Mexico: Economic Reform Package and Tax Measures for 2020

In September 2019, Mexican President AMLO presented to Congress a comprehensive economic legislation package for the year 2020. He emphasized that the tax burden should not increase, but that tax collection must be strengthened. Consequently, the package also focuses on measures to combat tax evasion.

What tax measures does the package contain?

These are the main planned measures at a glance:

  • Join liability for persons responsible for the general management of legal persons (including shareholders, shareholders or associates)
  • A general anti-abuse rule (applies to a transactions without a “business reason” that generate tax benefits)
  • Provisions to combat tax evasion (for example electronic signature and digital stamps)
  • Disclosure of reportable systems by tax consultants
  • Provisions on the taxation of the digital economy and VAT and on digital services
  • Changes in international taxation for permanent establishments
  • Provisions on hybrid mechanisms
  • new limits for deductible interest when related parties or subsidiaries are involved
  • Withholding tax on interest payments by financial institutions

 

While minor changes are expected in the legislative process, experts believe that Congress will largely approve the legislative package.

 

These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!