Doing Business

Doing Business in Mexico 2015

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125 Doing Business in Mexico 2015 Penalties Penalty interest, inflation adjustments and fines for delayed or omitted tax payments are the same as those described for corporate taxpayers. Tax audits and appeals procedures Individual tax returns are subject to the same type of audit and appeals procedures as those described for corporations. Community property When an individual is married under the Mexican community property rules, income derived from capital investments is considered to belong to both spouses in the proportion established by the terms of their marriage contract. On the other hand, the income tax law provides that remuneration for personal services or profits from a business enterprise is reportable exclusively by the person who renders the services or carries out the business activities. Foreign personnel Foreign nationals residing in Mexico are subject to the same compliance requirements as Mexican nationals residing in Mexico. Non-residents, including Mexican citizens who have terminated tax residency, are taxed only on their Mexican-source income. Exit permits Before the final departure of a tax resident, an appropriate notification must be filed in order to have the authorities suspend the individual's registration and obligations for tax purposes and notify the authorities of the termination of the individual's status as a tax resident. No formal tax clearance has been established as a condition for boarding or exiting for departing citizens or foreigners. Partnerships and joint ventures Tax administration for Mexican partnerships and joint ventures is the same as for corporations, as described above. An association in participation agreement (Asociación en Participación–A. en P.–a type of joint venture) exists, but the activities carried out through this instrument do not create a separate legal entity. However, A. en P.s are subject to the same tax treatment as regular companies and the active partner must pay the tax and comply with the A. en P.'s tax obligations. 14

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