4. Trends and Specific Cases
a. New or Expected Developments
Recently, the tax authorities try to characterize all independent contractor agreements where services were rendered by a third party with its own workers, as an outsourcing contract. In doing so, the tax authorities ignored the fact that an outsourcing contract implies the supervision and specification of the tasks to be performed by the employees of the subcontractor, and that there are other contracts that the independent contractor performs with its own workers and not under the supervision of the person receiving the services.
This criterion by the tax authorities has serious implications regarding VAT accreditation when not all the conditions set forth in article 15-A of the FLL are met, resulting in the beneficiary being considered as the employer of the subcontractor’s workers. Therefore, the tax authorities deem this contract to be a labour agreement rather than a commercial or civil agreement between the subcontractor and the contractor, as set out in the following Federal Courts decision:
“The Supreme Court of Justice has established binding jurisprudence to the effect that notwithstanding the strict interpretation of tax laws as provided in article 5 of the Federal Fiscal Code, does not preclude other methods to interpret the actual intent of the legislator when its literal analysis leaves to doubt. Consequently, the concept of ‘subordination’ in article 14, last paragraph of the VAT Law that establishes that the rendering of independent services performed by a person in a subordinated condition receiving a remuneration excludes the payment of said tax since it coincides with the definition of a labour relationship as provided in the Federal Labour Law, this leads to the conclusion that in the specific case of determining whether the personnel subcontracting is of labour nature or of independent nature, it will be important to refer to article 15-A of the Labour Law considering that this provision establishes the conditions to determine whether there is an actual subordination of the worker to the contractor, important situation to determine the application of the tax law. Conse-quently, if not all the requirements provided for in article 15-A are met, the contractor will be considered employer for all legal effects and no VAT will be caused, thus the contractor has no right for its accreditation…”
b. Recent Amendments to the Law
Rules and regulations of the Tax Code for 2017 include amendments to the provisions of the ISR and VAT Laws, which require the contractor to obtain from the subcontractor, certain documents related to the payment of salaries and social security obligations to the latter’s employees, in order for the contractor to be able to deduct the ISR or accredit the VAT.