Taxes and Accounting in Mexico

Overview by Globlatrade.net:

Accounting Rules

Tax Year
The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting Standards
The Accounting system used in Mexico is modern and international.  It follows the same double ledger pattern, which is compatible with most of the European accounting systems. Mexican GAAP with incresing conformity to international standards.
Accounting Regulation Bodies
Mexican Council of Investigation and Development of Financial Information Standards
Accounting Reports
There are two essential structures:

- The balance sheet, which reflects the situation of the enterprise and provides the information about the assets, liabilities and capital on a particular date (the last day of the fiscal year).

- The profit and losses report, which shows the results of all financial activities of the enterprise in a given period of time, could be each trimester or each year.  It reflects the income, expenses, loss and profit obtained during that particular period.

Publication Requirements
The balance sheet, the profit and loss account staments and the daily ledger are mandatory. Accounts are published annually.
Professional Accountancy Bodies
Mexican Institute of Public Accountants
School of Public Accountants of Mexico
Certification and Auditing
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact an external auditor: Deloitte & Touche , Price Waterhouse Coopers.
Accounting News
Impuestum

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT (Value Added Tax) called "Impuesto al Valor Agregado - IVA"
Tax Rate
16% -  Value Added Tax Laws
Reduced Tax Rate
11% for the activities of enterprises located in a frontier zone. Exports are subject to a rate of 0%, as well as basic foodstuffs, agricultural services related to the production of them and medicines.
Other Consumption Taxes
Special Production and Services Tax Law (applied to alcoholic beverages, elaborated tobacco, gasoline and diesel). Laws for New Automobiles.
 
Find Tax Professionals in Mexico on GlobalTrade.net.
 

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Corporate Taxes

Company Tax
30%
Tax Rate For Foreign Companies
All legal entities that according to the Federal Tax Code  are considered Mexican residents are taxed for worldwide income received, depending of their activity or social object, in any of the following regimes:

- Legal entities of general regimen
- Legal entities non-profit
- Legal entities of simplified regimen

Legal entities that are not residents, must pay taxes in Mexico when they earn an income from a source of wealth located in Mexican territory (income tax and flat rate corporate tax).

Capital Gains Taxation
A flat tax (IETU) has been set up. It represents the minimum corporate tax on capital gains. The rate is 17%.
Main Allowable Deductions and Tax Credit
The expenses for establishing a business can be deductible if they are backed up properly, some of them can be: real estate acquisition expenses, VAT, contributions to third parties, etc.  For more information, consult the site of Mexican Federal Tax Administration
Other Corporate Taxes
For information on the other taxes levied on companies in Mexico, access Mexconnect.

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Individual Taxes

Tax Rate

Rate imposed on an individual's income Vary from 3% to 28% according to the monthly tax bracket.
from MXN 0 to 496 3%
from MXN 497 to 4,120 10%
from MXN 4,121 to 7,399 17%
from MXN 7,400 to 8,601 25%
8,602 and more 28%
Allowable Deductions and Tax Credit
There are several types of deductions attributed to taxpayers in Mexico. You can find out the nature of all the deductions by contacting Mexican Federal Tax Administration.
Special Expatriate Tax Regime
If a foreigner resides in Mexico for business purposes for more than 183 days per year, he can obtain a special tax rate, however there are no special deductions for expatriates.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of financial agreements signed between Mexico and other countries
Withholding Taxes
Dividends: 0%, Interest: 4,9% / 30% / 40%, Royalties: 25% / 30%

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Sources of Fiscal Information

Tax Authorities
Mexican Federal Tax Administration
Other Domestic Resources
Ministry of Finances and Public Credit

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Find more on GlobalTrade.net about Taxes and Accounting in Mexico.
 

Intellectual Property

National Organizations
Mexican Institute of Industrial Property
National Institute of Copyright (in Spanish)
Federal Copyright
Regional Organizations
World Intellectual Property Organization
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Industrial Property Law
20 years Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
Trademark
 
Industrial Property Law, Article 16
10 years Trademark law treaty
Nice agreement
Design
 
Copyright Law
75 years after the death of the author  
Copyright
 
Copyright Law
75 years after the death of the author. Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Law of Industrial Property
20 years  

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Legal Framework

Independence of Justice
The Judicial power is free and independent, however it is contaminated by the corruption.
Equal Treatment of Nationals and Foreigners
Yes, foreigners are entitled to impartial justice.
The Language of Justice
Spanish
Recourse to an Interpreter
Yes, as long as it is an official certified translator.
Sources of the Law and Legal Similarities
The Political Constitution of Mexico is the basis of the legal system in Mexico.  The judicial system is a combination of constitutional theories and American civil rights in addition to judicial revisions of different legislative statutes. Mexico accepts compulsory jurisdiction from the International Court of Justice but with reservations.
Checking National Laws Online
Federal Legislation
 
Find Legal Experts in Mexico on GlobalTrade.net.
 

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Business Practices

General Information
Enterprises Center Mexico - European Union
Mexperience
Opening Hours and Days
Banks are open to the public from Monday to Friday from 9 AM to 4 PM.
Public administration offices are also open from Monday to Friday from 9 AM to 2 PM.
Businesses are open from Monday to Friday from 10 AM to 6 PM and Saturdays from 10 AM to 8 PM.  It is not unusual to find businesses open on Sundays.
 

Public Holidays

New Year's January 1st
Mexican Constitution's Day First Monday in February
Benito Juarez's Anniversary Third Monday in March
Good Thursday and Good Friday It falls sometime between March 20 and April 25
Labor Day May 1st
The Battle of Puebla's Day May 5th
Mexican Independence's Day September 16
Columbus Day October 12
Day of the Dead November 1st
Mexican Revolution's Day Third Monday in November
Our Lady of Guadalupe's Day December 12
Christmas December 25
 
Holiday Compensation
Only the anniversaries of the Constitution, Benito Juarez and Mexican Revolution will be held on Monday if the date falls on weekend.
 

Periods When Companies Usually Close

Christmas Vacations One week from December 25 to December 31, depending on the enterprise.
Holy Week Vacations The last week before Easter.
Summer Vacations One week anytime in between July and August.
 

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  • Ease of Doing Business in Mexico 2011

    Annual report investigating regulations that enhance business activity and those that constrain it. for 183 countries. Courtesy of The World Bank and The International Finance Corporation.

    Southern Border Logistics on 31 Aug 2011 related to Taxes and Accounting in Mexico

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