ARTICLE 3: SUBJECTS OBLIGED TO ACCEPT THE TRANSFER AND CARRY OUT THE RETENTION OF THE VALUE-ADDED TAX (VAT)

The Federation, the Federal District, the States, the Municipalities, the decentralized bodies, the institutions and associations of private charities, the cooperative societies or any other person (RLIVA: Art. 12) (RLIVA: Art. 13), although under other laws or decrees they do not cause federal taxes or are exempt from them, must accept the translation referred to in the first article and, where appropriate, pay the value added tax and transfer it, in accordance with the precepts of this Law.

The Federation, the Federal District, the States, the Municipalities, as well as their decentralized bodies and the public social security institutions, will have the obligation to pay the tax only for the acts that they perform that do not give cause to the payment of rights or exploitations, and they may only credit the value added tax that has been transferred to them in expenditures or paid in importation, that is identified exclusively with the activities for which they are obliged to pay the tax established in this Law or the rate applicable to them of 0%. For the reference accreditation, the requirements set forth in this Law must be met.

The Federation and its decentralized bodies will also carry out the retention under the terms of article 1 -A of this Law (LIVA: Art. 1A) when they acquire goods, use them or enjoy them temporarily or receive services, from individuals, or from residents abroad without permanent establishment in the country in the case provided for in section III of the same article. Retention will also be made under the terms of article 1 -A of this Law (LIVA: Art. 1A), in cases where the Federation and its decentralized bodies receive services of terrestrial transportation of goods provided by legal entities. The States, the Federal District, and the Municipalities, as well as their decentralized bodies shall not carry out the withholding referred to in this paragraph.

For the purposes of this tax, in addition to those indicated in the Federal Fiscal Code (Código Fiscal de la Federación), individuals or legal entities residing abroad that have one or more establishments in the country are considered residents (RLIVA: Art. 14), for all the acts or activities that they perform in them.