The oil industry was integrated by a state monopoly (PEMEX), which was in charge of the exploration, extraction and transformation of hydrocarbons, functions it performed from 1938 to 2008. This, together with other factors related to the internal functioning of the state-owned company, caused the national hydrocarbons industry to lag behind and be at a disadvantage compared to the world market.
As of 2008 and prior to the energy reform, PEMEX opened some activities to the private sector, which it held exclusively, such as the exploration and extraction of hydrocarbons, thus allowing them to participate in association with the now State-owned productive company, and created the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos).
One of the substantial modifications carried out with the energy reform of December 20, 2013 consisted in eliminating the monopoly of the Mexican government with respect to the activities of exploration and extraction of hydrocarbons and with this, allowing through the assignment to PEMEX of various contractual areas that were not part of the rounds organized by the State, as well as, the execution of shared utility contracts, shared production, licenses and services. With the above, the Mexican State would obtain income for the long-term development of the nation, being necessary to clarify that the ownership of hydrocarbons belongs to the Mexican State at all times.
However, since August 2014, the specific secondary legislation on hydrocarbons began to be published, and obviously the respective amendments to the existing legislation, which was related to the regulation of the hydrocarbons industry, ranging from exploration, marketing and distribution of finished products.
It is for this reason that the creation of secondary laws and their regulations regulated the income regime of the Mexican State for hydrocarbon exploration and extraction activities that would be carried out through the execution of contracts and assignments.
Based on the above, the Energy Sector Coordination Council was created, which, among other agencies, added powers to the Ministry of Finance and Public Credit and its decentralized body, the Tax Administration Service.
Among the powers granted by the energy reform to the Tax Administration Service are the following:
- To collect customs tax resources.
- Verify the operations arising from the contract, through audits.
Powers that were granted in the Internal Regulations of the Tax Administration Service published in the Official Gazette of the Federation on August 24, 2015, and which, if applicable, would be carried out by the different administrative units and the digital mechanisms for communication with taxpayers (tax mailbox).
As for the substantive tax-energy functions, these are concentrated in the General Administration of Hydrocarbons, and are focused on the collection of federal taxes from the subjects related to hydrocarbons, overseeing the correct application of tax legislation, undertaking actions related to voluntary compliance with tax obligations, all with the purpose of helping to finance public spending.
The entities (state-owned productive enterprises) and subjects (individuals or legal entities) that make up the registry on which the General Hydrocarbons Administration of the Tax Administration Service relies, are mainly comprised of the following:
- Assignees
- Contractors
- Specialized finance vehicles
- Entities with a preponderant activity of surface reconnaissance and exploration or exploration and extraction of hydrocarbons.
In addition to the foregoing, the laws, regulations and other provisions that were issued in connection with hydrocarbons were, among others:
- Law of Hydrocarbons
- Law of Income on Hydrocarbons
- Regulation of the Hydrocarbons Income Law
- Regulation of the Hydrocarbons Law
- Regulation of the Activities referred to in Title Third of the Hydrocarbons Law.
- Federal Revenue Law.
- Agreements between the United Mexican States and the United States of America relating to Transboundary Hydrocarbon Fields in the Gulf of Mexico.
- National Energy Control Center and Natural Gas Control Center.
- Mexican Petroleum Fund for Stabilization and Development. Incorporation Agreement signed by the Bank of Mexico, the Ministry of Energy and the Ministry of Finance and Public Credit.
- Funds to Promote the Development of Suppliers and Contractors, SENER-NAFINSA for the participation of the Mexican State in hydrocarbon production projects.
- General Administrative Provisions regarding Authorizations for the Recognition and Surface Exploration of Hydrocarbons.
The aforementioned provisions and others related to hydrocarbons have a direct influence on the determination of taxes collected by the Tax Administration Service.
Due to the scope of the subject, this article is divided into two parts, and will be concluded in the next issue of the magazine.
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