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Mexican Maquiladoras

2013 Mexican Federal Revenue Law

Mexican MaquiladorasBy Adina Moloman

Source: PWC

The 2013 Mexican Federal Revenue Law was published in December 2012 and entered into force on January 1, 2013.

This is the first Federal Revenue Decree issued by President Enrique Peña Nieto’s new Mexican government, it will maintain the current tax structure and implemented a delay to the proposed cut in corporate income tax.

This info concerns mainly the transnational corporations located in Mexico that are operating under a Mexican legal entity. For tax purposes the Mexican Maquiladoras are treated just as any other Mexico Corporation.

The applicable annual rate of Income Tax is 30% and was expecting a decrease to 29% during 2013 and eventually returns to 28% in 2014 as it was in 2009. According to this decree the change of the corporate income tax rate to 29% will enter into force on January 1, 2014.

The Mexican Federal Revenue Law also mentions that: the withholding tax on interest paid to banks resident in countries with which Mexico has an operational tax treaty remains at 4.9%; transnational corporations engaged in maquila operations through a Mexico Shelter Company are subject to an exemption from permanent establishment rules at least until December 31, 2013; there is no change in the income tax exemption for any financial derivative transactions in which a portion of the swap refers to the interbank interest rate (TIIE) and also there is no change  in the provisions regarding overseas pensions and also the flat tax. The duties for discharging residual waters extends till December 31, 2013 and the rates applicable to beer and alcoholic beverages are remain the same in 2013.

Amnesty program for taxes payable until end-2012 are included, that mentions the following: for the past fiscal years up to 2006, the program provides an 80% reduction in a taxpayer’s tax liabilities and 100% of late interest, if the balance is paid in lump sum to the Administration of Taxation (SAT); for the years between 2007 though 2012, there will be a full exemption from penalties and interest if 100% of the tax liability is paid to SAT.

 

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