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Perspectives

Mexico’s 2020 tax policy reform

On 30 October 2019, Mexico’s Senate approved the final 2020 tax reform package. Unless otherwise noted, most of the measures became effective on 1 January 2020. Explore the tax reform package below to understand how these new policy changes may affect your business.

Final 2020 tax reform package approved

On 8 September 2019, Mexico's president presented to Congress a series of proposed tax measures as part of the 2020 budget, including changes to the Income Tax Law, the Value Added Tax (VAT) Law and the Federal Tax Code (FTC). No changes are proposed to the existing tax rates (ie corporate, VAT or personal tax rates), but there are various measures to tackle tax avoidance and / or evasion, based on the recommendations of the OECD under the BEPS action plan, including restrictions on the deduction of interest, hybrid arrangements and the definition of a permanent establishment (PE).

Further, the government is proposing the taxation of foreign providers of digital services — such providers would be required to collect VAT from Mexican users and pay it to the Mexican tax authorities (SAT) and operators of digital platforms would have to withhold income tax on certain payments to Mexican resident individuals. Unless otherwise noted, most of the measures became effective on 1 January 2020.

International Tax: Mexico highlights 2019

This bulletin covers Mexico’s International Tax highlights. It includes the following information:

  • Investment basics
  • Corporate taxation
  • Withholding tax
  • Taxes on corporations
  • Anti-avoidance rules
  • Compliance for corporations
  • Personal taxation
  • Taxes on individuals
  • Compliance for individuals
  • Value added tax
  • Source of tax law

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