Presidential Decrees granting Tax Benefits Mexico

Transcripción

1 Mexico February 2017

2 Capital repatriation

3 Capital repatriation Basics Published January 18, In force since January 19, until July Applicable to: Individuals Corporations Foreign residents with a permanent establishment in Mexico Galaz, Yamazaki, Ruiz Urquiza, S.C. 3

4 Capital repatriation Basics (2) For income obtained from direct and indirect investments held abroad until December 31, The income to be return has to be levied for Income Tax purposes: Title II for corporations Title IV for individuals Title VI for foreign residents with a permanent establishment 2017 Galaz, Yamazaki, Ruiz Urquiza, S.C. 4

5 Capital repatriation Not applicable to: Those who are subject to audit by SAT (article 42 section II, III, IV and IX of the Federal Tax Code), in specific with the income obtained from direct and indirect investments held abroad, cannot apply the tax incentive. Cabinet reviews, domicile visits, review to the auditor s report, electronic audit. Income from an illegal activity. Income that has been deducted by a resident in Mexico or by foreign residents with a permanent establishment Galaz, Yamazaki, Ruiz Urquiza, S.C. 5

6 Capital repatriation Main rules The repatriated capital must remain in the country for a minimum of 2 years. The return of capital must be made through institutions from the financial system or brokerage houses. The returned capital should be allocated to the following investments :. Fixed assets. Land and buildings located in Mexico. R&D. Payment to creditor, that are not related parties. Investments in Mexico through financial institutions or brokerage firms Galaz, Yamazaki, Ruiz Urquiza, S.C. 6

7 Capital repatriation Tax incentive The fiscal incentive consists of, applying the 8% rate to the total of the returned capitals, without deduction. The income tax paid abroad can be credited against the tax. The tax must be paid no later than 15 calendar days after the date on which the capital is returned. The returned capital creates taxable base for PTU The returned capital creates CUFIN (taxable profit account to distribute dividends) Galaz, Yamazaki, Ruiz Urquiza, S.C. 7

8 Accelerated depreciation

9 Accelerated depreciation Basics Published January 18, In force during 2017 and Applicable to: Individuals (Title IV of the Income Tax Law) Corporations (Title II of the Income Tax Law) Which in the immediately previous fiscal year had obtained income up to 100 million pesos (5 million dollars approx.) 2017 Galaz, Yamazaki, Ruiz Urquiza, S.C. 9

10 Accelerated depreciation Tax incentive These taxpayers may choose for the accelerated depreciation of the investment of new fixed assets in the year in which they are acquired, deducting the amount that results from applying to the original amount of the investment, the rates established in the Decree, instead of those provided for in Articles 34 and 35 of the Income Tax Law. The option may not be exercised in the case of furniture and office equipment, automobiles, armor equipment, or any property of fixed asset that can not be individually identified, or in the case of airplanes other than those used for aerial fumigation agricultural Galaz, Yamazaki, Ruiz Urquiza, S.C. 10

11 Accelerated depreciation Deduction rates (sample) Construction 74% 57% Desktop and laptop computers, servers, printers, optical readers, etc 94% 88% Dies, molds and tooling 95% 89% For machinery and equipment used in the manufacture of parts for motor vehicles; In the manufacture of metal products, machinery and professional and scientific instruments; In the manufacture of food and beverages, except grains, sugar, edible oils and derivatives. In the manufacture, finishing, dyeing and stamping of textile products, as well as garments for the dress. 82% 69% 86% 75% 2017 Galaz, Yamazaki, Ruiz Urquiza, S.C. 11

12 Contact Information Héctor Silva Tax Partner +52 (664) Blanca Montaño Tax Senior Manager +52 (664) Galaz, Yamazaki, Ruiz Urquiza, S.C. 12

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