Doing Business

Doing Business in Mexico 2015

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151 Doing Business in Mexico 2015 c. Entities and individuals with income of up to an amount equivalent to 423 times the general minimum wage for the geographic area of the taxpayer, calculated for the year, will have the aforementioned exemptions, as well as a reduction of tax on the excess, i.e., 40% for individuals and 30% for entities, that is to say, they will apply the effective tax rate of 21%. d. Individuals and entities with income exceeding an amount equivalent to 423 times the general minimum wage for the geographic area of the taxpayer, calculated for the year, apply the above-mentioned exemption and the tax deduction and must determine and pay tax at the rate of 30% or at the rate applicable for calculating tax payable by individuals. Insurance companies The various types of insurance and bonding companies are allowed to deduct certain asset valuation and technical reserves, established on the basis of the instructions or with the approval of the National Insurance and Bonding Commission. Holding companies Dividends received by Mexican companies that own the shares in other Mexican companies are not includable in taxable income. However, such dividend income is subject to obligatory profit sharing (see "Profit sharing" in Chapter 10), which would therefore be duplicated in respect of dividends received from an operating company if the holding company has employees of its own. 15

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