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Mexico proposes tax amendments for 2010
Introduced in early September, the Mexican member of the Taxand network discusses the proposed tax amendments for 2010. Learn how these amendments could affect multinational companies. Income tax, tax on deposits, federal tax code, special tax on production and services, federal revenue law and poverty combat contribution law are all highlighted in the attached newsletter.
If the proposed amendments prosper the international competitiveness of the actual income tax rate of 28% could be affected by raising it to 30% during the next three years; this would affect multinational companies in their foreign tax credit if the overall tax paid outside of Mexico is lower than 30%. In addition, Groups that file consolidated tax returns in Mexico, who benefit from deferral of tax by offsetting losses and gains of subsidiaries, could be seriously affected in their cash flows as the deferral benefit will be limited only to five years, after which the deferred tax has to be paid to the Mexican Government in anual installments. All these issues are being discussed in Congress, and the final amendment bill is expected no later than mid November of this year.
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