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eBS 12.2 New Mexican Government Law of Tax Changes Regarding 6% WHT On Service Suppliers (Doc ID 2707039.1)

Last updated on SEPTEMBER 10, 2020

Applies to:

Oracle Financials for the Americas - Version 12.2.4 and later
Information in this document applies to any platform.

Goal

On : 12.2.4 version, Americas Globalization Payables

Can setup be made of TAX(es) if Companies Supply the Goods and Services at same time?

Need a solution in EBS 12.2 for new Mexican tax changes regarding 6% WHT on service suppliers

The Mexican Secretariat for Home Affairs is introducing tax reform changes in 2020, including a requirement for a new 6% withholding on service suppliers.

Starting in 2020, taxpayers must withhold a 6% VAT on payments related to services, which include the procurement of personnel, even if their duties:

(1) are carried out through a contractor’s offices or a related-party entity; and

(2) If the the services are (or not) performed under the direction, supervision, coordination or dependence of the contracting party. The name or type of the contractual obligation does not affect whether the 6% VAT applies.

The withholding and remittance of the VAT to the Mexican tax authorities is required for the entity to credit the VAT paid and deduct the expense. Furthermore, taxpayers acting as withholding agents will be jointly liable for the VAT.

Has Oracle plans to have a solution for this new tax requirement suitable for EBS 12.2?

Solution

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