On September 8, 2015, the Executive branch submitted a tax bill to the Mexican Congress which contains several amendments to the federal tax laws currently in force. If approved, the proposed amendments would apply in 2016.
The proposed bill for tax year 2016 will be subject to discussion and approval by the Mexican Congress and thus the information contained herein may be subject to change.
Some of the most important modifications that are being proposed are the following:
It is proposed:
To eliminate the generality principle applicable to social welfare benefits given to non-union workers, as well as to eliminate the specific limits to deduct such benefits. To exclude from the thin capitalization computation the debts incurred in connection with the investment in infrastructure related to electric power generation. To include the obligation of filing new informative tax returns of related parties: i) master informative return of the business multinational group; ii) local informative return of related parties; and iii) country by country informative return of the business multinational group. This new rule would apply to those taxpayers that are required to file an informative return regarding their tax situation, except for those legal entities resident in Mexico that are required to file such informative return as a consequence of the transactions carried out with foreign residents. That those taxpayers engaged exclusively in the generation of energy from renewable sources or cogeneration systems of efficient electricity, would be entitled to maintain a profit account for investments on energy sources, instead of the net after tax profit account (CUFIN). The additional tax on dividends would not apply for those dividends that are distributed from the profit account for investments on energy sources. To allow for tax years 2016 and 2017 (and for the last quarter of 2015) the accelerated deduction of investments for: i) individuals and legal entities whose income does not exceed 50 million pesos; ii) taxpayers that carry out investments in construction and expansion of infrastructure, such as roads, highways and bridges; and iii) taxpayers that invest in activities regulated by the Hydrocarbons Law (except for superficial...