and regulations governing construction vary depending on the location where the construction project takes place, as well as the type or purpose, size and/or nature of project. Construction is usually governed on a state or even on a municipal level; however, there could be some specific works where federal laws will apply.
"New Process for Lawful Permanent Residents to Receive Temporary Evidence of Status by Mail"
USCIS has introduced a new process for lawful permanent residents to receive temporary evidence of their status by mail. This process allows applicants to receive an Alien Documentation, Identification and Telecommunication (ADIT) stamp without physically visiting a field office.
"Sustainable Taxonomy of Mexico"
Mexico's Sustainable Taxonomy (the "Taxonomy"), a classification tool created through a broad, participatory, and coordinated three-year process to identify and define activities with positive effects on the environment and society.
"Nearshoring and Friendshoring: Seizing Golden Opportunities With Mexico"
A famous Mexican President once said “Poor Mexico, so far from God, so close to the U.S.” Little did he know at the time that such proximity would hold tremendous economic opportunity.
"FinCEN Issues Proposed Rules on Disclosing – and Protecting – Ownership Info"
The Corporate Transparency Act intensifies disclosure of beneficial ownership info to authorities. FinCEN is proposing access restrictions and requirements.
"How the IRS Shares Taxpayer Info With Other Governments"
The Internal Revenue Service is ready, willing and able to help authorities worldwide with tax enforcement – especially with the sharing of taxpayers’ information.
"Why top companies are choosing Mexico for Nearshoring, and you should consider it too"
Mexico remains one of the top trade U.S. partners. This represents a huge opportunity for American companies, especially since Mexico is starting to replace China as a source of different supplies and has many competitive advantages such as a similar time zone, work culture, and geographical location.
"Imports subject to the Ministry of Labor and Social Welfare (“STPS”) regulation (Forced labor)"
The Forced Labor Agreement establishes that in accordance with Article 2(1) of the Forced Labor Convention, 1930 (Convention 29) of the International Labor Organization (“OIT”), forced or obligated labor is understood as: "Any work or service which is demanded of any person, including minors, under the threat of any penalty and for which he has not offered himself voluntarily".
"IRS Ruled Just in Pursuing Years of Underpayment and Fraud"
Long-term inadequate filing of FBARs just returns lets the IRS loose to pursue fraud –international lack of cooperation and even death notwithstanding, as a recent case shows.
"Mexico: Increase to the UMA Value Announced for 2023"
On January 9, 2023, Mexico’s National Institute of Statistics and Geography published the new values for the Updated Metric Unit (Unidad de Medida y Actualización, or UMA by its acronym in Spanish) that will take effect on February 1, 2023, as provided by Article 5 of the Law to determine the value of the UMA.
"Registration of the institutions that manage personal saving accounts tax incentives"
Article 185 of the Income Tax Law establishes a tax incentive that allows individual taxpayers who make deposits in special personal savings accounts, make premium payments on insurance contracts based on pension plans related to age, retirement or retirement, or acquire shares of investment funds that are identifiable under the terms indicated by the Tax Administration Service by means of general rules, to subtract said amounts from the annual income tax base of the corresponding taxpayer.
"Variation in the value of the Unit of Measurement and Update (UMA) and its impact on labor matters"
The National Institute of Statistics and Geography (INEGI) reported the update of the Unit of Measurement and Update that will come into effectiveness on February 1st, 2023, with an increase of 7.82 percent compared to the previous year.
Unit of Measurement and Update (UMA) value in 2023
Daily - $103.74
Monthly - $3,153.70
Annual - $37,844.40
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"Entry of Malaysia into the Trans-Pacific Partnership"
The "Agreement that modifies the Agreement by which the Applicable Tariff of the General Import Duty for goods originating in the region made up of Mexico, Australia, Brunei, Canada, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam, which correspond to Australia, Canada, Japan, New Zealand, Peru and Singapore".
"Mexico Increases the General Minimum Wage"
On December 1, 2022, the National Minimum Wage Commission (“CONASAMI” for its acronym in Spanish) agreed to increase Mexico’s general minimum wage to $207.44 Mexican pesos per day, and to $312.41 Mexican pesos per day in the Free Economic Zone of the Northern Border, effective January 1, 2023. The minimum wage in force for 2023 will result in an overall increase of 20% (10% as direct increase and $15.72 Mexican pesos as a fixed amount increase).
"Amendment to Federal Labor Law in connection with vacation days"
On December 27, 2022, an amendment to the Mexican Federal Labor Law was published in the Official Gazette of the Federation in connection with vacation entitlements (the “Reform”), which will become effective on January 1, 2023. READ MORE
"Court deems a foundation a foreign trust, greenlighting tax penalties"
Foreign assets are always tricky for U.S. tax reporting. A recent court decision also shows that differentiating a foundation from a trust is pivotal.
READ MORE
"IRS Promises More Enforcement of Foreign Nationals in U.S."
A federal district court has greenlighted a John Doe summons to help the IRS fight crypto-related tax fraud. The authorization could help the U.S. government find thousands of tax cheats.
"Identification of controlling beneficiaries and publication of FAQ by the Tax Administration Service (SAT)"
The obligations to identify the controlling beneficiaries of legal entities, trusts and other legal concepts and establish duly documented internal control procedures in order to obtain and keep the complete and updated information of such beneficiaries came into force in order to combat tax evasion and prevent money laundering.
"Regulatory overview for crypto-assets or virtual assets in Mexico"
Crypto–assets or virtual assets have been the subject of analysis in multiple jurisdictions over the last few years, including in Mexico. Discussions on crypto-assets or virtual assets and their environment have involved the entire Fintech community in Mexico including, in particular, regulators.
"New AI Training Requirement for Certain Federal Government Employees"
President Biden signed into law the AI Training Act. The purported purpose of the Act is to ensure the federal government’s workforce has knowledge of how artificial intelligence (AI) works, AI’s benefits, and AI’s risks.
IRS gets another “John Doe” summons in hunt for crypto tax cheats
A federal district court has greenlighted a John Doe summons to help the IRS fight crypto-related tax fraud. The authorization could help the U.S. government find thousands of tax cheats.
Mexican Antitrust Investigations into APP-Stores
The Investigative Authority of the Federal Institute of Telecommunications (“IFETEL”) published in the Official Federal Gazette the opening of an investigation for possible relative monopolistic practices in the mobile device’s app stores and related markets within Mexico, due to a claim filed by an undisclosed party.
Tariff and non-tariff incentives on basic food basket products
The Ministry of Finance and Public Credit ("SHCP") published in the Official Gazette of the Federation ("DOF") the "DECREE by which the payment of import duties is exempted and administrative facilities are granted to several goods of the basic basket of goods and inputs indicated", which entered into effect on October 20, 2022, and will be in force until February 28, 2023 (and may be extended until December 31, 2023).
READ MORE
New Federal Tax Credits Require Compliance with New Prevailing Wage and Apprenticeship Mandates on Clean Energy Construction
In order to qualify for the new Inflation Reduction Act tax credit, taxpayer owners/developers and their construction contractors and subcontractors are required to comply with the federal prevailing wage provisions of the Davis-Bacon Act.
IRS Gets a Boost Hunt Wealthy Tax Cheats
SOCIAL: The Inflation Reduction Act will give the IRS money to audit the rich and hunt tax cheats. Stronger enforcement will come with conditions, however.
A bigger and stronger Internal Revenue Service will soon be coming after more wealthy tax cheats, thanks to the Inflation Reduction Act. The landmark legislation that President Joe Biden signed into law on Aug. 16 includes $80 billion for the IRS over the next 10 years – with a big slice of that money earmarked for better IRS enforcement.
READ MORE
"How should a company intelligently adopt employment-focused artificial intelligence, or AI tools? "
Employment-focused, artificial intelligence-driven tools promise – and deliver – significant operational efficiencies, cost savings, and enhanced workforce and workplace outcomes. These include tools related to recruiting, talent assessment, communication, disability accommodations, and safety.
However, the inner workings of these emerging tools and technologies cannot be simply explained. Further, there is no clarity on how the use of AI will be regulated by Congress and the courts, particularly in light of heightened public concern that AI algorithms are capable of discriminatory bias. Forward-thinking corporations can take a pragmatic approach in adopting AI processes.
READ MORE
"Mexican Supreme Court suspends the application of the Natural Gas Strategy issued by the Ministry of Energy"
The Mexican Supreme Court suspended all the effects and consequences of the "Supply guarantee strategy to optimize capacity in the National Integrated Natural Gas Transportation and Storage System” (Strategy), issued by the Ministry of Energy (SENER) through official letter; as well as of the official letter, in which the National Center for Natural Gas Control (CENAGAS) requested National Integrated Natural Gas Transportation and Storage System (SISTRANGAS) users to comply with the Strategy.
READ MORE
"IRS Waives Penalties for Some International and Late Returns"
The IRS is offering pandemic-related relief for certain penalties, including those for international information returns (IIRs), with respect to tax returns for 2019 and 2020. The catch: The returns must be filed no later than this Sept. 30.
READ MORE
"U.S. Poised to Get Tougher on Crypto Investments"
U.S. agencies and lawmakers are finally shaping policies concerning cryptocurrency. The result could change investors’ options significantly. Cryptocurrency has offered a lot to investors – including sky-high returns amid a lack of regulation. In what experts claim might stabilize crypto’s market and protect its investors, the digital asset’s Wild West days may be ending in the U.S.
READ MORE
"New “Foreign Trade Compliant Company” program issued by the Ministry of Economy"
The Ministry of the Economy General Directorate of Trade Facilitation and Foreign Trade announced on the National Foreign Trade Information Service website (SNICE) an invitation to participate in a pilot program for the Foreign Trade Compliant Company Program.
The ECCE purpose is to generate a best practices certification model in foreign trade regulatory compliance matters for Mexican companies.
READ MORE
"CRE submits three draft regulations to CONAMER relating to petroleum and petrochemical products"
The Energy Regulatory Commission ("CRE") submitted for the approval of the National Commission for Regulatory Improvement ("CONAMER") three draft regulations relating to petroleum and petrochemical products (the “Draft Regulations”)
"New Federal Labor Inspection Model"
The Inspection Program 2022 was published where the different inspection strategies to be implemented by the Decent Work Unit, through the General Directorate of Federal Labor Inspection and the Federal Representation Offices, of the Ministry of Labor and Social Welfare, were announced.
The new inspection model is aligned with the obligations assumed under the T-MEC, which establishes the obligation to have regulations that guarantee acceptable working conditions. It also promotes compliance with labor laws through the strengthening of inspections and the hiring and training of more inspectors to verify possible labor rights violations, with the possibility of imposing sanctions or fines.
"USA and Canada request Mexico USMCA Consultation in connection with energy policy"
The Mexican Government announced that it had received requests for the commencement of consultations from the U.S. Government (the “US Request for Consultations”) and from the Canadian Government (the “Canada Request for Consultations”), regarding possible violations of the USMCA in connection with the energy policy adopted during the current administration.
"Pérez Correa González (PCG) represented Swvl in its expansion with the acquisition of Urbvan, the mass transportation technology platform"
(PCG) represented Swvl, a global provider of technology-enabled solutions for private transportation, in its expansion in our country, who announced a definitive agreement through which they acquired Urbvan Mobility Ltd.
"UPS is happy to announce the ten recipients of this year’s grant program – each business was selected based on their vision, passion and resilience"
Solanoexp won The Ignite Entrepreneur Program by UPS and recently received support from them as well.
The Accion Opportunity Fund creates an inclusive, healthy financial system by offering grants and small business loans. They also provide educational resources, coaching and support networks in English and Spanish.
"USCIS to Implement Premium Processing for Certain Pending EB-1 and EB-2 Form I-140 Petitions"
USCIS announced implementation of premium processing for certain work visa petitioners who have pending EB-1 and EB-2 petitions. This announcement is part of USCIS’ plans to expand its premium processing scheme. Premium processing provides expedited processing for certain USCIS petition types and guarantees adjudication within 15 calendar days of receipt of the petition.
Latest news regarding Antitrust and Energy matters in Mexico.
In the last few years, the Mexican Federal Economic Competition Commission (“COFECE” as per its acronym in Spanish) has been following the different activities of the energy sector in Mexico, which is one of the eight priority sectors identified by COFECE in its 2022-2025 Strategic Plan, due to which COFECE has participated in antitrust related matters pertaining to such sector.
"Guidelines for the Operation and Functioning of the Electronic Business File"
The Electronic Business File is a technological tool through which an agency of the Federal Public Administration (“Transferor Authority”) transfers information to another agency of the Federal Public Administration (“Transferee Authority”), aiming to resolve “Processes” or “Services”.
New York’s New Notice of Electronic Monitoring Goes into Effect on May 7, 2022
New York State’s recently enacted law requiring notice of electronic monitoring goes into effect on May 7, 2022. To comply with the law, private employers with a place of business in New York must (1) provide notice to new hires in New York who are subject to monitoring and obtain their acknowledgment of the notice; and (2) post the notice in a conspicuous place at the work site for viewing by current employees.
The prior notice to new hires may be in written or electronic form. The acknowledgement may also be in writing or obtained electronically. Notably, the law applies only to employers that “monitor or otherwise intercept” employees’ (1) telephone calls; (2) e-mail; and/or (3) Internet access or usage.
New reporting guidelines for specialized services providers before the Mexican Social Security Institute
On April 12, 2022, the Official Gazette of the Federation published guidelines established by the Mexican Social Security Institute (IMSS), for the submission of the four-monthly report for those individuals or legal entities that provide specialized services or execute specialized works in the Information Platform for Specialized Services or Works Contracts (ICSOE).
Mexico's House of Representatives dismisses constitutional amendment bill in matters of electricity
In a session held on April 17, 2022, the House of Representatives voted on the constitutional amendment bill in matters of electricity presented by the Mexican President on September 30, 2021.
In order to be approved, Constitutional amendments require the favorable vote of a qualified majority of two thirds of the members present in both Chambers of the Congress, in addition to subsequently requiring the approval of a simple majority of the State Congresses.
In the session of the House of Representatives, 498 representatives voted, which in turn required the favorable vote of at least 332 representatives for the bill to be sent to the Senate for its discussion. With votes against the bill from a coalition formed by Partido Acción Nacional, Partido Revolucionario Institucional and Partido de la Revolución Democrática, as well as of Movimiento Ciudadano (223), and votes in favor of the bill from Movimiento Regeneración Nacional, Partido del Trabajo and Partido Verde Ecologistade México (275), the qualified majority was not reached and the bill was dismissed.
COFECE investigates e-commerce market in Mexico
On March 31st, the Mexican Federal Economic Competition Commission (COFECE, as per its acronym in Spanish) through the Official Federal Gazette, published the initiation of an investigation to determine the existence of barriers to the competition and free access in the e-commerce retail market.
Such market is integrated by the purchase and sale of merchandise on the internet, through a method of receiving or posting orders, whose growth in Mexico has increased considerably during the last couple of years, due to the pandemic caused by the COVID-19 virus.
By means of the agreement published by COFECE’s Investigation Authority under the file number IEBC-001-2022, the aforementioned Commission stated it has identified evidence that indicates the absence of effective competition conditions in such market.
This file is especially relevant, since it is the first time COFECE has initiated an investigation related to digital markets.
Bouncing Back (and Forth): Statewide Reopening and Mitigation Steps
As the trajectory of the COVID-19 pandemic continues to unfold, government officials at all levels are reevaluating their health and safety protocols and adjusting workplace guidance based on ever-shifting case and vaccination metrics. Jurisdictions across the country have progressed and regressed by implementing different measures, on different timetables – resulting in a patchwork that has proven particularly challenging for multistate employers. As vaccination rates increase, jurisdictions have implemented plans for more robust reopening steps.
The chart on the link provides links to key reopening orders and/or mitigation measures affecting the private sector issued at the statewide level. Employers should bear in mind that these materials typically offer detailed instructions, which often vary by industry. As a result, it is important to review each order along with any corresponding official guidance to get a complete picture of all requirements and how they may impact each employer’s operations. We will update this list regularly but expect it will become outdated quickly as new announcements are made.
Employers might also wish to review our post summarizing statewide guidance on face coverings.
Note that the chart does not cover orders or guidance issued at the local level. Employers should consult with counsel for our additional resources on orders that may apply to their operations.
COFECE suspends term to issue a resolution regarding competition barriers in the card payment system
On February 1st, 2022, the Mexican Federal Economic Competition Commission (COFECE) published a statement announcing the suspension of the term to issue a resolution in the file IEBC-005-2018, related to the card payment system.
The Board of COFECE approved this suspension due to the impossibility of issuing the corresponding resolution since the matter legally requires the favorable vote of at least 5 commissioners and the board of such constitutional body is currently comprised of 4 commissioners, even though the Board should be comprised of 7 commissioners.
Pursuant to article 28 of the Political Constitution of the United States of Mexico, it is the Executive Office who must propose to the Senate of the Republic a list of individuals that can be appointed as commissioners on COFECE’s Board, from the lists sent by the Evaluation Committee (comprised of the Bank of Mexico and the National Institute of Statistics and Geography), which have been sent in the three occasions on which the positions became vacant.
In this statement, COFECE urges the Executive Office and Senate to carry out all actions necessary to appoint the three missing commissioners.
It is important to mention that on December 6th, 2021, COFECE filed a constitutional case under file number 207/2021 before the Mexican National Supreme Court of Justice, contesting the omission of the Executive Office to make the appointments. It is still pending.
Inflation-Related Wage Changes Require Employers to Keep Their CP-Eye on the Prize
During his State of the Union address, President Biden indicated that getting inflation under control was a top priority, and to businesses he said, “Lower your costs, not your wages.” For many employers throughout the country, however, lowering wages has not been their response to the recent health or economic crises. And in parts of the country, by law wages are heading in only one direction—up—as many local minimum wage statutes adjust their rates to changes in the consumer price index (CPI).
Below we provide not an economic forecast, but a forecast of what employers might expect to experience during these turbulent economic times so they can budget accordingly in the coming months and prepare for near-term (July 1) and future (January 1, 2023) mandatory wage rate changes.
During COVID-19, running a business has been anything but easy. We’ve all read about the “Great Resignation” causing “wageflation”. And now with inflation, some companies might find themselves in an even more precarious situation. Although mid-year (July 1, 2022) minimum wage increases are still about four months away, some jurisdictions have already revealed what their rates will be; the changes are notable and demonstrate the impact rising inflation can have on wages in jurisdictions that adjust their minimum wage due to changes in the CPI.
Retirement Plan Options for American Expats
As with most financial planning issues for Americans living abroad, retirement planning options can be more limited and more complex than they are when living in the U.S. In most cases, the familiar U.S. employer-sponsored retirement plans like 401(k)s are not available to expats. Foreign employers cannot offer them since they are required to be set up in the U.S., and most U.S. employers don’t offer them, primarily because the company uses a foreign business entity for tax purposes.
Often, foreign employers will offer their own local, private pension plan, which may or may not be advantageous to the U.S.-connected employee. Employer contributions or a matching component could be beneficial, unless the investments in the plan are considered PFICs (Passive Foreign Investments Companies), in which case the punitive tax and considerable reporting obligations may outweigh the perceived benefits.
What options does that leave to the American living overseas and trying to save for retirement? IRAs, SEP IRAs and Solo 401(k)s for the self-employed, U.S. brokerage accounts, and on a limited basis, taxdeferred annuities, can all proved to be useful tools for American expats to save for retirement. I'll discuss IRAs, SEP IRAs, and Solo 401(k)s here.
Tax Reform 2022
On November 12, 2021 the Decree to Amend the Federal Tax Code (FTC), Income Tax Law (ITL), Value Added Tax Law (VATL), Special Products and Services Tax Law (SPSTL), among other laws (jointly referred to as (“2022 Tax Reform”) was published in the Federal Official Gazette.
The 2022 Tax Reform, in force as of January 1, includes modifications to the tax regulations that may seem minor and superficial. However, several of them could result highly important and trigger relevant effects for the taxpayers, depending on their particular situation and hence our recommendation is to analyze these amendments on a case-by-case basis.
The purpose of this document is to summarize the modifications that we consider to be the most relevant, while not pretending to be either an exhaustive analysis of such modifications, or to exhaustively include every modification.
INCOME TAX LAW
Exchange rate for the determination of exchange rate gains:
It is established that the exchange rate gain determined by taxpayers cannot be less than the one resulting from applying the exchange rate for the payment of obligations in foreign currency, established by the Bank of Mexico (Banco de Mexico) and published in the Federal Official Gazette on the day in which the gain is realized.
Said parameter was previously established only for purposes of determining the exchange rate loss by taxpayers. However, hereinafter it will be used for any tax effects derived from the exchange rate fluctuation from any transaction established in foreign currency.
Additional obligations and implications derived from labor subcontracting reform.
On April 23, 2021, amendments to the Federal Labor Law, the Social Security Law, the National Housing Fund Institute for Workers Law, the Federal Fiscal Code, the Income Tax Law, and the Value Added Tax Law, were published, aimed at regulating the labor outsourcing regimes in Mexico. Said amendment, among other things, implied the imposition of new periodic obligations, as well as certain actions to be taken in accordance with the following:
Periodic social security obligations
The specialized service providers should obtain their registry before the Labor Ministry through the registration in the Registry of Specialized Service Providers or Specialized Works in order to provide specialized services.
In this regard, companies have the obligation to report on a quarterly basis to the Mexican Social Security Institute ("IMSS", per its acronym in Spanish) and the National Workers' Housing Fund Institute ("INFONAVIT", per its acronym in Spanish) service agreements which were entered into in the past four months in which services are being provided by means of a personnel subcontracting arrangement between the parties or shared services company hiring only those employees who perform activities considered complementary.
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