ARTICLE 5B: ADDITIONAL OPTION TO CREDIT VALUE-ADDED TAX (VAT) FOR TAXED AND NON-TAXED ACTIVITIES

Taxpayers, instead of applying the provisions of article 5, section V, subsections c) and d), numeral 3 and article 5-A of this Law (LIVA: Art. 5) (LIVA: Art. 5A), they may accredit the value added tax that has been transferred to them when making expenditures for the acquisition of goods, acquisition of services or for the temporary use or enjoyment of goods or the one paid in their importation, in the amount resulting from applying to the aforementioned tax the proportion that the value of the activities for which the tax should be paid or to which the 0% rate is applied, corresponding to the calendar year immediately preceding the month for which the creditable tax is calculated, represent in the total value of the activities, carried out by the taxpayer in said calendar year. (RLIVA: Art. 16) (RLIVA: Art. 17) (RLIVA: Art. 22A)

During the calendar year in which the taxpayers initiate the activities for which they must pay the tax established by this Law and in the following, the applicable proportion in each of the months of said years shall be calculated considering the values ..mentioned in the paragraph above, corresponding to the period from the month in which the activities began and until the month for which the creditable tax is calculated. In the case of investments, the creditable tax will be calculated taking into account the proportion of the mentioned period and an adjustment must be made in the twelfth month, counted from the month immediately after that in which the taxpayer initiated activities, in accordance with the rules of general character that the Service Tax Administration (Servicio de Administración Tributaria) issued for that purpose. For this, the proportion corresponding to the period of the first twelve months of activities of the taxpayer must be considered, which will be compared with the proportion initially applied to the tax transferred or paid in the importation of the investment made. If there is a modification of more than 3%, said accreditation must be adjusted as follows:

The update referred to in sections I and II of the preceding paragraphs shall be calculated by applying the update factor obtained in accordance with article 17-A of the Federal Fiscal Code (Código Fiscal de la Federación). (CFF: Art. 17A)

The refund or increase of the accreditation, which corresponds in accordance with sections I and II of the second paragraph of this article, as appropriate, must be made in the month in which the adjustment of the accreditation referred to in that paragraph, in accordance with the general rules issued for this purpose by the Service Tax Administration (Servicio de Administración Tributaria).

Taxpayers who exercise the option provided for in this article must apply it in respect of all expenditures for the acquisition of goods, acquisition of services or for the temporary use or enjoyment of goods, which are used interchangeably to carry out the activities for which they are due or not to pay the value added tax or to which the 0% rate is applied, in a period of sixty months, counted from the month in which the accreditation was made under the terms of this article.

To investments whose accreditation has been made in accordance with the provisions of article 5, section V, subsection d), number 3 of this Law (LIVA: Art. 5), the procedure established in this article will not be applicable.