On June 13, 2009, the Mexican Tax Administration Service ("SAT" for its abbreviation in Spanish) published on its website the reference parameters for effective income tax rates for large taxpayers, with respect to various economic activities for the following sectors: mining, manufacturing industries, wholesale trade, retail trade and financial and insurance services.

It is important to remember that the effective income tax rate is determined by dividing the amount of the income tax incurred by the taxable income for the year in question.

This publication is related to the amendment to Article 33 of the Federal Tax Code, which came into effect in 2021, whereby SAT was empowered to inform taxpayers of the parameters of effective rates, so that they can comply with greater certainty with their income tax obligations.

In order to do so, SAT allocated taxpayers that carried out, during the same fiscal year, the same economic activity and subsequently calculates the effective tax rate, setting a parameter for each of the economic activities.
 
In this way, as in this case, it discloses such parameters by fiscal year and by activity, so that taxpayers can compare their own effective tax rate for a fiscal year with the parameters published by SAT.

Such comparison will allow taxpayers to determine whether or not there is a "tax risk" in their case; that is, a contingency in the compliance of their income tax obligations.

Thus, the higher the effective rate of a taxpayer compared to the parameters published by the SAT, the lower the existing tax risk. 

Conversely, the lower the effective rate of a taxpayer compared to the published parameters, the higher the tax risk.

Thus, the SAT recommends those taxpayers whose effective tax rate is lower than the published parameters to self-correct their tax situation by filing supplementary returns that take into account those situations that could have contributed to a lower taxation, such as tax planning, business restructurings, improper deductions, operations with EFOs, among others.

It is important to note that the SAT may directly inform taxpayers of the existence of tax risks based on the published parameters, without this implying the initiation of the exercise of its verification powers. 

It is estimated that in the course of 2021 the parameters for other economic activities will be published.