Specialist urges extension for the law on outsourcing in Mexico

Note published on July 23 in El Siglo.mx, Finanzas [Finance] Section, by Fabiola P. Canedo.
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Note published on July 23 in El Siglo de Torreón, Finanzas [Finance] Section by Fabiola P. Canedo.
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Note published on July 22 in El Siglo de Durango, Finanzas [Finance] Section, by Fabiola P. Canedo.
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Note published on July 22 in El Siglo de Coahuila, Dinero [Money] Section by Fabiola P. Canedo.
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Note published on July 22 in Notimundo, Noticias [News] Section, by the Editorial Department.
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Faced with the entry into force of the reform on subcontracting as of the month of August, an extension to the term in tax matters is seen as necessary, in order to allow companies to adapt to the new provisions.

“The extension that is proposed is in regard to the application of the regulations of the Federal Tax Code, of the Income Tax Law and of the Value Added Tax Law, covered in Articles 4, 5 and 6 of the executive order. Because the labor aspect is already in force since the day after its publication”, explained Óscar de la Vega, lawyer.

An executive order that amended and added several provisions with the objective of transforming the labor subcontracting regime to prevent employers from eluding compliance with obligations of a labor, social security and tax nature through these schemes was published on April 23 of this year in the Official Gazette of the Federation (DOF).

The proposed one-month extension would be limited to the tax aspect which, instead of entering into force on August 1, 2021, would be in force as of the first day of September.

“An extension is necessary, but not a month-long one, one month is only a palliative; the public sector was given one year for an implementation, while the private sector is only being granted 3 months. In terms of equity, companies should be allowed to comply within a reasonable period of time which would surely be, as a minimum, until the end of December of this year”, said De la Vega.

In accordance with the provisions of the first paragraph of Article 15 of the Federal Labor Law, an indispensable requirement for subscribing in the Registry of Providers Specialized Services or Specialized Works (REPSE) is that natural persons or entities accredit being up to date in their tax obligations.

Additionally, in a complementary manner, Article 15-D of the Federal Tax Code establishes the possibility of having tax effects of deduction of payments or considerations for subcontracting of specialized services or for the executions of specialized works.

“We are receiving many questions made by companies because a contradiction has been noticed between what is said in the text of this law in Article 12, when it establishes that personnel subcontracting has been prohibited and in the bases for the registration of natural persons or entities to enable them to provide specialized services and that, to this end, provide or place their own workers for the benefit of another for the provision of services or the execution of specialized works”, explained the labor lawyer.

Companies perfectly understand the elimination of personnel outsourcing, they are transferring employees from their own service providers to the operating companies, “now there is a topic of commercial or civil activities or relationships that are alien to a labor reform, where companies do not know in which direction to comply and it would be worthwhile to have specific and objective regulations”, he explained.


The reform on subcontracting could have an extension of the deadline for companies to comply with the necessary adjustments; together with this it is necessary to have public and information mechanisms that bring transparency on the results and dispel questions within the private sector.

Héctor Márquez, director of Institutional Relationships at Manpower, said that up to this time, there is no public tool that monitors the IMSS [Mexican Social Security Institute] numbers regarding which are the changes that employment has undergone in Mexico as a consequence of the reform on subcontracting.

He pointed out that, with the limit established by the reforms approved in April, the effects of the reform itself will become noticeable in September, once the transition periods have concluded. It is complicated for companies to construct a whole apparatus to manage a thousand, hundreds or dozens of employees, because they have to be registered with the IMSS, companies must have a different payroll and administrative system and many things that raise administration expenses need to be done, particularly in the case of a medium-sized or a large company.

He said that, together with the possible extension of the terms, an information campaign will be necessary in upcoming months to enable companies to understand how the new provisions in regard to contracting Specialized Services matters, which have to comply with the new rules, will operate.