Doing Business

Doing Business in Mexico 2015

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193 Doing Business in Mexico 2015 Chapter 22 Value-Added Tax (VAT) Investor considerations • VAT is levied on transfers of goods and services at a standard rate of 16% and at zero rate for some transactions. • Certain other transactions are exempt. • Imported goods and services are subject to VAT. • Charges for the use of assets (e.g., rentals and royalties) are subject to VAT. • Credit against VAT liability (which may result in overpayment and refund) may be taken for VAT paid on all imports and purchases, except as noted. • Credit for VAT paid may not be taken in proportion to revenues that are exempt from VAT or for VAT paid in goods and services that do not represent deductible expenses under the income tax law. • With the exception of purchases made by foreign tourists, there is no mechanism to recover the VAT paid by non-residents. 23

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