Lectures > REPSE and Specialized Services: Compliance Mistakes That Continue to Cost Companies.

When Mexico’s outsourcing reform came into effect in April 2021, it fundamentally transformed the country’s labor and tax landscape.

Five years later, most companies have made adjustments to adapt to the new regulatory framework.

However, our experience shows that partial compliance remains one of the most common risks.

Under the current legislation, incomplete compliance can result in consequences similar to those of complete non-compliance.

What Did the Reform Actually Change?

The reform did not eliminate the use of service providers or contractors.

Instead, it redefined the conditions under which these arrangements may legally operate.

Today, only specialized services or specialized projects are permitted when they:

• Are not part of the contracting company’s corporate purpose.
• Are not related to its primary business activity.
• Comply with all applicable legal requirements.

Failure to comply may result in significant tax and labor consequences for both service providers and contracting companies.

REPSE: Where Most Compliance Issues Still Occur

One of the reform’s fundamental pillars is the Registro de Prestadoras de Servicios Especializados u Obras Especializadas (REPSE).

Any company providing specialized services must maintain a valid REPSE registration and renew it every three years.

In practice, the most common compliance failures continue to include:

• Hiring service providers with expired or invalid REPSE registrations.
• Failing to renew REPSE registration on time.
• Holding a REPSE registration that does not correspond to the services actually provided.

Under these circumstances, the contracting company may lose the ability to deduct the related expenses for income tax purposes and may also lose the right to claim the corresponding VAT credits.

The Requirement Many Companies Still Overlook

One of the least understood aspects of the reform is the mandatory four-month information exchange between the service provider and the client.

The service provider must demonstrate compliance with its tax, labor, social security, and Infonavit obligations concerning the employees assigned to provide the services.

The contracting company, in turn, must:

• Receive the required documentation.
• Review it carefully.
• Maintain it as part of its tax records.

This is not simply an administrative procedure.

It is an essential requirement for preserving the tax benefits associated with specialized services.

Corporate Groups Must Also Comply

Many businesses mistakenly believe that services provided between companies within the same corporate group are exempt from these obligations.

They are not.

Intragroup arrangements must also comply with the outsourcing reform whenever specialized services are involved.

This requires properly documenting the transactions, structuring the agreements correctly, and maintaining a valid REPSE registration whenever applicable.

The SAT Continues to Strengthen Enforcement

Since the reform took effect, the SAT has expanded its audit and enforcement capabilities through:

• Cross-checking information between REPSE records and tax filings.
• Audits focused on transactions involving non-compliant service providers.
• Electronic tools designed to detect inconsistencies in payments for specialized services.

The tax authority has made its position clear: responsibility for verifying compliance does not rest solely with the service provider, but also with the company receiving the services.

The Right Time to Review Your Compliance

If your company has not recently reviewed its specialized outsourcing arrangements, now may be the right time.

Key areas to evaluate include:

• Confirming that all service providers maintain valid REPSE registrations covering the contracted services.
• Ensuring all four-month compliance documentation has been properly collected and retained.
• Verifying that service agreements accurately reflect the nature of the specialized services provided.
• Confirming that intragroup arrangements satisfy all applicable legal and tax requirements.

A proactive review can reduce tax risks, strengthen compliance, and provide greater certainty in the event of a future tax audit.