Issue #
July 2008

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Decree Amending Provisions of the Public Sector Procurement, Leasing and Services Law

July 17, 2008

On July 2, 2008, a Decree Amending and Adding various Provisions to the Public Sector Procurement, Leasing and Services Law was published in the DOF. The new provisions incorporate “subsequent offers of discount” (oferta subsecuente de descuento) into the Law, which is used in public bidding by bidders who carry out one or more subsequent discounts to improve the prices they initially offered. However, the possibility of offering a subsequent discount must be specifically contemplated in the original bidding documents issued by Mexican federal agencies and offices, as it is not possible to change the specifications or characteristics originally contained in a technical proposal, such as an offer of discount mentioned above. Based on the new reform, Mexico’s federal agencies will be able to acquire goods and services in a more economical manner.

Cash Deposits Tax Enters Into Force

July 17, 2008

On July 1, 2008, the Cash Deposits Tax (Impuesto a los Depósitos in Efectivo or IDE) entered into force, as a result of being approved last year as part of the fiscalreform package proposed by President Felipe Calderon. The IDE imposes a tax of 2% on cash deposits made during each month by individuals and entities if the total deposits during such monthly period exceed 25,000 pesos, with the understanding that the tax will be imposed on all bank accounts held by taxpayers in other banking institutions. The IDE will be consolidated by banking institutions at the end of each month on a designated cutoff day in order to make corresponding calculations, and, within a term of 12-15 working days, report such to the Mexican Department of Finance and Public Credit (Hacienda or SHCP). The IDE will tax only those deposits made in cash, so that deposits made by electronic transfers, account transfers and checks will not be included. It is hoped that the IDE will bring into Mexico’s tax system those businesses that handle high volumes of cash, such as restaurants, self-service stores and services provided to the general public. It is expected that soon after enactment of the IDE, a number of taxpayers will present formal protests to the next tax.

Constitutional Reforms in the Criminal Justice Area

July 17, 2008

On June 18, 2008, constitutional reforms to Mexico’s criminal justice system were published in the Official Journal of the Federation (DOF). One should consider thatsuch reforms follow the general outline of the criminal justice system in the United States and, without doubt, are designed to be an effort to modernize Mexico’scriminal justice system. The central elements of the reform are ten constitutional articles containing changes in the written system of administering and impartingcriminal justice in Mexico, to an oral system that expressly establishes the presumption of innocence under Mexican law. The reforms contemplating a change to an oral criminal justice system suppose the need to completely reform the way prosecutors (ministerios publicos), judges and attorneys perform their roles in the legal system. For this reason, a transitory article provides a term of eight years for the Mexican federal government and Federal District to issue and put into force the necessary amendments to existing laws or new laws to be incorporated into the new procedures system proposed under the reforms. Some states, such as Nuevo Leon, Chihauhua, the State of Mexico and Oaxaca have already implemented oral criminal justice systems.