INCOME TAX.- GENERAL RULES OF SALES COST.- In accordance with section III from the second Title of the Income Tax Law, for sales cost two types of tax payers are foreseen: I) Those dedicated to commercial activities that consist in the acquisition and sale of merchandise; and II) Those dedicated to other commercial activities different to the acquisition and sale of merchandise. The tax payers dedicated to commercial activities that consist on the acquisition and sale of merchandise should consider within the sales cost, the following concepts: the amount of the acquired merchandise, minus the returned amount, by discounts and premiums of said merchandise, done in the fiscal year, whilst adding the incurred expenses need to acquire and leave the merchandise in selling conditions. In contrast, the legal entities involved in other commercial activities should consider the following: 1) The acquisition of raw material, semi-finished products or finished products, minus the returns, discounts and premiums of said merchandise, preformed during the fiscal year; 2) The payments acquired by providing personal and subordinated services, directly related with the production of goods or the service being provided, and 3) The discounted net expenses, refunds or premiums directly related to the production of goods or the providing of a service, as well as the investment deductions directly related to the production of merchandise or the provision of services, up to the maximum deductible percentage allowed by the Law, when the deduction was not done immediately. Finally, for the construction and application of the sales cost the Financial Information Rules are needed to be taken into account, as stated by the First Chamber of the Supreme Court of National Justice in the enforceable judgment sustained that derived from the jurisprudence 1a./J. 118/2007: “[…] since we must not lose sight of the concepts and procedures mentioned in the legal text, which constitute the guidelines and parameters to be observed by the tax authority and the taxpayer, were foreseen in Bulletin C-4 Inventories, of the Generally Accepted Accounting Principles […] thus, the contents of the Bulletin C-4 a series of technical rules and criteria or parameters are given to keep the accounts of a business, in the inventory item, which are emitted by the Accounting Principles Commission of the Mexican Institute of Public Accountants, with the purpose of establishing guidelines that adequately orient the analysis and consultation of the financial information in benefit of the business -administration, planning, direction, control and financial resources.- In this situation, the principles being referenced are parameters or guidelines to follow, that are derived form the legal obligation of the corporations to perform financial accounting, a technique which its application requires specialized knowledge of the specific matter, consequently said principles guarantee, on one hand, general and uniform financial information, and on the other, security to the tax payer the moment they deduct the sales cost and determine the rights and obligations within the legal framework”.

Contentious Administrative Proceeding No. 2060/16-06-02-5/733/18-S2-07-04.- Solved by the Second Chamber of the Superior Chamber of the Federal Court of Administrative Justice, in session of August 21, 2018, by unanimity of 5 votes in favor: Reporting Judge: Magda Zulema Mosri Gu


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