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Mexico - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
The rate of the Impuesto Sobre Renta de las Sociedades (IRS) is 30% in 2005. The rate will be reduced to 29% in 2006 and 28% in 2007.
Moreover, companies set up in Mexico also have to pay under certain conditions a tax on net assets (TNA) of 1.8% on assets value (amount deductible from the corporate income tax).
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Taxe rate on long-term capital gains |
Capital gains are taxed in Mexico at the rate of 35%.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
The dividends shared by Mexican companies to nonresidents are not subjected to any deduction at the source.
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Tax rate on branches |
Branches of foreign companies have the same fiscal obligations as the Mexican companies. Branches are considered as stable place of business with fiscal purposes and are not subjected to any additional taxes in addition with those that Mexican companies have to pay.
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Income tax
Fiscal year |
The fiscal year begins on January 1st and ends on December 31st of the same year.
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Income tax rate |
The progressive rate of the personal income tax varies from 3% to 35%, according to the tax bracket.
| From 0 to 1389 MXN | 3% | | From 1389 to 11 792 MXN | 10% | | From 11 792 to 20 723 MXN | 17% | | From 20 723 to 24 090 MXN | 25% | | From 24 090 to 28 842 MXN | 32% | | From 28 842 to 58 170 MXN | 33% | | From 58 170 to 91 683 MXN | 34% | | From 91 683 to more than MXN | 35% |
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Tax deductions or
other allowances |
There are several types of deductions attributed to taxpayers in Mexico. You can find out the nature of all the deductions by contacting the fiscal administration of each region.
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VAT rates
Standard rates |
The rate of common law is 15%.
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Reduced rates |
2 reduced rates apply: 0% in the case of priority activities such as basic foods, medecines, agricultural, exports, etc. 10% when the activities are performed in the border region.
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Other important taxes
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Name of tax |
Rate |
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Tax on interests
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Between 10 and 15%
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Property tax
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average 2% of wages
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Tax on royalties
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10%
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Accounting
Introduction
The Mexican accounting model is modern and refers to international accounting rules.
All accounting procedures and recordings must be approved by a local body.
General accounting principles
BALANCE SHEET:
1) Assets
- Current assets
- Liquid assets
- Doubtful net provisions
- Employees
- Other
- Income taxes
- Inventories
- Total current assets
2) Equipment, machines: tangible assets
- Depreciations
3) Other assets
4) Total assets
| | | PROFIT AND LOSS ACCOUNT:
1) Net sales
2) Gross profit
3) Selling and general expenses
4) Running income
5) Cost of global financing
- Interests
Fluctuations
6) Profits before income tax
- Income tax
7) Net profit.
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Obligations and publications
The balance sheet, the profits and loss account and the balance are compulsory.
Certification and auditing
The accounting authorities are the audit department of the Ministry of Finance.
Professionals and representative organizations
The diplom of public accountant is necessary to profess in the country.
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Last modified in
January 2003
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