In September 2014, the 2014 Miscellaneous Resolution modification project was published through the Tax Authorities’ website, which includes the incorporation of an alternative for VAT refunds for investment projects.

This regulation consists in that taxpayers that carry out fixed asset investment projects (purchase or manufacturing of goods) as well as rendering of services or granting temporary use of goods related with these assets, will be able to obtain refunds for the VAT balances in favour generated due to these projects within a maximum of 40 business days for the first refund request and 20 business days for subsequent refunds, and applies to each investment project.

The established 40 day timeframe is the ordinary one granted by the Authorities for tax refunds; however the benefit for the taxpayer lies within the subsequent refunds for the duration of the project.

Generally speaking, the taxpayer will have to fulfil the following requirements:

a) The creditable VAT for the investments must represent at least 50% of the total creditable VAT filed in the monthly tax returns.

b) The balance in favour requested must be over $ 1ˈ000,000.00 pesos

c) The purchases carried out must correspond to new goods purchased or definitively imported, understanding that new goods are those that are used for the first time in Mexico.

d) The benefit will apply to projects started in January 2014.

e) File in the tax refund the information that proves the application of the investment, financial statements, photographs, plans, etc.

This benefit will not apply to:

1. Taxpayers who a re in the list of taxpayers that fail to fulfil their obligations, or in the list of taxpayers that issue apocryphal tax receipts or if the partners of shareholders are, or have been partners in another legal entity that is included in these lists.

2. Taxpa yers whose digital certificates have been cancelled or have a fine pending to be paid.

3. Taxpayers who have had refunds rejected during the last 12 months for over $ 5ˈ000,000.00 pesos or over 20% of the amount requested to be refunded.

4. Taxpayers, or their suppliers, who generate 90% of creditable VAT have not filed the informative Return for Operations with Third Parties, o if it was filed with inconsistencies or incompletely, for the period for which the refund is being requested.

Filing the refund request through this process does not guarantee the taxpayer a favourable resolution, the Authorities will have to analyse the information and, if necessary, they may request additional information from the taxpayer