Budget 2013: Mexico Reforms Tax Provisions
(Sunnyvale, CA)- The Mexican budget, approved by the Congress, has been published in the Official Gazette on
December 17, 2012.
Mexico Budget 2013: Highlights
Income Tax: Major Changes
Income tax rate remains at 30% in 2013
A withholding tax of 4.9% has been imposed on interest paid to non-resident banks which are resident in
a country having a tax treaty in force with Mexico.
As per existing provisions, Mexican companies with foreign pension funds as shareholders are tax exempt,
in proportion of the pension funds’ participation in the Mexican company, provided 90% of their total
receivables are derived from:
The transfer of ownership of property or rent of land or buildings located in Mexico, or
The transfer of ownership of shares deriving more than half of their value from land and buildings located
For the calculation of this 90% of receipts, annual inflation adjustment is excluded. Also, foreign exchange
gain on any debts incurred for the acquisition of property located in Mexico would be excluded.
Non-residents who carry out activities subject to the general income tax, and under a maquila programme
authorized by the Government (Secretaría de Economía) would not be considered to have a permanent
establishment in Mexico, if they satisfy the below conditions:
The non-resident and the enterprise operating under maquila are not directly or indirectly related parties;
Information (as may be requested by the Tax Administration Service) about the maquilla related
operations is submitted by the non-resident company to the Tax Administration Service before July 2014.
Some IETU (Business flat-rate tax) adjustments reflected in the budget are:
Taxpayers would have to continue to submit informative returns (information would also be required to
be provided concerning the concepts which have been used to determine the tax base).
Set off of excess deductions of IETU tax credit against income tax liability in the tax year in which such
excess was incurred will not be permitted.
For more information on this topic email email@example.com
Get the latest press releases and updates on international tax, HR, Finance, compliance and other legal news
at Nair & Co. Industry Alerts.
Know more on:
internal audit compliance
doing business overseas
international business expansion