Executive Order For The Repatriation Of Funds In 2017 - Tax - Mondaq Mexico - Mondaq Business Briefing - Books and Journals - VLEX 663057737

Executive Order For The Repatriation Of Funds In 2017

Author:Mr Gerardo Nieto Martínez, Gil Alonso Zenteno, Alejandro Barrera, Victor Barajas and Mario Barrera
Profession:Basham, Ringe y Correa, S.C.

On January 18, 2017, there was published in the Federal Official Gazette an "Executive Order providing for income tax incentives for the repatriation of deposits or investments maintained abroad" (the "Order"), so as regularize the taxpayer's tax liability by the payment of the income tax at a reduced rate and with no additional government charges.

The Order contemplates a tax incentive for taxpayers who are residents of Mexico on income derived from direct or indirect investments (such as corporate structures) mantained abroad up to December 31, 2016.

The tax incentive consists in applying an 8% income tax rate (without inflation adjustments or government charges) on income and investments being repatriated into the county, within six months following the effective date of the Order. Taxpayers are required to invest such income and investments, within two years, in any of the following:

For Business entities: Acquisiton of deductible fixed assets; Acquistion of land and other real estate; Technolgoy research and development (R&D) in taxpayer's projects; Payment of liabilities derived from third party transactions, as well as payment of taxes, goverment fees or wages, and Financial investments through Mexican banks and other financial institutions or brokerage houses. For Individuals: Acquisiton of deductible fixed assets; Acquisiton of land and other real estate...

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