Law Of Incomes Of Hydrocarbons

Original Language Title: Ley de Ingresos sobre Hidrocarburos

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EXECUTIVE BRANCH

SECRETARY OF FINANCE AND PUBLIC CREDIT

DECREE issued by the Law of Revenue on Hydrocarbons, are reformed, added and repealed various provisions of the Federal Law of Rights and the Law of Fiscal Coordination and the Law of the Mexican Fund of the Oil for Stabilization and Development.

On the sidelines a seal with the National Shield, which reads: United Mexican States.-Presidency of the Republic.

ENRIQUE PEÑA NIETO, President of the United Mexican States, to its inhabitants known:

That the Honorable Congress of the Union, has served to address the following

DECREE

"THE GENERAL CONGRESS OF THE UNITED STATES MEXICANS, DECREES:

THE HYDROCARBON REVENUE LAW IS EXPECTED TO BE REFORMED, ADDED AND REPEALED VARIOUS PROVISIONS OF THE FEDERAL LAW OF RIGHTS AND THE TAX COORDINATION LAW AND THE MEXICAN PETROLEUM FUND LAW FOR STABILIZATION AND DEVELOPMENT IS ISSUED

ARTICLE FIRST. The Revenue on Hydrocarbons Act is issued.

HYDROCARBON REVENUE LAW

TITLE FIRST

GENERAL PROVISIONS

Article 1.- This Law is in public order and aims to set:

I.               The income regime that the Mexican State will receive from the Exploration and Extraction of Hydrocarbons activities carried out through the Allocations and Contracts referred to in Article 27, paragraph seventh, of the Political Constitution of the United Mexican States and the Law of Hydrocarbons, as well as the Contrabenefits to be established in the Contracts;

II.              The provisions on the administration and supervision of the financial aspects of the Contracts, and

III.             The obligations in terms of transparency and accountability in respect of the resources referred to in this order.

Article 2.- Without prejudice to the other tax obligations of the Contractors and the Allocated, the Mexican State will receive income from the activities of Exploration and Extraction of Hydrocarbons as follows:

I.               By Contract, the State-established Contrabenefits in each Contract in accordance with this Law;

II.              By Assignment, the rights referred to in the Third Title of this Law, and

III.             The income tax that is caused by the Contractors and Assigned by the activities they perform under a Contract or an Assignment.

The income referred to in fractions I and II of this article shall be received by the Mexican Petroleum Fund, as indicated in this Law, in each Contract and in the other applicable provisions. Such income is excepted from the concentration rules contained in the Revenue Act of the Federation of the fiscal year concerned and other applicable legal provisions.

Article 3.- For the purposes of this Law, the definitions contained in Article 4 of the Hydrocarbons Act, as well as the following, shall apply in singular or plural form:

I.               Barrel: unit of measure equivalent to a volume equal to 158.99 litres at a temperature of 15.56 degrees Celsius;

II.              BTU: British thermal unit, represents the amount of energy needed to raise the temperature of a pound of water (0.4535 kilograms) to a degree Fahrenheit (0.5556 degrees Celsius), under normal atmospheric conditions;

III.             Trader: he who contracts the National Hydrocarbons Commission, at the request of the Mexican Petroleum Fund, to provide the Nation with the service of the commercialization of Hydrocarbons that the State receives as a result of a Contract;

IV.            Condensates: Natural Gas liquids consisting mainly of pentanes and heavier hydrocarbon components;

V.             Counterbenefit: that which is established in each Contract in favour of the State or the Contractor;

VI.            Contract: Contract for Exploration and Extraction;

VII.           Contractual fee for the Exploratory Phase: the Contraservice that is established in accordance with Article 23 of this Law;

VIII.          Mexican Petroleum Fund: the Mexican Petroleum Fund for Stabilization and Development;

IX.            Cost Recovery Limit: the result of multiplying the Cost Recovery Percentage by the Contractual Value of Hydrocarbons. The product of such multiplication shall determine the maximum proportion of the Contractual Value of the Hydrocarbons that may be allocated in each Period to the recovery of costs;

X.             Adjustment Mechanism: formula established by the Secretariat in each Contract, which, based on the profitability in each period of the Contractor, increases the Contrabenefits in favor of the State, by modifying some of the parameters that determine the Contract Benefits of the Contract. The implementation of the Adjustment Mechanism is intended to ensure that the Mexican State captures the extraordinary profitability that, if any, is generated by the Contract;

XI.            Period: Calendar month.

When activities are performed in a period that does not include a full calendar month, the period will be the number of days the Contract was actually operated;

XII.           Percentage of Cost Recovery: a percentage that the Secretariat will fix in the bidding bases, as well as in the migration of areas under Assignment to the Contract Schemes, for each Contract that contemplates the recovery of costs;

XIII.          Contractual price of the Condensates: the Price of the Condensates produced in the Contractual Area, in dollars of the United States of America by Barril, which is determined each Period at the Point of Measurement, in terms of the Article 25 of this Law, in accordance with the mechanisms provided for in each Contract;

XIV.          Contract Price of Natural Gas: the Price of Natural Gas produced in the Contractual Area, in United States dollars of America per million BTU, that is determined each Period at the Point of Measurement, in terms of the Article 25 of this Law, in accordance with the mechanisms provided for in each Contract;

XV.           Contractual price of the Petroleum: the Price of the Petroleum produced in the Contractual Area, in dollars of the United States of America by Barril, that is determined each Period in the Point of Measurement, in terms of the Article 25 of this Law, in accordance with the mechanisms provided for in each Contract;

XVI.          Contractual Production: the Hydrocarbons Extracted in the Contractual Area, measured in accordance with the provisions of the National Hydrocarbons Commission at the Measurement Point, in the appropriate Period;

XVII.         Measurement Point: point determined in accordance with what is established in each Contract, where it will take place:

a) The measurement of each type of Hydrocarbon extracted under the Contract in accordance with the provisions to be issued by the National Hydrocarbons Commission, and

b) The determination of the contractual prices of each type of Hydrocarbon, in terms of the provisions Article 25 of this Law;

XVIII.        Regalia: Contrabenefit in favor of the Mexican State determined on the basis of the Contractual Value of Natural Gas, the Contractual Value of the Condensates or the Contractual Value of Petroleum, as indicated in Article 24 of this Law;

XIX.          Secretariat: the Secretariat of Finance and Public Credit;

XX.           Operating Utility: the result of decreasing to the Hydrocarbon Contractual Value the concepts specified in this Law for each of the types of Contract referred to therein, corresponding to each Period;

XXI.          Contractual value of the Condensates: it is the result of multiplying, in the period in question: i) the Contractual Price of the Condensates by ii) the volume of the condensates in Barriles, at the Point of Measurement of the Area Contractual;

XXII.         Contractual value of the Hydrocarbons: the sum of the Contractual Value of the Oil, the Contractual Value of Natural Gas and the Contractual Value of the Condensates;

XXIII.        Contractual value of Natural Gas: is the result of multiplying, in the period in question: i) the Contractual Price of Natural Gas by ii) the volume, in millions of BTU of Natural Gas, in the Point of Measurement of the Contractual Area, and

XXIV.       Contractual value of the Oil: is the result of multiplying, in the Period in question: i) the Contractual Price of Oil by ii) the volume of Oil in Barrels, in the Measurement Point of the Contractual Area.

TITLE SECOND

OF CONTRACT REVENUE

CHAPTER I

OF CONTRACTS FOR CONTRACTS

Article 4.- The benefits to be established in the Contracts shall be calculated and delivered to the State and the Contractors in accordance with the mechanisms provided for in each Contract, following the rules and bases outlined in this Law.

The payment to the Mexican State of the Contrabenefits to be established in the Contracts does not exempt the Contractors from the fulfillment of the tax obligations established in the the Income Tax Act and other tax provisions.

Article 5.- The Secretariat will publish, within the first 15 calendar days of each year, a report setting out the ranges of economic terms it will consider to be included in the tender bases for the year concerned. The Secretariat may only consider securities outside these ranges where market and industry conditions have been modified, which shall be justified in scope for the annual report. The report and its scope should be published on the Secretariat's website.

First Section

Of The Benefits in License Contracts

Article 6.- The License Contracts will set the following Contracapabilities:

A.             For the State:

I.               A bonus to the firm;

II.              The Contractual Fee for the Exploratory Phase;

III.             Royalties, determined pursuant to Article 24 of this Law, and

IV.            A Contrabenefit to be determined in the Contracts considering the application of a rate to the Contractual Value of Hydrocarbons.

B.             In favor of the Contractor, the onerous transmission of the Hydrocarbons once extracted from the subsoil, provided that, in accordance with the terms of the Contract, the current is found in the fulfilment of the obligations mentioned in the Previous section A.

Article 7.- The signature bonus referred to in Article 6 (A) of this Act shall be determined by the Secretariat for each Contract and its amount, as well as its conditions of payment, shall be included in the basis of the invitation to tender for their award or in the contracts resulting from a migration. This bonus will be paid in cash by the Contractor to the Mexican State through the Mexican Petroleum Fund.

Article 8.- The Contrainsabilities referred to in Sections II, III and IV of Article 6 (A) of this Law shall be paid in cash by the Contractor to the Mexican State, in each Period as set out in the Contract.

Article 9.- In the migration of areas under Allocation to the License Agreement scheme in terms of the Hydrocarbons Act, the Secretariat will determine the economic terms refers to Article 6 (A) of this Law, taking care that the income over time for the State is not less than those obtained under the original Assignment.

Article 10.- For the purpose of allowing the Mexican State to capture the extraordinary profitability generated by the Extraction of Hydrocarbons, the rate at which it is Article 6 (A) of this Law shall be amended by means of the Adjustment Mechanism which shall be included in the Contract and at the basis of the tender for the award of the contract or the contracts resulting from a contract. migration.

Section Second

Of the Contracapabilities in Shared Utility and Shared Production Contracts

Item 11.- Shared Utility Contracts will set the following Contracapabilities:

I.               In favor of the Mexican State:

a) The Contractual Fee for the Exploration Phase;

b) The Royalties determined pursuant to Article 24 of this Law, and

c) A Capability to be determined by the application of a percentage to the Operational Utility, and

II.              In favor of the Contractor:

a) Recovery of costs, subject to the provisions of Article 16, and

b) A Delivery that will be the remnant of the Operational Utility after covering the Contrainability in favour of the State referred to in the (c) of the above fraction I.

In the shared utility contracts, the Contractors will deliver the entire Contractual Production to the Marketer, which will deliver the proceeds from the marketing to the Mexican Petroleum Fund.

The Mexican Petroleum Fund will retain the Contrabenefits that correspond to the State, and will pay to the Contractor the Contrabenefits that correspond to each Period in accordance with the is flagged in the Contract.

Article 12.- Shared Production Contracts will set the following Contracapabilities:

I. For the Mexican State:

a) The Contractual Fee for the Exploration Phase;

b) The Royalties determined pursuant to Article 24 of this Law, and

c) A Capability to be determined by the application of a percentage to the Operational Utility, and

II. In favor of the Contractor:

a) Recovery of costs, subject to the provisions of Article 16, and

b) A Delivery that will be the remnant of the Operational Utility after covering the Contrainability in favour of the State referred to in the (c) of the above fraction I.

According to the nature of the shared production contracts, the Contrabenefits established in the second part of this article will be paid to the Contractor in kind, with one Proportion of the Contractual Production of Hydrocarbons that is equivalent to the value of such Contrabenefits. In the same way, the State shall be provided with the benefits provided for in part I, points (b) and (c) of this article.

The State will determine in the Contract the Contrabenefits that the Contractor will have to deliver in kind to the Marketer, which will deliver the proceeds of its marketing to the Mexican Petroleum Fund in each Period, as indicated in the Contract.

Article 13.- In the shared production contracts, it may be chosen not to include the Contrabenefit corresponding to the recovery of costs, without prejudice to the obligations on your registration in terms of the Contract.

Article 14.- In the migration of areas under Assignment to the Shared Utility Contract or Shared Production Schemes, in terms of the Hydrocarbons Act, the Secretariat determine the economic terms referred to in Articles 11 and 12 of this Law, taking care that the income over time for the State is not less than those obtained under the original Assignment.

Article 15.- For the purpose of allowing the Mexican State to capture the extraordinary profitability generated by the Extraction of Hydrocarbons, the percentage to which Articles 11, part I, point (c), and 12, fraction I, point (c), of this Law shall be amended by means of an Adjustment Mechanism, which shall be included in the basis of the tender for the award of the Contract or in the Contracts that are result of a migration.

Article 16.- The cost recovery allowance referred to in Articles 11, fraction II, point (a), and 12, part II, point (a) of this Law shall be the amount equivalent to the costs, expenses and investments recognized in accordance with the guidelines that the Secretariat will issue for this purpose. In each Period, this Contract will not be greater than the Cost Recovery Limit.

The costs, expenses and investments recognized that are not paid in the Contraperformance corresponding to the recovery of costs as a result of the application of the Recovery Limit In the Period in question, they will be moved to be included in the Contrabenefit corresponding to the recovery of costs of subsequent Periods.

For the purposes of this article, it shall not be possible to recognize or record the concepts outlined in fractions I to XV of Article 19 of this Law.

Article 17.- The Operating Utility will be determined each Period and will be the result of decreasing the Contractual Value of Hydrocarbons the following concepts:

I.               The amount of Royalties effectively paid by the Contractor in the Period, and

II.              The Contrabenefit corresponding to the recovery of costs determined in accordance with Article 16 of this Law.

Article 18.- When Contractors use goods that have been partially or wholly deducted in another Contract or under the Third Title of this Law, they may only be recognized. for the purposes of the Contract the outstanding balance of the goods corresponding to that Contract in terms of the guidelines issued by the Secretariat.

Article 19.- For the purposes of section II of Article 17 of this Law, the following concepts cannot be deduced:

I.               The financial costs;

II.              The costs incurred through negligence or fraud by the Contractor or persons acting on behalf of the Contractor;

III.             The donations;

IV.            Costs and expenses by way of easements, rights of way, temporary or permanent occupations, leases or acquisition of land, indemnities and any other analogous figure, deriving from the provisions of the article 27 and Chapter IV of Title IV of the Hydrocarbons Act;

V.             The costs incurred by advisory services, except those provided for in the guidelines issued by the Secretariat;

VI.            The costs arising from non-compliance with applicable rules, including risk management;

VII.           Expenses related to training and training programs that do not meet the guidelines issued by the Secretariat;

VIII.          The costs arising from the failure to comply with the guarantee conditions, as well as those resulting from the acquisition of goods which do not have a guarantee from the manufacturer or his representative against manufacturing defects, practices generally used in the oil industry;

IX.            Expenses, costs and investments for the use of proprietary technologies, except those with a transfer pricing study in terms of applicable legislation;

X.             The amounts recorded as provisions and reserves of funds, except those for the abandonment of the facilities as outlined in the guidelines issued by the Secretariat;

XI.            Legal costs for any arbitration or dispute involving the Contractor;

XII.           The commissions paid to brokers;

XIII.          Payments for the Contractual Fees and Contractual Fees for the Exploratory Phase corresponding to the Contract, as well as the Contra-Benefits, Expenses, Costs and Investments payments for other Contracts;

XIV.          Costs, expenses and investments above reasonable market references or prices, in accordance with what is established in the rules and bases on the registration of costs, expenses and investments of the Contract, and

XV.           Those who are not strictly indispensable to the activity covered by the Contract, the others specified in each Contract, taking into account their particular circumstances or situations and those set out in the guidelines for this purpose to be issued by the Secretariat.

Article 20.- Contracts will provide that in cases where the Contractor enajene assets, the cost, expense or investment of which have been recovered under the Contract, the revenue that received by that operation will be delivered to the Mexican State, through the Mexican Petroleum Fund or, after authorization from the Secretariat, an equivalent amount will be deducted from the Contra-Benefits that correspond to the Contractor.

The Contractor shall inform the Secretariat and the National Hydrocarbons Commission of the enajenations referred to in the preceding paragraph.

Third Section

Of The Benefits in Service Contracts

Article 21.- In the Oil Exploration and Extraction Services Contracts, the Contractors will deliver the entire Contractual Production to the State and the Contraprstations in favor of the Contractor will always be in cash and will be established in each Contract considering the industry standards or uses.

The provisions of Articles 23 and 24 of this Law shall not apply to Service Contracts.

Article 22.- The Contractor Contrabenefits established in the Service Contracts will be paid by the Mexican Petroleum Fund with the resources generated by the marketing of the Contractual Production that derives from each Service Contract.

Section Fourth

Common Provisions for Contracapabilities

Article 23.- The Contracts will provide for the monthly payment in favor of the Mexican State of the Contractual Fee for the Exploration Phase, for the part of the Contractual Area that is not found in the production phase, in accordance with the following quotas:

I. For the first 60 months of the Contract

1,150 pesos per square

II. From month 61 of the Contract and onwards

2, 750 weights per square kilometre

The values for the monthly quotas referred to in this article will be updated each year in January, according to the variation in the National Consumer Price Index in the Previous immediate year.

Article 24.- The Contracts will provide for each period called Regalias, in favor of the Mexican State. The amount of the Royalties will be determined for each type of Hydrocarbon by applying the corresponding rate, determined in accordance with the fractions I to III of this article, to the Contractual Value of the Oil, to the Contractual Value of the Natural Gas and the Contractual Value of the Condensates, according to the following:

I.               For the Contract Value of Oil, the following fee will apply:

a) When the Contractual Oil Price is less than 48 dollars from the United States of America Barrel, 7.5%, and

b) When the Contractual Oil Price is greater than or equal to 48 dollars from the United States of America by Barril:

Rate =

[(0.125 x Oil Contractual Price) + 1.5]%

II.              The Natural Gas Contract Value will apply the following fee:

a) When it comes to Associated Natural Gas:

Rate =

Natural Gas Contractual Price

100

b) When it comes to Non-Associated Natural Gas:

i.         When the Contractual Price of Natural Gas is less than or equal to 5 dollars of the United States of America per million BTU, of 0%;

ii.        When the Natural Gas Contractual Price is greater than 5 and less than 5.5 dollars from the United States of America per million BTU:

Rate =

[

(Natural Gas Contractual Price-5) x 60.5

]

%

Natural Gas Contractual

iii.       When the Contractual Price of Natural Gas is greater than or equal to 5.5 dollars of the United States of America per million BTU:

Rate =

Natural Gas Contractual Price

100

III.             The Contractual Value Of The Condensates will be applied to the following fee:

a) When the Condensates ' Contractual Price is less than $60 from the United States of America by Barril, 5%, and

b) When the Condensates ' Contractual Price is greater than or equal to $60 in the United States of America by Barril:

Rate =

[(0.125 x Condensates Price Contractual)-2.5]%

For the determination of the rates for the calculation of the Royalties referred to in this article, the effects of the variations in the Price Index to the Producer of the United States of America or the United States of America. To this end, the Secretariat will be subject to the guidelines for this purpose, which must be published in the Official Journal of the Federation.

Article 25.- For the purposes of the provisions of this Title Second, in the Contracts, each Period shall be determined to determine the Contractual Value of the Hydrocarbons. Each Contract shall contain the mechanisms for the determination at the Measurement Point of the Contractual Oil, Natural Gas and Condensed Gas Prices, which reflect the market conditions. In cases where operations are carried out with related parties, such mechanisms shall, where appropriate, consider any adjustments required for quality, sulphur content, API grades, and for marketing, transport and logistics, among others.

For the case of transactions between related parties, the provisions of Article 30 of this Law shall be provided.

CHAPTER II

PROVISIONS APPLICABLE TO CONTRACTS

Article 26.- The Secretariat will determine the economic conditions regarding the tax terms contained in this Law that will have to be included in the basis of the tender for the award of the Contracts.

The variables for the award of the contracts will be in all cases of an economic nature, according to the provisions of this Law, always tending to maximize the income of the State to achieve the greatest benefit for long-term development. Considering the particular circumstances of each Contract, the Secretariat shall establish the minimum values that will be acceptable to the State for any of the award variables.

The award variables will be associated with the amount or percentage of resources that the State receives, as well as, where appropriate, the amount that the Contractor commits as an investment.

The Secretariat may choose to include in any Contract any of the Contrabenefits noted in this Act or a combination thereof.

In the migration of Allocations to Contracts, the Secretariat will determine the economic conditions related to the tax terms of the contracts. Should such contracts be modified, in accordance with the provisions of the Hydrocarbons Law, the Secretariat shall determine the new economic conditions relating to the fiscal terms to be included in the Amending Convention. respective.

The provisions of the preceding paragraph shall be without prejudice to the powers of the National Hydrocarbons Commission.

Article 27.- The Marketer will give to the Mexican Petroleum Fund all proceeds from the sale of the Contractual Production that according to each Contract corresponds to to the State, after payment for the services of that State, in accordance with the provisions of the contract that it formalizes with the National Commission of Hydrocarbons, in terms of Article 28 of the Law on Hydrocarbons.

Article 28.- Without prejudice to the obligations laid down in other legal provisions, the Contracts shall contain, inter alia, the following obligations under the Contractors:

I.               Fonting your activities;

II.              Deliver to the Mexican Petroleum Fund the Contrabenefits in favor of the Mexican State, in accordance with the terms of the Agreement, where applicable;

III.             For those Contracts that include the recovery of costs, expenses and investments, to observe the rules and bases that are included in the Contracts. These rules and bases will be subject to the guidelines issued by the Secretariat;

IV.            Observe the rules and bases on the pursuit of goods and services for the activities carried out under the Contracts that are included in each of them. These rules and bases shall be subject to principles of transparency, economy and efficiency in accordance with the guidelines issued by the Secretariat;

V.             Comply with the information requirements that the various institutions request in accordance with the provisions of this Law;

VI.            To pay for the rights and to take advantage of the administration and supervision of the Contracts or the supervision and supervision of the activities carried out under the contracts, carried out by the National Commission of Hydrocarbons and the National Agency for Industrial and Environmental Protection of the Hydrocarbons Sector, and

VII.           Comply with the obligations of abandonment and dismantling in accordance with the applicable legal provisions and the provisions of the Contract, and transfer to the State the assets generated or acquired under the Contract without charge, payment, or compensation and in good condition of preservation and operation, taking into account the normal wear and tear produced by the use, without prejudice to the finiquitos which, if appropriate, correspond.

For purposes of the provisions of paragraphs III and IV of this Article, when the Secretariat makes modifications to the guidelines, they shall only apply for contracts that are be awarded after the abovementioned amendments.

Each Contract must expressly provide for the Contractor's commitment to agree with third parties with whom it carries out transactions related to the subject matter of the Contract itself, those third parties to deliver directly to the Mexican Petroleum Fund, the National Hydrocarbons Commission and the Secretariat, upon request, information on their operations with the Contractor by virtue of the Agreement.

Article 29.- Contractor benefits will be paid once the Contractor obtains the Contractual Production, so there is no Production Contractual, under no circumstances shall Contrabenefits be payable in favor of the Contractor nor shall he be granted any advance.

The Contracts will provide for the conditions under which the Contractors will be able to take advantage of the products and substances other than the Hydrocarbons that are generated in the Exploration and Extraction, provided that no concession is required for its exploitation or use, in which case the applicable legal framework will be available.

Article 30.- In cases where the Contractor conducts operations with related parties, both for the sale or marketing of Hydrocarbons and for the supply of inputs, Materials or services, the Guidelines on Transfer Pricing for Multinational Enterprises and Fiscal Administrations, approved by the Council of the Organization for Economic Cooperation and Development in 1995, or those that replace them, to the extent that they are consistent with the provisions of this Law, of the Law of Income Tax and of the treaties concluded by Mexico.

Article 31.- The tender bases of the Contracts and the Contracts must provide that these can only be formalized with productive enterprises of the State or Morales comply with:

I.               Being resident for tax purposes in Mexico;

II.              For exclusively the Exploration and Extraction of Hydrocarbons, and

III.             Not to be taxed in the optional tax regime for groups of companies referred to in Chapter VI of Title II of the Income Tax Act.

The productive companies of the State and Morales will be able to participate in the bidding processes individually, in consortium or through the figure of associations in participation.

A consortium will be understood when two or more productive companies of the State and/or Morales, jointly present a proposal within the bidding process for the award of a Contract.

The bidding bases shall provide that the Contract may only be awarded to participating associations whose agreement has been concluded in accordance with Mexican law.

Each of the members of the consortium or the joint venture partnership shall sign the Agreement and comply with the provisions of the above fractions I to III.

State production companies, Morales, participation associations and consortia may be the holders of more than one Contract.

State production companies wishing to migrate their Allocations to Contracts may not be taxed in the optional tax regime indicated in section III of this article.

Contracts should provide for conventional penalties and guarantees of seriousness and compliance supported by conventional financial instruments that are required for their operation.

Article 32.- For the purposes of determining income tax, you will be the following:

A. Contractors, instead of applying the deduction percentages set out in Articles 33 and 34 of the Income Tax Act, shall apply the following percentages:

I.               100% of the original amount of investments made for Exploration, secondary and improved recovery, and non-capitalizable maintenance, in the year in which they are carried out;

II.              25% of the original amount of investments made for the development and exploitation of oil or natural gas fields, in each financial year, and

III. 10% of the original amount of investments made in Storage infrastructure and transport indispensable for the execution of the Contract, such as pipelines, pipelines, terminals, transport or storage tanks necessary to bring the Contractual Production to the delivery, measurement or audit points determined in each Contract, in each financial year.

When the Contractor uses assets of the investments referred to in this article that would not have been deducted in full under the Third Title of this Law, for the purposes of This Title may only deduct the outstanding balance of the goods corresponding to that Contract in terms of the guidelines issued by the Secretariat.

For the purposes of the tax loss provided for in Article 57 of the Income Tax Act, taxpayers who carry out activities in the regions of marine areas with water more than five hundred meters, may decrease such loss in an exercise of the fiscal utility of the following fifteen years until exhausted.

B. The Morales Persons or productive enterprises of the State that are grouped together in a consortium in terms of Article 31 of this Law, shall observe the following:

I. You must enter into a joint operation agreement in which at least:

a) Name one of the consortium members as an operator to perform operations on behalf and by account of the same;

(b) The members of the consortium agree that the tax vouchers to be issued for the expenses incurred carry out the activities necessary for the execution of the Contract, be issued in the name of the operator, and

c) Reflect the percentage of the participation that corresponds to each member of the consortium, which must be consistent with the Contract;

II. The operator must provide each member of the consortium with a relationship of the make use of the Contract, and must keep a copy of the Agreement, as well as a duplicate of the vouchers with tax requirements that have been issued to you, which must coincide with that relationship;

III. The operator will issue the tax vouchers to the consortium members who expenses incurred arising from the execution of the Contract in the proportion corresponding to its participation in the Contract;

IV. The operator must provide, by the 15th of February of each year, the authority tax, information on the operations carried out in the previous immediate financial year on behalf of the members of the consortium, identifying for each the proportional share corresponding to the total of the operations carried out;

V. The members of the consortium may deduct, individually, the proportional share of the costs, expenses and investments that are incurred, provided that the operator issues, for each member, a tax voucher to cover the amount of the proportional share corresponding to them and meet the requirements laid down by the provisions fiscal;

VI. Not to be considered as a cumulative income for the operator, the amounts to be collected for to make expenditure on behalf of the members of the consortium, provided that such amounts are supported by the tax vouchers issued by the operator to each of the members of the consortium in terms of fraction III previous;

VII. The operator will only be able to deduce the proportional portion corresponding to it, in accordance with its participation in the consortium, of the total amount covered by the vouchers issued to it in terms of section I (b) above;

VIII. The members of the consortium may choose to receive each one, in the proportion that corresponds within the consortium, the Contra-Benefits that according to the Contract must be covered to the Contractor, or that the Contrabenefits are delivered to the operator to be distributed among the members of the consortium in the respective proportions.

In the latter case, the operator will not be able to deduce the amounts of these Contra-benefits to the members of the consortium. In addition, the operator shall not consider cumulative income the amounts of those Contrabenefits effectively distribute to the consortium members, and

IX. The members of the consortium must meet their tax obligations individually.

Article 33.- Acts or activities that cause the value added tax to be covered by the Contrabenefits to be established in the Contracts referred to in the This Title shall be subject to the 0% rate for the purposes of the said tax. The provisions of this paragraph shall not apply to other types of contracts or operations which conclude with third parties the parties involved in the abovementioned contracts.

Article 34.- In cases where contracts other than those referred to in this Law are intended to be held, the Secretariat shall determine the corresponding among those provided for in this order or a combination thereof, always seeking the maximization of the Nation's income.

In the Contracts formalized by the National Hydrocarbons Commission, referred to in the first paragraph of this article, all the resources derived from the commercialization of the Contractual Production that according to the Contract corresponds to the State, will be delivered to the Mexican Petroleum Fund, who will pay the Contrabenefits to the Contractor in accordance with the provisions of the Contract.

When a State Productive Company that is Contractor by virtue of the migration of an Assignment intends to associate with third parties for the execution of a Contract, the Secretariat shall be the power to lay down the economic conditions relating to the tax terms of the contract, as well as the award variables for the tender of the association or transfer, as appropriate, and shall set the minimum tax conditions for observe in the tender that guarantee that the income for the State is not less than those obtained under the original Contract.

CHAPTER III

OF THE ADMINISTRATION AND MONITORING OF THE FINANCIAL ASPECTS OF CONTRACTS

Article 35.- The Contracts will provide that the administration of the financial aspects of the contracts, related to the benefits and other elements provided for in this Law, will be shall carry out by the Mexican Petroleum Fund, without prejudice to the powers that correspond to the National Hydrocarbons Commission in the administration of the Contracts.

Also, the Contracts will provide that the verification of the financial aspects thereof, related to the Contra-Benefits and other elements provided for in this Law, will be carried out by the Secretariat.

The Mexican Petroleum Fund, the Secretariat and the National Hydrocarbons Commission will have to coordinate for the proper exercise of their respective functions in the administration and monitoring of the Contracts.

Article 36.- The Mexican Petroleum Fund and the Secretariat shall perform the functions referred to in this Title Second and the other functions provided for in the applicable provisions and in the Contracts, in accordance with the guidelines that, if applicable, issue.

The determinations of the Mexican Petroleum Fund and the Secretariat arising from the administration and verification of the financial aspects of the Contracts, as appropriate, as well as the fixing of the economic terms of the same as established by the Secretariat in accordance with the Law and the ranges of values published or that have been modified in terms of this Law, will not be considered acts of authority. The above, without prejudice to the fact that those decisions relating to the administration of the contracts may be contested by the courts which, by the nature of the contracts, correspond, or through the mechanisms provided for in the Contracts.

Article 37.- Contracts will provide that the Mexican Petroleum Fund and the Secretariat will have, among others, the following functions:

A. Corresponds to the Mexican Petroleum Fund:

I. Receive from the Contractors the information and documentation related to the costs, expenses and investments, as well as the deduction of such investments, required for the execution of the Contract, and keep a record of such concepts and, where appropriate, their recognition;

II.              Receive the Payment of the Royalties, Contractual Fees for the Exploratory Phase and other State-benefit Contrabenefits established in the Contracts;

III. Take the information records that are required to calculate and determine the Contracts established in the Contracts and to perform the other functions of their office;

IV. Make the calculation and payment of the Contrabenefits which, if applicable and in accordance with the Contracts, correspond to the Contractors;

V. Request the Contractors and third parties for the information they require for the correct exercise of their functions, as set out in the Contract;

VI. Provide the Secretariat with the information it requires for the execution of its functions;

VII. Request to the National Hydrocarbons Commission for the technical support it requires for the execution of its functions, and

VIII. Give notice to the National Hydrocarbons Commission and the Secretariat regarding irregularities it detects in the performance of its functions that the rights which correspond to the State under the Contract are enforced, or the penalties or penalties provided for therein are applied. The above, without prejudice to other legal, judicial or criminal actions that may be applicable.

B. Corresponds to the Secretariat:

I. Determine the bases and rules on the registration of costs, expenses and investments of the Contract, according to the guidelines you issue. Such bases and rules must be included in the respective Contract;

II. Determine the bases and rules on the pursuit of goods and services for the activities carried out Under each Contract, according to the guidelines it issues, they must aim to minimize the costs, expenses and investments, giving priority to the use of mechanisms that guarantee the greatest transparency and competition in the contracting processes of the Contractor. Such bases and rules on the procurement of goods and services shall be included in the respective Contract;

III. Receive from the Mexican Petroleum Fund the information and documentation related to the costs, expenses and investments, as well as the deduction of such investments, required for the execution of the Contract, and keep a record of such concepts;

IV. Verify the correct payment of the Royalties, Contractual Fees for the Exploration Phase and the other Consideration that, in accordance with the Contract, correspond to the State and the Contractor;

V. Carry the information records that are required for the verification of the Contracapabilities established in the Contract and to perform the other functions of the contract;

VI. Notify the Mexican Petroleum Fund of the irregularities it detects in the payment of the Consideration, in order to proceed as set out in the Contract;

VII. Verify the accounting records and operations derived from the Contract, including through carrying out audits or visits to the Contractors, in accordance with the guidelines to the effect it issues;

VIII. Request the Contractors and third parties for the information they require for the correct exercise of their functions, as set out in the Contract;

IX. Request the Mexican Petroleum Fund for additional information it requires for the execution of their functions;

X. Coordinate with the National Hydrocarbons Commission to receive technical support and request field or other visits to verify the contractors ' activities and investments, and

XI. Give notice to the Mexican Petroleum Fund and the National Hydrocarbons Commission regarding the irregularities detected in the execution of the Contract in order to enforce the rights corresponding to the State under the Agreement, or the penalties or penalties provided for in the Contract. The above, without prejudice to other legal, judicial or criminal actions that may be applicable.

Article 38.- The functions performed by the Secretariat and the Mexican Petroleum Fund in terms of the Contracts or in accordance with this Law shall be without prejudice to the powers of the tax matters of the competent authorities, in terms of the applicable laws.

The registration and recognition of costs, expenses, investments and revenues that are made in accordance with the provisions of the Contracts will only be valid for the determination of the Consideration shall be given to them, so that their registration, and where appropriate, recognition under the terms of a Contract shall not imply their acceptance or rejection for the fulfilment of the tax obligations to which the contract is subject Contractor in terms of applicable law.

THIRD TITLE

OF INCOME DERIVED FROM ALLOCATIONS

CHAPTER I

RIGHT BY SHARED UTILITY

Article 39.- The Alsignors will pay annually the right for the shared utility applying a rate of 65% to the difference that results from decreasing the value of the Hydrocarbons extracted during the fiscal year concerned, including the consumption of these products by the Alassignee, as well as the meriting or burning of such products, the deductions permitted in Article 40 of this Law.

The right referred to in this Article shall be entered in the form of a declaration to be lodged with the authorised offices at the latest on the last working day of the month of March of the following year. the one to which the payment corresponds.

Article 40.- To determine the basis of the right by the shared utility, the following concepts are deductible:

I. 100% of the original amount of investments made for Exploration, Recovery secondary and non-capitalizable maintenance, in the year in which they are carried out;

II. 25% of the original amount of investments made for development and extraction of Oil or Natural Gas fields, in each financial year;

III. 10% of the original amount of investments made in Storage infrastructure and transport essential for the implementation of the activities under the allocation, such as pipelines, pipelines, terminals or storage tanks, for each financial year;

IV. Costs and expenses, considering for such effects the necessary erogations for extraction of the deposits of Petroleum or Natural Gas determined in accordance with the Mexican Financial Reporting Standards, except for the investments referred to in fractions I, II and III of this Article. The only costs and expenses to be deducted will be those for the Exploration, Transportation or Delivery of Hydrocarbons. Costs and expenses shall be deducted when they have actually been paid in the period to which the payment corresponds, and

V.             The right of extraction of hydrocarbons referred to in Article 44 of this Law, effectively paid during the corresponding period.

The deductions referred to in Sections II and III of this Article shall be adjusted in accordance with the provisions of the Income Tax Act.

The original amount of the investments referred to in fractions I to III of this article shall comprise, in addition to the price of the investments, only the foreign trade taxes effectively paid on the basis of such investments.

The deduction of the original amount of the investments may be initiated from the time the funds are made for the purchase of the same or from their use. In no case shall the deductions for such investments, before making the adjustment referred to in the second paragraph of this Article, exceed 100% of their original amount.

The Assignee will establish a record of the costs and expenses of the Exploration and Extraction for each field of Extraction of Hydrocarbons, as well as of the specific types of Hydrocarbons to be obtained, and shall send to the Chamber of Deputies and the Tax Administration Service the periodic information that is incorporated in that registry, making available to them the data, studies, reports, prospects and other sources information on the basis of the information incorporated in the register, with the purpose of which the acts of oversight may be carried out which are considered to be relevant through the High Audit of the Federation and the Tax Administration Service.

The records referred to in the preceding paragraph shall be made in accordance with the general provisions that the Secretariat has in effect.

Article 41.- For the purposes of the calculation of the right by the shared utility, the concepts referred to in Article 43 of this Law, as well as the interests of the any type in charge of the Assignee, the exploration reserve, the selling expenses, the pension payments that are made from the labor reserve and any expenses, costs or investment related to the Contracts. In the case where the labour reserve has remaining in the financial year, the remainder shall be reduced from deductions made in the same financial year.

Likewise, the amount of the deduction for the costs, expenses, and deductible investments of fractions I to IV of Article 40 of this Law, in no case shall be greater than the following amounts:

I. 12,500% of the annual value of Hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in land areas;

II. 12,500% of the annual value of Hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in marine areas with water tirant less than five hundred metres;

III. 80% of the annual value of the Non-Associated Natural Gas including, where applicable, the annual value of the Condensates extracted from Non-Associated Natural Gas fields;

IV. 60% of the annual value of Hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in sea areas with water tirant of more than five hundred metres, and

V. 60% of the annual value of the Hydrocarbons other than the Non-Associated Natural Gas and its Condensates, extracted from the Chicontepec Paleocanal.

The deductible portion of expenses, costs, and investments pursuant to Section 40 of this Law that rebase the maximum amount of deduction under the previous paragraph, may deduct in the immediate financial years subsequent to the one to which they correspond in accordance with the general provisions which the Secretariat has issued to the effect, without such a deduction being applied in the determination of the rights relative to another region according to the classification contained in section X of the article 48 of this Act.

Article 42.- On account of the right referred to in Article 39 of this Law, monthly interim payments shall be made, no later than the last working day of the month after the month in which the correspond to the provisional payments, applying the rate laid down in the first paragraph of Article 39 to the value of the hydrocarbons extracted in the period from the beginning of the financial year to the last day of the month to which the payment, with the following concepts decreasing:

I. Costs, expenses and the proportional share of investments for the same period in accordance with Article 40 of this Law, without exceeding the maximum amounts in the following terms:

a) 12,500% of the value of hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in the period from the beginning of the financial year and up to the last day of the month to which the payment corresponds, in land areas;

b) 12,500% of the value of the hydrocarbons other than the Non-Associated Natural Gas and its Condensates, extracted in the period from the beginning of the financial year and up to the last day of the month to which the payment corresponds, in sea areas with water tirant less than five hundred metres;

c) 80% of the value of the Non-Associated Natural Gas including, where applicable, the annual value of the Extracted Condensates, in the period from the beginning of the financial year and up to the last day of the month to which the payment corresponds, of Non-Associated Natural Gas fields;

d) 60% of the value of hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in the period from the beginning of the financial year and up to the last day of the month to which the payment corresponds, in sea areas with water tirants greater than five hundred metres, and

e) 60% of the value of hydrocarbons other than Non-Associated Natural Gas and its Condensates, extracted in the period from the beginning of the financial year and up to the last day of the month to which the payment corresponds, in the Paleocanal of Chicontepec;

The proportional portion of the deductible amount of the investment, which will be performed at the percent representing the number of full months in which the goods or goods subject to the investment have been used by the Alassignee for 12 months, in proportion to the number of months from the beginning of the financial year and up to the last day of the month of the period to which the payment corresponds, represent in the total of months included in the year, and

II. The right to exploration of hydrocarbons and the right to extraction of effectively paid hydrocarbons.

The provisional payment thus determined shall be deducted from the provisional payments of this duty actually paid in the preceding months corresponding to the financial year in question, the difference being the provisional payment for learning.

In the annual declaration for the right referred to in Article 39 of this Law, the monthly provisional payments actually paid for this right, corresponding to the financial year, may be credited. in question.

When the provisional payment declaration or the annual declaration results in a balance in favour, the Asigliere may compensate that balance in favour against subsequent payments of the right. Such compensation shall be made in accordance with the provisions of Article 17-A of the Fiscal Code of the Federation, considering the period from the month in which the balance is obtained in favour, until the month in which the compensation.

Article 43.- For the purposes of this Chapter, the following costs and expenses are not deductible:

I. Financial costs;

II. The costs incurred through negligence or fraud by the Alassignee or persons acting on behalf of the this;

III.             Costs and expenses by way of easements, rights of way, temporary or permanent occupations, leases or acquisition of land, indemnities and any other similar figure deriving from the provisions of Article 27 and in Chapter IV of Title IV of the Law on Hydrocarbons;

IV. The commissions paid to brokers;

V. The costs related to the marketing or transportation of Oil or Natural Gas beyond the points of delivery;

VI. Financial penalties or penalties incurred for non-compliance with legal or contractual obligations;

VII. The employment-related expenses of an independent expert for the purpose of resolving disputes;

VIII. The donations;

IX. The costs incurred for legal and advisory services, except those provided for in the the general character of the Secretariat's effect;

X. Expenses arising from non-compliance with the rules applicable to risk management;

XI. Training related expenses and training programs that do not comply with the the general character of the Secretariat's effect;

XII. Expenses arising from non-compliance with warranty conditions, as well as the acquisition of goods which do not have a guarantee from the manufacturer or his representative against manufacturing defects, in accordance with the practices generally used by the oil industry;

XIII. The decreases in the value of goods not used in the oil industry;

XIV. The taxes associated with the Worker's workers;

XV. The amounts recorded as provisions and reserves of the funds, except those reported in the provisions of a general nature to be issued by the Secretariat;

XVI. The credits in favor of the Alassignee whose debtors are in suspension of payments, up to the conclusion of the relevant judgment in which the debtors are declared insolvent;

XVII. Payments for Contrabenefits, as well as expenses, costs or corresponding investments to Contracts;

XVIII. The legal costs for any arbitration that generates a dispute between the Licensee, and their contractors or subcontractors;

XIX. Costs, expenses and investments above reasonable market references or prices, compliance with what is established in the rules and bases on the registration of costs, expenses and investments established by the Secretariat, and

XX. Those that are not strictly indispensable to the activities for which the Allocate is obliged to pay the duty laid down in Article 39 of this Law.

CHAPTER II

HYDROCARBON EXTRACTION RIGHT

Article 44.- The Allocate shall be obliged to pay monthly the right of extraction of hydrocarbons, applying the corresponding rate in accordance with fractions I to III of this article to the value of the Hydrocarbon in question extracted in the month. The fees shall be determined using the prices of the Hydrocarbons in dollars per unit, as appropriate, according to the following:

I.               To the value of the Oil, the following rate will be applied:

a) When the price of oil is less than 48 dollars from the United States of America by Barril, 7.5%, and

b) When the price of the Oil is greater than or equal to 48 dollars of the United States of America Barrel:

Rate =

[ (0.125 x Oil Price) + 1.5]%

II. To the value of Natural Gas, you will be charged the following fee:

a) When it comes to Associated Natural Gas:

Rate =

Natural Gas Price

100

b) When it comes to Non-Associated Natural Gas:

i.         When the price of Natural Gas is less than or equal to 5 dollars of the United States of America per million BTU, of 0%;

ii. When the price of Natural Gas is greater than 5 and less than 5.5 dollars from the United States of America per million BTUs:

Rate =

[

(Natural Gas Price- 5) x 60.5

]

%

Natural Gas

iii. When the price of Natural Gas is greater than or equal to 5.5 dollars of the United States of America million BTU:

Rate =

Gas Price Natural

100

III. The value of the Condensates will be applied to the following rate:

a) When the price of the Condensates is less than 60 dollars from the United States of America by Barril, 5%, and

b) When the price of Condensates is greater than or equal to $60 from the United States of America by Barrel:

Rate =

[(0.125 x Condensated Price)-2.5]%

For the determination of the rates for the calculation of the right referred to in this article, the effects of the variations in the Price Index to the Producer of the United States of America or the United States of America. To this end, the Secretariat will be subject to the guidelines for this purpose, which must be published in the Official Journal of the Federation.

CHAPTER III

HYDROCARBON EXPLORATION RIGHT

Article 45.- The Allocate will be obligated to the monthly payment of the hydrocarbon exploration right, by the portion of the Allocation Area that is not in the phase of production, in accordance with the following quotas:

I. For the first 60 months of the Assignment

1, 150 weights per square kilometre

II. From month 61 of the Assignment and onwards

2,750 pesos per square kilometre

Oil exploration rights quotas will be updated each year in January, according to the variation in the National Consumer Price Index in the immediate year. previous.

CHAPTER IV

OF THE OBLIGATIONS OF THE DISPATCHERS

Article 46.- Allocations may be granted only to productive enterprises of the State whose object is exclusively the Exploration and Extraction of Hydrocarbons, and which do not the optional tax regime for groups of companies referred to in Chapter VI of Title II of the Income Tax Act.

The Allocations will be obliged to pay the income tax for the income they obtain for the activities of Exploration and Extraction of Hydrocarbons and will comply with their tax obligations under the provisions of the Income Tax Act and other applicable provisions.

For the purposes of the provisions of this Title, as well as for the fulfillment of the tax obligations contained in the Income Tax Law, the Allocated separate accounting by type of region in respect of income earned from its activities.

For the purposes of determining income tax, the Allocations, instead of applying the deduction percentages set out in Articles 33 and 34 of the Tax Act on Income, they must apply the following percentages:

I. 100% of the original amount of investments made for Exploration, Recovery secondary and non-capitalizable maintenance, in the year in which they are carried out;

II. 25% of the original amount of investments made for development and extraction of Oil or Natural Gas fields, in each financial year, and

III. 10% of the original amount of investments made in Storage infrastructure and transport essential for the implementation of the activities under the allocation, such as pipelines, pipelines, terminals or storage tanks, for each financial year.

With the exception of the provisions of Article 32 (A), second paragraph of this Law, the Asigliere must comply with the tax obligations separately from those obligations. taxes that are generated on the basis of a Contract.

For the purposes of compliance with the tax obligations arising from the allocations, the revenue from the contracts shall not be cumulative, nor shall the payments be deductible. (a) the cost, costs or investments corresponding to the activities carried out under the contracts.

Without prejudice to the rights contained in this Title, the Alsignors shall be obliged to pay the rights and to take advantage of the administration and supervision. of the Allocations or the supervision and surveillance of the activities carried out under the same, carried out by the National Hydrocarbons Commission and the National Agency for Industrial and Environmental Protection of the Sector Hydrocarbons.

Article 47.- Regarding Appropriations, the Secretariat:

I. You must determine the basis and rules for the registration of costs, expenses and investments of the Assignment, according to the guidelines you issue;

II. Must determine the basis and rules on the pursuit of goods and services for activities carried out under an allocation, in accordance with the guidelines it issues, which must be aimed at minimizing the costs, expenses and investments, giving priority to the use of mechanisms that guarantee greater transparency, and

III. You will be able to ask the Alsigners for the information they require for their compliance powers referred to in this Act.

Article 48.- For the purposes of this Title, it will be considered:

I. The value of the extracted hydrocarbons, the sum of the value of the Oil, the value of the Gas Natural and the value of the Condensates, as appropriate, extracted in the region concerned, in the period for which it is obliged to pay the duty;

II. As the value of Oil, the sum of the value of each type of Oil extracted in the region in the period in question, it shall be treated. The value of each type of oil extracted in the region concerned shall be understood as the price of the oil per barrel of the oil extracted in that region, in the period in question, multiplied by the volume of barrels of oil extracted in the region in the same period for which it is obliged to pay the duty;

III. As the value of Natural Gas, the price of Natural Gas multiplied by the volume of Natural Gas extracted in the region concerned, in the same period for which it is obliged to pay the duty;

IV. As the value of the Condensates, the price of the Condensed extracted in the region concerned, in the period in question, multiplied by the volume of barrels of condensates extracted in the region in the same period for which it is obliged to pay the duty;

V. As the price of oil, the average export price per barrel of the oil extracted in the period in question. In the event that any type of oil marketed within the country has not been exported, the weighted average price of these oils shall be calculated by adjusting it for the quality of the Hydrocarbon concerned, in accordance with the sulphur content and the the API grades it contains. The Secretariat shall issue the general rules defining the corresponding adjustment methods;

VI. As the price of Natural Gas, the average price that the corresponding period has had Natural Gas thermal unit alienated by the taxpayer;

VII. As the price of the Condensates, the average price of the Condensates than in the period corresponds to a barrel of Condensates which has been alienated by the taxpayer;

VIII. As effectively paid, the sum of the amounts that the Alsignator applied for the extinction of his/her tax liability decreased by the balances in favour that have been offset against other contributions;

IX. Como Paleocanal de Chicontepec, that region of Extraction of Petroleum and/or Natural Gas located in the municipalities of Castillo de Teayo, Coatzintla, Coyutla, Chicontepec, Espinal, Ixhuatlan de Madero, Temapache, Papantla, Poza Rica de Hidalgo, Tepetzintla or Tihuatlan, in the State of Veracruz of Ignacio de la Lrave, or in the municipalities of Francisco Z. Mena, Pantepec or Venustiano Carranza, in the State of Puebla, and

X. As a region, the one that corresponds to the following classification:

a) Land areas;

b) Marine areas with water tirant less than five hundred meters;

c) Non-associated Natural Gas;

d) Marine areas with water tirant exceeding five hundred meters, or

e) Chicontepec Paleocanal.

The Secretariat may issue general rules defining the methods of adjustment of the Value of the corresponding Hydrocarbons.

Article 49.- The Party shall submit to the Secretariat an annual report of the investments, costs and expenses that, in accordance with the provisions of this Title, have deducted in the tax year in question.

In the report referred to in this article, the Allocated Party shall include the investments, costs and expenses it has incurred in the financial year in question for each Extraction field. Hydrocarbons, as well as projections of these for the two years following which it is reported and, in the event that the investments, expenses and costs incurred in the fiscal year in question have presented more than 10% of the differences in respect of projected amounts, shall include justification corresponding.

Along with the report referred to in the preceding paragraph, the Allocate shall submit to the Secretariat the following information:

I. A database containing the Hydrocarbon Extract projects in which they are included, for each Extraction field, the Reserves and the production of Petroleum, Natural Gas and Condensed, in addition to the concepts mentioned in the second paragraph of this article;

II. The methodology used to prepare the Hydrocarbon Extraction projections, as well as of the investments, expenses and costs referred to in the second paragraph of this article, and

III. The premises and assumptions used in the projections referred to in the second paragraph of this Article, including recovery factors, seismic interpretation, number and drilling techniques, as well as the criteria for reclassification of reserves.

The Secretariat may request additional information it deems appropriate in relation to the annual report and information referred to in this Article, as well as to issue the provisions of a general nature that are necessary to regulate their presentation.

The annual report and the information referred to in this article shall be delivered no later than 31 March of the fiscal year following that which is reported.

Article 50.- For the purposes of this Title, the Allocate must have systems of measurement of volumes extracted from Oil, Natural Gas and Condensed, installed in each well, field and point of transfer of custody. The National Hydrocarbons Commission will issue the guidelines for the measurement of these volumes.

Article 51.- For the purposes of this Title, when the Assignee enajene Oil or Natural Gas to related parties, it shall be obliged to determine the value of the Oil and Gas Natural, considering for those transactions, the prices and amounts of consideration that it would have used with or between independent parties in comparable transactions, applying for this the method of comparable price not controlled established in the Article 180, fraction I of the Income Tax Act.

Dealing with costs, expenses, and investments made or acquired with related parties, the Allocated will consider for those operations, the prices and amounts of consideration that it has been used with or between independent parties in comparable transactions, applying for those purposes the provisions of Articles 11, 179 and 180 of the Income Tax Act.

Article 52.- The Licensee shall learn the rights referred to in this Title to the Mexican Petroleum Fund.

The Party shall comply with the other provisions of a fiscal nature relating to the payment of entitlements to the competent tax authority.

The declarations of the rights referred to in this Title shall be presented by means of the electronic mechanisms established by the Tax Administration Service, and the entire of the right will be made by electronic transfer to the Mexican Petroleum Fund.

When submitting the declarations on the payment of the rights referred to in this Title to the tax authority, the Asigliere must accompany the proof of payment issued by the Mexican Petroleum Fund.

The Mexican Petroleum Fund may establish the technical guidelines necessary to perform the functions that correspond to it in accordance with this Title.

Article 53.- For the purposes of this Title, the Allocate, to evaluate investment projects, to determine the aggregate value of its business lines and, in cases where it is appropriate for them to determine the prices to the public of the goods and services which it places on related parties and where the Contractor Enajene Hydrocarbons to related parties is obliged to determine its value, considering for those transactions, prices and amounts of consideration that would have been used with or between independent parties in comparable transactions, applying for this the provisions of Articles 179 and 180 of the Income Tax Act, specifically the non-controlled comparable price method.

TITLE FOURTH

OF THE HYDROCARBON EXPLORATION AND EXTRACTION ACTIVITY TAX

Article 54.- They are required to pay the tax for hydrocarbon exploration and extraction activity, Contractors and Assigned by the Contractual Area and Area of Assignment, respectively, defined in the corresponding Contract or Assignment.

Article 55.- The hydrocarbon exploration and extraction activity tax will be calculated monthly by applying for each square kilometer that comprises the Contractual Area. or the Assignment Area, the following quotas:

I. During the scan phase 1,500 weights, and

II. During the extraction phase 6,000 pesos.

For the purposes of this article, the Exploration Phase includes from the formalization of the Contract or the Assignment to the beginning of the Extraction Phase, which includes the beginning of the of the activities for the commercial production of Hydrocarbons until the end of the term of the Contract or the Assignment.

For the calculation of the tax referred to in this article, in cases where the Contractual Area or the Area of Allocation is integrated by a fraction of a square kilometre, consider up to the hundredth.

The tax quotas provided for in this Title shall be updated annually on the first of January of each year, considering the period from the thirteenth immediate month. before and until the last month before the update is performed.

The tax will not be caused by the activity of exploration and extraction of hydrocarbons in those cases in which the taxpayer justifies, that for reasons not imputable to him, is found It is not possible to carry out the activities of Exploration and Extraction of Hydrocarbons in the Contractual Area or Area of Allocation, as it is concerned. The Tax Administration Service shall issue the general provisions necessary for the application of the exemption.

Article 56.- The taxpayer will determine the tax for hydrocarbon exploration and extraction activity per month or fraction of this, and must pay it no later than day 17 of the immediate month following the one that corresponds to the payment.

For compliance with the provisions of this Title, the tax provisions and general rules issued by the Administration Service shall apply in the conduct of this Title. Tax.

Article 57.- The Fund for Federative Entities and Municipalities Producers of Hydrocarbons will be integrated with the resources collected by the tax for the activity of exploration and extraction of hydrocarbons provided for in this Title.

For the purposes of Article 2o. The Tax Coordination Law shall not include in the federal collection participable, the total collection of the tax for the activity of exploration and extraction of hydrocarbons provided for in this Title.

The resources collected will be distributed among the federal entities attached to the National System of Fiscal Coordination and its municipalities according to the following criteria:

I. In cases where Contractual Areas or Allocation Areas are located in regions 100% of the resources collected will be allocated to the federal entity in which these areas are located. Federative entities must distribute at least 20% of the resources to the municipalities where the Contractual Areas or the Areas of Allocation are located, considering the extent of the same in relation to the total corresponding to the federative entity, in accordance with the applicable legal provisions;

II. In cases where Contractual Areas or Allocation Areas are located in regions At sea, 100% of the resources collected will be allocated to the federal entities in whose region these areas are located. The federal authorities must allocate at least 20% of these resources to the municipalities that damage the social and ecological environment derived from the activity of Exploration and Extraction of Hydrocarbons, according to the provisions of the applicable legal provisions;

III. The distribution of resources between the federal entities and between the municipalities determine on the basis of the total collected and the procedure laid down in the rules of operation that the Secretariat has to effect.

For the purposes of the preceding paragraph, the National Hydrocarbons Commission shall provide the Secretariat the required information, according to the operation rules outlined, and

IV.            The totality of the resources must be used for investment in infrastructure to compensate, among other things, the affections to the social and ecological environment. Federative entities and municipalities may allocate up to 3% of the resources for carrying out studies and evaluation of projects that meet the specific purposes of the Fund for Federal Entities and Municipalities. Hydrocarbons.

In order to receive the resources referred to in this article, the federal entities attached to the National Tax Coordination System will not establish or maintain local or local taxes. Council Regulation (EU) No 1408/71 on the protection, preservation or restoration of ecological balance and the protection and control of the environment, which have an impact on the acts or activities of Exploration and Extraction of Hydrocarbons, or on benefits or Consideration that is derived from the Contracts or Allocations.

TITLE FIFTH

OF TRANSPARENCY AND OVERSIGHT

Article 58.- Without prejudice to the transparency obligations arising from the applicable provisions, the Mexican Petroleum Fund and the Secretariat shall make The following information shall be published monthly by electronic means and keep updated, as appropriate, the following information:

I. For each Contract and in aggregate:

a) Volume produced, by type of Hydrocarbon;

b) Revenue derived from the commercialization of the Hydrocarbons that the State performs;

c) Monto of the Contrabenefits paid to the Contractors by Period, disaggregated by type or concept payment;

d) Revenue received by the State for the payment of Contractual Quotas for the Phase Exploratory;

e) Revenue received by the State for the payment of Royalties;

f) Revenue received by the State for the benefits provided for in the Contracts other than the (d) and (e) above, disaggregated by type of Contraindability;

g) Contracted Condensates, Natural Gas, and Petroleum prices for each Period;

h) Monto of fiduciary fees charged by the Mexican Petroleum Fund;

i) Cases where an Adjustment Mechanism has been applied and the result of the Adjustment Mechanism;

j) Investment Monts reported by Contractors;

k) Assignments that have been migrated to Contracts in the corresponding month, and

l) The payment made to the Marketer for each Contract that includes that figure;

II. Derived from the provisions of the Third Title, for each of the regions defined in the Section X of Article 48 of this Law:

a) Volume produced, by type of Hydrocarbon;

b) Revenue from the commercialization of Hydrocarbons;

c) Montos received for each of the rights;

d) Montos of investments reported by the Alsigners, and

e) Montos of deductible costs and effectively deducted by Alsignors in the period;

III. In aggregate, the amount of income tax paid by the Contractors and Dispatchers, and where applicable, the amount of returns made;

IV. The conventions or coordination bases to be held in terms of this Law;

V. The guidelines that you issue in accordance with the provisions of this Law and the Contracts;

VI. For each Contract, if applicable:

a) The concepts and amounts corresponding to the costs, expenses, or deductions deemed improper in terms of the Contract;

(b) The final results of the audits carried out in accordance with Article 37 (B) Section VII of this Law;

(c) The cases where the function referred to in Article 37 (B), fraction X, of the this Act, as well as the report obtained from the National Hydrocarbons Commission;

(d) The cases where the function referred to in Article 37 (A) (VII) has been exercised; and paragraph B, fraction XI, of this Law, and

e) The amounts of the firm tax credits determined to the Alsigners on the basis of the revisions that are practiced in terms of the provisions of Article 42 and other applicable of the Tax Code of the Federation regarding the payment of the rights provided for in the Third Title of this Law and, where applicable, the amounts of the fines that are imposed on them.

to comply with the provisions of this article, the Mexican Petroleum Fund and the Secretariat will coordinate with the Energy Secretariat, the National Hydrocarbons Commission, and the Tax Administration Service.

For the purposes of this article, the publication of tax information constitutes an exception to the provisions of Article 69 of the Tax Code of the Federation.

Article 59.- The resources that enter the Mexican Petroleum Fund will be considered federal and will be subject to the powers of oversight of the federal authorities, in accordance with the applicable legal provisions.

In order to ensure that the resources of the Mexican Petroleum Fund are used for authorized purposes, procedures and mechanisms for monitoring, monitoring and monitoring must be established. a clear and transparent register of operations, so that the Secretariat and other audit authorities can verify them regularly, in accordance with the applicable legal provisions.

Article 60.- In the event that irregularities are identified in the management of the resources of the Mexican Petroleum Fund, the sanctions mentioned in the provisions will apply. applicable legal.

Article 61.- The Secretariat shall include in the Federal Public Finance Account and in the Quarterly Reports on the economic situation, public finances and public debt, the income obtained by the Mexican State arising from the Contracts and the rights referred to in this Law.

TITLE SIXTH

FINAL PROVISIONS

Article 62.- The public servants of the Secretariat responsible for determining and verifying the economic conditions regarding the tax terms, as well as the servers (a) the public authorities of the Energy Secretariat responsible for awarding the allocations or the technical design of the contracts, as well as the technical guidelines to be observed in the tender process for these contracts, in terms of the guidelines issued by the Secretariat, with insurance, sureties or guarantees; to cover the amount of the compensation for the damages caused by his or her performance in the exercise of his or her privileges, or, insurance to assume the services of defense and legal assistance of such public servants. Such insurance, surety or caution shall not be part of the benefits of the public servants mentioned.

For this purpose, the Secretariat and the Energy Secretariat shall annually create the corresponding budgetary provisions in their operating expenditure budget.

In cases where the result of a firm administrative or criminal decision has been demonstrated, the public servant, or the commission of unlawful acts, has been shown to act in bad or bad faith. Finally, the supports and will be carried out in terms of the applicable legal provisions to demand the reimbursement of the supports that would have been paid.

Article 63.- The Secretariat may instruct the Tax Administration Service to carry out the audits referred to in Article 37 (B) VII. this Act.

Article 64.- For the purposes of this Act, as well as for the Income Tax Act, it is considered to be a permanent establishment when a resident in the (a) foreign nationals shall carry out the activities referred to in the Law on Hydrocarbons, in national territory or in the exclusive economic zone over which Mexico is entitled, in a period of more than 30 days in any period of 12 months.

For the purposes of the computation of the period referred to in the preceding paragraph, activities performed by a related party of the resident in the period shall be considered within the same period. abroad, provided that the activities are identical or similar, or are part of the same project. Related parties are those mentioned in article 179 of the Income Tax Act.

The resident abroad who constitutes permanent establishment in the country, in terms of the provisions of this article, will pay the income tax that is caused by compliance with the law of matter.

Income from wages, salaries and similar wages earned by foreign residents, paid by residents abroad without permanent establishment in the country or, having regard to a job related to the activities of the Contractors or Alsigners referred to in the Law on Hydrocarbons, carried out on national territory or in the economic zone exclusive on which Mexico is entitled, within a period exceeding 30 days in any period of 12 months, shall be taxed in accordance with Article 154 of the Income Tax Act.

ARTICLE SECOND. The following transitional provisions of the Hydrocarbon Revenue Act are set out:

I.               This Law shall enter into force on the day following that of its publication in the Official Journal of the Federation, except as provided for in Title III of the Law on Hydrocarbons Income, and other provisions related thereto. Title, which will enter into force on 1 January 2015.

II.              During the fiscal year 2014, Petróleos Mexicanos and its subsidiary organizations shall pay the rights provided for in Articles 254 to 261 of the Federal Law of Rights in force in such an exercise for the activities they carry out to the amparo de sus Allocations From 1 January 2015, they shall pay the rights provided for in Title III of the Hydrocarbon Revenue Act.

III.             Petroleos Mexicanos and its subsidiary bodies may request and obtain the migration to Contracts of the Assignments that are awarded to them in terms of the sixth transitional of the Decree for which they are reformed and added several Provisions of the Political Constitution of the United Mexican States, in Matter of Energy, published in the Official Journal of the Federation on 20 December 2013; if necessary, by the activities of Exploration and Extraction of Hydrocarbons arising from these Contracts will pay, during the 2014 financial year, rights under the Articles 254 to 261 of the Federal Law of Rights in force in that fiscal year. From the fiscal year 2015, Mexican Petroleum and its subsidiary bodies shall cover the State, in respect of the contracts referred to and the others resulting from migration from the financial year 2015, the payments to be determined in the Contract under Title II of the Hydrocarbons Revenue Act.

IV.            All payments to be made under an allowance or contract for the activities carried out during the financial year 2014 shall be made out to the Federation's Treasury. For the activities carried out from January 1, 2015, the corresponding payments shall be delivered to the Mexican Petroleum Fund for Stabilization and Development.

V.             Without prejudice to the provisions of the previous fractions, during the fiscal year 2014 Mexican Petroleum and its subsidiary bodies will be subject to the tax regime provided for in the Revenue Law of the Federation for the Fiscal Year 2014. From the fiscal year 2015, it will not be established in the Law of Revenue of the Federation corresponding to that tax regime, so Mexican Petroleum and its subsidiary bodies will be subject to the Law of Income Tax.

VI.            The Chamber of Deputies will make the necessary budgetary forecasts for compliance with the provisions of the Law on Hydrocarbons Income.

VII.           For the purposes of Sections I and II of Article 41 and the (a) and (b) of section I of Article 42 of the Hydrocarbon Revenue Act, instead of applying the percentages contained in those provisions, the following percentages shall apply during the fiscal years 2015 to 2018:

Fiscal Exercise

Percentage

2015

10,600%

2016

11.075%

2017

11.550%

2018

12.025%

VIII.          For the purposes of Articles 39 and 42 of the Hydrocarbon Revenue Act, instead of applying the rate contained in Article 39, the following charges shall apply during the fiscal years 2015 to 2018:

Fiscal Exercise

Rate

2015

70.00%

2016

68.75%

2017

67.50%

2018

66.25%

IX.            The Federal Government must, through development banks, establish vehicles or financing mechanisms, including funds, trusts and/or companies, and can count on the participation of the private sector, which will allow any natural or moral person, invest resources to finance the activities of recognition, exploration, extraction, transport, storage, marketing, distribution and related activities related to the hydrocarbon industry to be carried out in accordance with the terms of the Hydrocarbons Law and the Law of Income on Hydrocarbons. The Federal Government may also establish financial mechanisms or instruments to ensure the stability and certainty of the economic elements of the acts referred to in this law.

The specialized financial vehicle of the Mexican State referred to in Article 16 of the Law of Hydrocarbons may receive resources from vehicles or financing mechanisms that are established in accordance with the provisions of the first paragraph of this fraction. The above, without prejudice to other resources to be approved for the same purposes in the Federation's Government Budget and other sources of funding provided for in the Constitution and other applicable legal provisions.

X.             For the purposes of the provisions of Article 45 of the Hydrocarbons Law, the National Banking and Securities Commission, in accordance with the powers laid down in Section III, IV and V of Article 4 of the Law of the National Commission Bank and Securities to normalize the trade record, estimate of assets, liabilities and liabilities and disclosure of information, review the applicable legal framework and, where appropriate, make the appropriate adjustments to the Applicable regulations, in accordance with their legal powers, for reporting for accounting purposes and financial of the Allocations or Contracts, as well as the expected benefits of the same.

The appropriate adjustments should be considered at least the obligation of the Assigned and Contractors to deliver the report referred to the Mexican Petroleum Fund and the Secretariat, as well as to notify both the relevant events that, in terms of the applicable provisions, should be reported. The provisions of this paragraph shall be provided as an obligation under the respective Allocations and Contractors in the respective Allocations or Contracts.

TRANSIENT

First. This Decree shall enter into force on the day following its publication in the Official Journal of the Federation.

Second. During the exercises 2015, 2016, 2017 and 2018, the following is the following:

I.         When the total observed income of the Mexican Petroleum Fund for Stabilization and Development in the corresponding year is higher than the estimated revenue for the same year in question, in both cases By discounting the payments set out in section I of article 16 of the Mexican Petroleum Fund for Stabilization and Development Act and the Fund Reserve's yields, the Federal Government will deliver to the federal entities and (a) municipalities, under the budget of the Federation of the Federation of the following fiscal year, one the amount equivalent to the amount that would correspond to them as participations to be considered as participable, in terms of the Revenue Act of the year in question, the amount resulting from the discount of the surplus that is recorded among the income observed and the estimated revenue, the difference between the amount observed corresponding to the transfer of the Mexican Petroleum Fund referred to in Article 93 of the Federal Law on Budget and Liability and the estimate by the same concept contained in the Revenue Act of the Federation of the year concerned.

II.        When the resources received by the federative entities and the municipalities from the income that, in terms of this Decree, are integrated into the Participable Federal Collection according to the provisions of the third paragraph of the Article 2. of the Fiscal Coordination Law, are less than those that they would have received from having applied to the allocations in force in the corresponding year, the provisions of the Federal Law of Rights and the Law of Fiscal Coordination in force until before the The Federal Government will give to the federal entities and the municipalities, with charge to the Budget of the Federation of the Federation of the following fiscal year, an amount equivalent to the difference between the amount that it would have corresponded to them as participations in accordance with the above provisions; and amount actually observed in accordance with the third paragraph of Article 2. of the Tax Coordination Act.

The resources to be handed over to the federal entities and municipalities in terms of the fraction I of this transition will not be greater than 11.8 billion pesos in the financial year. corresponding. The Federal Government shall make the delivery of the resources which come under the preceding fractions I and II at the latest in the month of February of the following financial year.

Mexico, D. F., at 5 August 2014.-Dip. José González Morfin, President.-Sen. Raul Cervantes Andrade, President.-Dip. Javier Orozco Gómez, Secretary.-Sen. Rosa Adriana Díaz Lizama, Secretary.-Rubicas."

In compliance with the provisions of Article 89 of the Political Constitution of the United Mexican States, and for its proper publication and observance, I hereby express my request for the Decree at the Federal Executive Branch, in Mexico City, Federal District, at 11 August of two thousand fourteen.- Enrique Peña Nieto.-Rubrias.-The Secretary of the Interior, Miguel Angel Osorio Chong.-Heading.