Doing Business

Doing Business in Mexico 2015

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220 Tax and Legal Services - PwC Mexico Appendix IX Personal allowances As noted in Chapter 20, resident taxpayers may claim certain deductions to reduce the taxable income. Expenses The following expenses are deductible as long as they are supported by the corresponding electronic invoices: • Medical expenses disbursed in Mexico, for the portion which has not been reimbursed by a medical insurance. These include medical, dental and hospital bills for the taxpayer, spouse or common-law spouse, descendants, parents, or grandparents, as long as the annual income earned by the family member does not exceed one annual minimum wage. Medical insurance premiums are also deductible. Medicines are not deductible, unless included in a hospital bill. • Funeral expenses up to an amount not exceeding one annual minimum wage, applicable to the family members indicated above. • Charitable contributions to tax exempt organizations that are authorized to receive donations. The deductible amount should not exceed 7% of the taxpayer's previous year taxable income. • The paid mortgage inflation adjusted interest, related to the purchase of the taxpayer personal residence, subject to certain limits. • Complementary contributions to social security retirement fund (AFORE) or Mexican personal retirement account. This deduction is capped at 10% of individual's taxable income and the contributions must not exceed five times the annual minimum wage of the taxpayer's geographical area. • School transportation for economic dependents, when it is mandatory by the institution. IX

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