Incorrect Transfer of Tax Losses


On June 1st, 2018, several amendments to the Federal Fiscal Code have been approved by the Federal Executive with respect to the transfer of tax losses. In this regard, a new anti-abuse rule regarding the transfer of tax losses was added to the Code in the context of business restructures.

In this scenario, the approved legislation establishes that where tax losses have been generated pursuant to certain regulated scenarios and the tax loss generating entity is part or a business restructure or change of shareholders in such a way that the entity entitled to offset said losses ceases to be part of the original group, then the right to offset such losses may be challenged by the tax authorities absent proof of non-tax related motives.

It is expected that the authority will notify electronically to the taxpayers who obtained the tax losses, in order to allow them to submit evidence to revert the observation of the authority.

Taxpayers who do not detract from the observations of the authority will be listed on the website of the Tax Administration Service and in the Official Gazette of the Federation, in order to disallow the offset of the losses and correct their tax situation.

We believe that this amendment is not as specific as it should be, it may cover situations that do not necessarily constitute an irregular activity of the taxpayers, but a consequence of their normal business activity.

We recommend our clients and friends to review the origin and application of tax losses, to avoid falling in the cases detailed for in the new article 69-B Bis or, where appropriate, document correctly the origin of the loss and its business reason.





Gerardo Nieto
Gil Zenteno
Alejandro Barrera
Victor Barajas


Mexico City, June 4th, 2018.