Doing Business

Doing Business in Mexico 2015

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200 Tax and Legal Services - PwC Mexico State and municipal taxes Taxes levied by states and cities in Mexico are much lower than the federal levies, and in most cases are also lower than those of comparable entities in the United States and other countries. Municipal taxes are usually of minor importance. The states and municipalities may not tax transactions subject to Federal VAT, of which they receive a substantial share from the federal government. Other activities, such as banking, may also not be taxed at the local level. Brief general comments regarding state taxes are given below. Property taxes Annual taxes on real property are levied by the Federal District and all the states at widely varying rates applied to values shown in the property tax records, which in some cases are based on rental income from land and buildings held for rent to third parties. Assessed values have been increased substantially recently in the Federal District and some other areas. Title transfer taxes As stated above, the transfer of real estate is almost without exception subject to a variable transfer tax at rates averaging 3% to 4%. The tax is levied by most states and the Federal District. Taxes on earned income Some Mexican states levy a relatively low tax on salaries and other income earned by employees, which in most cases is payable by the employer (e.g., Mexico City imposes a 3% payroll tax payable by the employer). Tax opinion for Federal District taxes In the case of Mexico City and other States, a special purpose statutory tax opinion on the status of state taxes issued by an independent public accountant is required by the local authorities.

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