Bulletin/Mexican Tax Reform
Please be advised that on September 8, 2013, the Mexican President Enrique Peña Nieto submitted to congress (lawmakers) the Tax Reforrn proposal.
The tax reform initiative highlights the following issues:
- Eliminate the Tax Consolidation Regime and eliminate or narrow the Simplified Regime, the immediate investment deduction, and the deduction on restaurant consumption, among other matters;
- Increase the rate from 30% to 32% for those with income in excess of $500,000 pesos per year;
- Limit the amount of personal deductions which may be taken in one year to 10% of the gross income of the taxpayer or the equivalent of two minimum wage salaries per year, whichever is less;
- Tax earnings on the Mexican Stock Exchange and the dividends companies pay to their shareholders at a rate of 10%;
- Include a Tax Incorporation Regime allowing for entry to the formal sector of businesses with income of up to $1,000,000.00 pesos per year;
- Standardizing the border rate with the rest of the country for a rate of 16% nationwide Eliminating exemptions for educational services (tuition), mortgage interest payments, sale and rent of residential housing and temporary imports;
- Limiting tax exemption only to the provision of public passenger ground transportation services provided exclusively to urban, suburban, or metropolitan areas; and
- Eliminate the Business Flat Tax Law and the Cash Deposit Tax Law.
This important reform is currently under review by lawmakers. We will keep you posted on further developments.
Ernesto Velarde Danache, Inc