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3.9. Authorized Donees

3.9.1. The Tax Administration Service [Sistema de Administración Tributaria – SAT] shall authorize civil
organizations and fiduciaries to r eceive deductible donations as per Article 31 (I), except subsections a)
and f), and Article 176(III), except subsections a) and f) of the Income Tax Law (ISR Law), as well as per
Article 31, second paragraph and Ar ticle 114 of its Regulations. The authorization shall be granted by
publishing the information of such civil organizations and fiduciaries in Annex 14 of the resolution in the
Official Journal of the Federation (Diario Oficia l de la Federación -DOF) and on the SAT webpage:
www.sat.gob.mx .

The Federation, the Federal District, states, and municipalities, as well as their autonomous agencies and
decentralized entities that pay taxes according to Title III of the Income Tax Law are authorized by law to
receive deductible donations, and, therefore, are not required to obtain any further authorization or to be
published as indicated in the previous paragraph.

The annex to which the first paragraph of this regul ation refers will include the following information of
the authorized donees:

a) The federative entity in which it is located;
b) The corresponding local judicial administration;
c) Its activity or authorized purpose;
d) Its code in the RFC (Federal Taxpayer Registry);
e) Its firm name or trade name; and
f) Its legal domicile.

The information included in this annex is that whic h the civil organizations and fiduciaries have stated
before the tax collection agency and the General Judi cial Administration, with respect to their trust.

Prior to the publication to which the first paragraph of this regulation refers, the local judicial
administration that corresponds to the legal domicile of the civil organization or fiduciary shall issue an
official letter to inform the requesting parties that all of the requirements and formalities to obtain the
necessary authorization have been completed.

The civil organizations or fiduciaries that receive the proof of authorization previously mentioned shall be
allowed to receive deductible donations as well as to request from the authorized issuers their tax records,
which shall include, in addition to the requirements provided by other tax provisions, the number and date
of the resolution in order to issue the corresponding receipt.

To obtain the authorization, the interested parties shall submit written proof before the Local
Administration for Tax Assistance that corresponds to their legal domicile, which shall also fulfill the
requirements of Articles 18 and 18-A (I, III and VII) of the Code. The interested parties shall indicate, as
appropriate, the domicile, electronic mail address a nd telephone numbers of their offices or expressly
declare that they have none. In addition to any docu ment required by other tax regulations, the interested
parties shall also provide a copy of the tax payer identification of the civil organization or fiduciary in
question, as registered in the RFC. For these purpo ses, the interested parties may use the template
included on the SAT webpage:
www.sat.gob.mx .

Prior to submitting their request for authorization, ci vil organizations and fiduciaries may appear before
the local judicial administration that corresponds to th eir legal domicile to jointly analyze the documents
that they intend to submit with respect to their tr ust, so that the authority verifies that the civil
organization or fiduciary in question complies with all the requirements established by tax regulations.
Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.

This may be done prior to the notarization of the articles of incorporation and/or corporate statutes, or
before signing the contract that establishes the respective trust.

In as much as the assumptions upon which the authori zation was granted remain in effect and the civil
organization or fiduciary complies with all fiscal re quirements and obligations, a renewal process shall
not be necessary. The SAT shall include the authorized donee anew in Annex 14 of the present resolution
and on the SAT webpage,
www.sat.gob.mx , when issuing the resolution for the following year.

For the purpose of that which is the stipulated in th e previous paragraph, in January of each year, civil
organizations or fiduciaries shall submit to the Local Administration for Tax Assistance that corresponds
to their legal domicile written proof of having me t the requirements established in Articles 18 and 18-A
(I, III, and VII) of the Code. They shall also declar e under oath compliance with all tax requirements and
obligations to maintain their status of authori zed donee. For these purposes, civil organizations or
fiduciaries may use the template included on the SAT webpage:
www.sat.gob.mx .

With respect to the trust in question, civil organiza tions and fiduciaries to which authorization is granted
to receive deductible donations for the first time, shall comply with the obligation referred to in the
previous paragraph beginning with the second fiscal year following the one for which they were initially
authorized.

The civil organizations and fiduciaries authorized to receive deductible donations shall inform the Local
Administration for Tax Assistance that corresponds to th eir legal domicile of any change in their legal
domicile, firm or trade name, RFC, suspension or renewal of activities, termination, liquidation or
dissolution. This shall be done in writing according to the requirements set forth in Articles 18 and 18-A
(I, III, and VII) of the Code. The written document sh all be submitted within a 10-day period following
the day in which the corresponding notice was sent to the tax authority in the terms set forth by the
applicable tax provisions, and shall be accompanied by a copy of the notice.

In addition, civil organizations or fiduciaries shall inform of any change in their social activity or
purposes, or any other requirement that was considered when issuing the respective authorization, within
a 10-day period following such a change.

Similarly, in case that the authorization of the corresponding social service or assistance institution is
terminated, the civil organization or fiduciary sha ll give notice to the Local Administration for Tax
Assistance that corresponds to their legal domicile of the respective records, the legal effect of the
document submitted, the authorization or recognition of the official validation of studies in the terms set
forth in the General Education Law, the registration in the National Registry of Scientific and
Technological Institutions of the National Science and Technology Council, the agreement of
collaboration or economic support with the beneficiar y donee or any other document that may have
served to authorize the social activity or purpose of the civil organization or fiduciary. This shall be done
in writing according to the requirements set forth in Articles 18 and 18-A (I, III, and VIII) of the Code,
and submitted within a 10-day period following th e day in which the event occurred. The civil
organization or fiduciary shall also submit a new authorization, record, recognition, registration,
agreement or any corresponding document in effect.

3.9.2. The SAT shall revoke or not renew the authori zation of corporate entities or fiduciaries to receive
deductible donations for any of the following reasons:

I. When the assumptions upon which the authorization w as granted change or are not in line with the
authorization;

Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.

II. When in exercising its verification authority, the SA T discovers that the corporate entity or trust has
failed to fulfill a requirement or their corresponding tax obligations;

III. When as set forth in the tenth, twelfth, and thirteenth paragraphs of provision 3.9.1 of this
resolution, written documents or notices are not submitted; and

IV. A new authorization is not granted, except when the tax authority makes an exception.

Donations made to corporate entities or fiduciaries whose authorization has been revoked shall still be
deductible if such donations are made prior to the publi cation of the revocation in the Official Journal of
the Federation.

Notwithstanding the procedures of the tax authorities required by law, the SAT will make the revocation
known by publishing it in the Official Journal of the Federation and by posting it on the SAT website:
www.sat.gob.mx .

After considering the infraction, the SAT may issu e a new authorization if the corporate entity or
fiduciary commits itself to comply again with any unfulfilled condition, requirement and tax obligation.

3.9.3. With respect to the various assumptions a nd requirements of the ISR Law and its Regulation on
receiving deductible donations, the following will be established:

A. An authorized social activity or purpose is unders tood exclusively as the activity included in the
articles of incorporation and/or statutes of the respective corporate entity or trust contract for which
accreditation was granted and the respective authorization was published.

B. Civil organizations and fiduciaries may apply de ductible donations received to other additional
activities included in their respective articles of incorporation and/or statutes, or trust contract, in
accordance with the assumptions of Articles 95(VI, X, XI, XII, XIX, XX), 96, 98, and 99 of the ISR
Law, as well as Article 31, second paragraph, and Arti cle 114 of its Regulation. For this purpose, the
corresponding request for authorization shall be submitted to the Local Administration for Tax
Assistance that corresponds to their legal domicile. Th e request shall be submitted in the form of a
written document that meets the requirements set fort h in Articles 18 and 18-A (I, III, and VIII) of the
Code. Civil organizations and fiduciaries shall also submit a document that verifies their fulfillment in
the terms set forth by the applicable tax provisions, without requiring a new publication in the Official
Journal of the Federation or a new posting on the SAT webpage:
www.sat.gob.mx .

C. For the purposes of that which is established in Article 11 of the Regulations of the ISR Law,
fiduciary institutions shall be the ones requesting th e respective authorization in the form of a written
document that meets the requirements set forth in Articles 18 and 18-A(I, III, and VIII) of the Code.
The written request shall be submitted to the Local Administration for Tax Assistance that
corresponds to the domicile of the respective trust. For these purposes, fiduciary institutions may use
the template included on the SAT webpage:
www.sat.gob.mx .

D. Private charitable or welfare institutions or associa tions authorized by law to carry out any of the
activities indicated in Articles 95 (VI, X, XI, XII, XIX, XX), 96, 98,
and 99 of the ISR Law, as well
as Article 31, second paragraph, and Article 114 of its Regulation, shall be authorized to receive
deductible donations from this contribution, as long as they comply with the additional requirements
established for these categories.

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E. With respect to Article 95 (XIX), first assumption of the ISR Law, the defined geographic areas to
which this precept refers are the ones incl uded in Annex 13 of the present Resolution.

F. With respect to Article 111 (II) and the last paragr aph of the Regulations of the ISR Law, as well as
the documentation that verifies that the entity in question falls into the assumptions to be an
authorized donee, the following aspects will be considered:

1. The tax authority may exempt civil organizations and fiduciaries from submitting such
documentation during a period of up to six months counted from the date that the authorization
notice takes effect, when the civil organizati ons and fiduciaries conduct the activities to which
sections VI, XII, clauses a), b), and c) second assumption, and XIX, second assumption of Article
95 of the ISR Law refer, and which fall under the following assumptions:

a. When the requesting entity has been incorporat ed for less than six months, counted from the
day the document by which it was constituted was authorized or the respective trust contract
was signed.
b. Over six months after the civil organization w as constituted or the respective trust contract
was signed, and the entity has neither begun opera tions nor developed any of the activities for
which it seeks authorization.

The requesting civil organization or fiduciar y shall explain in its written request and under
truthful affirmation, the reasons for not having been able to obtain the accreditation.

In any event, the authorization will be co nditioned upon the submission of all relevant
documentation; otherwise, the authorization will be without effect.

2. The document that serves to approve the ac tivities for which the civil organization and
fiduciary request authorization to receive deductib le donations shall be issued by the competent
federal, state, or municipal authority which, in compliance with their own competencies, shall
apply the legal provisions regulating matters that fall under the aforementioned activities. A
description of these activities, the domicile or location where they occur or the time to conduct
them shall be included.

In order to obtain approval for their activities, civil organizations and fiduciaries that seek
authorization to receive deductible donations, or those already authorized to do so whose social
purpose is to provide economic support to more than one authorized donee, or those who are
related to public works or services may submit once single adherence agreement that supports
this qualification with the different beneficiaries.

G. For the purposes of that which is established in Articles 31(I) and 176(III) of the ISR Law, as well as
Articles 31, second paragraph, 108 a nd 114 of its Regulation, donations given to an authorized donee
in order to have access to or participate in differe nt events, as well as those that give rise to receiving
a good, service, or benefit that these lend or give, sh all be considered onerous or remunerative and,
hence, are not deductible. The donation of services is prohibited.

H. Corporate entities or natural persons that give dona tions in the terms set forth in Articles 31(I) and
176(III) of the ISR Law must verify that vouchers submitted for this purpose include the same
identification information, such as RFC, name, firm name, social activity and legal domicile of the
authorized donee which, as such, shall be incl uded in Annex 14 of the present Resolution or made
known on the SAT webpage:
www.sat.gob.mx . Notwithstanding that which is set forth in paragraph
Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.

six, Provision 3.9.1. of this Resolution, authorized donees shall also meet all other requirements for
this type of voucher, so that these may be deductib le in compliance with all applicable tax provisions.

I. For the purposes of that which is established in Ar ticle 97(III) of the ISR law, authorized donees may
grant benefits over its distributable remnant to othe r civil organizations and fiduciaries different from
those indicated in such article, provided that these are authorized to receive deductible donations.

J. Civil organizations and fiduciaries authorized to receive deductible donations, whose social activity
or purpose is governed by Article 95(IV) of the IS R Law, shall carry out the assistance activities to
which this article refers. These activities shall be carried out exclusively in Mexico.

3.9.4. For the purposes of that which is established in Article 95(XII), paragraph d), libraries that are not
part of the national network of public libraries are included, provided that they are open to the general
public.

3.9.5. For the purposes of that which is established in paragraph 4, Article 69 of the Code, the SAT may
provide a directory of authorized donees which shall in clude, in addition to the information indicated in
paragraphs a) to f) of provision 3.9.1.of this R esolution, exclusively the following information:

a) Number and date of the record of authorization;
b) A brief description of the authorized activity;
c) Name of the legal representative;
d) Telephone number(s);
e) Physical or electronic address; and
f) Domicile(s) and telephone number(s) of its offices.

The directory to which this regulation refers is the same that the SAT shall post on its webpage;
www.sat.gob.mx . The information included shall be the same that the civil organizations and fiduciaries
have submitted to the tax agencies and the General Judicial Administration.

3.9.6. For the purposes of that which is established in the last paragraph of Article 110, of the ISR Law,
the distribution of administrative costs to which that provision refers shall only include costs directly
related to office or administrative activities.

3.10. Deductible Donations Abroad

3.10.1. Civil organizations and fiduc iaries authorized to receive deductible donations in Mexico that fall
under the assumptions established in Article 95(VI, X, XI, and XII) of the ISR Law, shall also request
authorization to receive deductible donations in the te rms established by the treaties to which Mexico is a
signatory party to avoid double taxation, as long as they comply with the provisions of this Chapter.

3.10.2 Civil organizations and fiduciaries to which this Chapter refers shall fulfill the following
requirements, as provided by Article 97(I) of the ISR Law:

They shall also fall under either assumption 1 or 2, as follows:

1. Receive at least one-third of its funds from the Federation, the Federal District, states or
municipalities or from direct donations from the general public, without taking into account any
income derived from the fulfillment of their social activities.

Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.

In the event that they do not fall under the assumption established in the previous paragraph, and they
receive at least 10 percent from said sources, wit hout taking into account any income derived from
the fulfillment of their social activities, civil orga nizations and fiduciaries must comply with the
following:

(a) Be incorporated and operate in such a way that it continuously attracts new public or
government funds or obtains additional funds to those already received, and
(b) Be a civil organization or fiduciary that receiv es funds from the Federation, the Federal District,
states or municipalities or the general public and comply with the following:

i. Receive funds from government entities or the general public, but such funds shall not
come from one single person or persons relate d by kinship as determined by civil law;
ii. Be administered by a board that represents the general interest instead of a particular or
private interest of a limited number of donors or persons related to those donors;
iii. Use or allow the continuous use of its physi cal structure or provide services for the direct
benefit of the general public, such as museums, libraries, nursing homes, and centers for
training purposes, for the promotion of the arts or for health services for the sick;
iv. Use the services of persons that have specializ ed knowledge or experience in the subject
areas related to social activities of the entity;
v. Maintain an ongoing work program that comp lies with any of the assumptions set forth in
Article 97 of the ISR Law and that constitu te its social activity or purpose; and,
vi. Receive a significant amount of its funds from any of the entities described in Articles 96
and 97 of the ISR Law, and assume some responsibility with respect to the use referred to
in these articles, as a requirement for its granting.

Taking into account the percentage of the income derived from funds received from the Federation, the
Federal District, states or municipalities and from dire ct or indirect donors from the general public, and
evaluating the nature or importance of the social activit y or purposes of the civil organization or fiduciary
and the length of its incorporation, the SAT may dete rmine which of the requirements referred to in items
1 and 2 of this provision are most essential to consider a civil organization or fiduciary as having
complied with Article 97(I) of the ISR Law.

For the purposes of that which is established in this provision, donations from the general public are those
that do not exceed more than one percent of the in come received by the person, civil organization or
fiduciary authorized to receive de ductible donations in the period in question, as well as donations derived
from the corporate entities described in Articles 97 a nd 98 of the ISR Law, regardless of the amount.

2. Receive more that one-third of its income from donations, sale of merchandise, rendering of services,
or granting of the use or enjoyment of goods, provided that the income is derived from an activity
substantially related to the deve lopment of its own social purpose. To this effect, the following
amounts shall not be included:

(a) Amounts received from corporate entities or natu ral persons or from government bodies, in the
amount exceeding 75 thousand pesos (75,000) in the ca lendar year in question, or one percent of
the income of the organization during the sa me year, whichever is the larger amount.

(b) The amounts received from persons not qualified in accordance with that which is set forth in
provision 3.10.3 of this Resolution.

3.10.3 For the purposes of that which is established in provision 3.10.2, number 2, paragraph b) of this
Resolution, the following are not qualified persons:
Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.

I. Those that donate or bequeath important amounts, considering as such amounts greater than 75
thousand (75,000) pesos, provided that the amount is greater than 2 percent of the donations or
bequests received by the organization in the cale ndar year in which those donations or bequests are
made. A natural person is considered a donor or devisor for the amounts donated or bequeathed by
the spouse.

An important donated amount is one that is tr ansferred through a trust, when such a donation is
greater than the amount or the percentage mentioned above.

A person considered an important donor in an estab lished period of time, shall be considered as such
in the future.

II. Those that administer the donee organization.

III. Direct or indirect holders of more than 20 percent of the voting stocks in a corporation or those who
receive benefits or profits in a greater percentage from an association or trust, provided that the
corporation, association or trust is an important donor to the organization.

IV. Spouses, ascendants, and descendants up to the fourth degree of any of the persons described in the
previous clauses, as well as the spouses of the aforementioned descendants.

V. Corporations, associations, trust or successions in which any of the persons described in these clauses
is the direct or indirect holder of more than 35 percent of the voting stocks or those who receive
benefits or profits in a greater percentage.
Not an official translation. 2005 Copyright by the International Center for Not-for-Profit Law.