Tax Reform 2014 – Accounting Services in Mexico

The last December 9th and 11th 2013, the Official Journal of the Federation published the laws which reform, add and abolish several fiscal provisions that will come into force, mostly from January 1st 2014.

TAX ON CASH DEPOSITS (IDE), FLAT TAX (IETU)

These taxes will be abolished from January 1st 2014.

INCOME TAX LAW (LISR)

  • Application of the treaty to avoid double taxation. 

The benefits of the treaties to avoid double taxation, will be applied only to those who accredit the fiscal residence in their living country and meet the provisions in the treaty, as well as showing their informative statement about the fiscal situation, it isn’t clear the way how this provision will be enforced, because the Mexican authority can’t extend their faculties in a matter of compliance of obligations from foreign residents, those treaties don’t establish such a faculty.

To apply for the benefits established in the treaties to avoid double taxation for procedures made between related parts, the fiscal authorities could ask the taxpayer living abroad to prove the existence of a juridical double taxation through the statement under protest of saying the truth, sing by their legal representative, indicating that the income subject to imposition in Mexico, and for those who are planning to apply the
benefits of the treaty, are taxable income in the country of residence.