Tax Rules Included In The Mexican Energy Reform - Tax - Mondaq Mexico - Mondaq Business Briefing - Books and Journals - VLEX 538962814

Tax Rules Included In The Mexican Energy Reform

Author:Mr Rodrigo Gómez
Profession:Jones Day
 
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On August 6, 2014, the Mexican Congress approved some of the secondary legislation related to the so-called Mexican Energy Reform. The approved laws were published in the Mexican Official Gazette on August 11, 2014. Among the approved secondary legislation is the Hydrocarbons Revenues Law, which includes: (i) special tax provisions for governmental and nongovernmental entities entering into agreements for the extraction and exploration of hydrocarbons; and (ii) a new hydrocarbons tax applicable to these entities.

The most relevant special tax provisions are:

Special depreciation yearly rates applicable for assets and investment for the exploration and extraction of hydrocarbons, such as: (i) 100 percent depreciation rate for investments made for the exploration activities; (ii) 25 percent depreciation rate for investments made for the development and extraction of oil and natural gas; and (iii) 10 percent depreciation rate for investments made for the warehousing and transportation activities that are indispensable to complying with the agreements. Specific rules dealing with the way in which several entities participating as a "consortium" (for the exploration and extraction of hydrocarbons) could identify its accruable income and authorized deductions to calculate individual income tax. A tax loss carry-forward term of 15 years (the general carry-forward period provided in the Mexican Income Tax Law is 10 years), for those taxpayers that carried out activities in maritime zones with a flow depth greater than 500 meters. A special 0 percent valued tax rate applicable for transactions...

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