Doing Business

Doing Business in Mexico 2015

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192 Tax and Legal Services - PwC Mexico Estate and gift taxes As noted in Chapter 20, no estate or inheritance taxes are levied by the federal government or local governments on the value of assets at date of death. During the period before an estate is finally distributed, the legal representative is required to pay income tax for the account of the heirs on the earnings of the estate considered as a unit. The tax paid in this way is considered final unless the heirs or beneficiaries of legacies elect to include their portion of the income in their own annual returns, in which case they may take credit for a proportionate amount of the tax paid by the legal representative. Moreover, transfers of property at death are not taxable for income tax purposes as concerns the transferor and Mexican resident transferees; although there may be real estate acquisition transfer tax considerations (usually ranging 1% to 5% of the value of transferred property). There is no separate gift tax per se other than the possible real estate acquisition tax mentioned above, although an income tax may apply for the transfer of property to persons other than spouses, lineal descendants and lineal ascendants, and in certain cases withholding taxes apply.

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