Doing Business

Doing Business in Mexico 2015

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116 Tax and Legal Services - PwC Mexico Capital taxation Companies No tax is payable on the basis of the value of a company upon incorporation or upon issuance of shares (except for relatively minor state incorporation fees). Individuals There is no tax payable on total wealth or on the value of assets (see Chapter 15). Dividend taxation Legal entities are taxed at a rate of 42.86% of the value of any distributions of profits they carry out in excess of their after tax earnings account (40.85% in 2013, and 38.89% in 2014). In these cases, the tax on distributions are creditable by the legal entity making the excess distribution. Dividends distributed to individual or foreign residents will be subject to a 10% withholding, when distributed on earnings generated from 2014 and thereafter. Dividend taxes may be lower or nil, under the terms of the tax treaties in place with many countries (see Chapter 25 for details). International aspects Foreign operations As stated above, both individual and corporate residents of Mexico are subject to Mexican taxation on their worldwide income. Tax credit up to the amount of the Mexican income tax is allowed for foreign income taxes paid on foreign-source income, and the law is designed to avoid double taxation of international transactions. Mexico has a number of tax treaties in effect and is currently negotiating additional tax treaties with several other countries (see Chapter 25 for details).

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