Doing Business

Doing Business in Mexico 2015

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221 Doing Business in Mexico 2015 Also based on a presidential decree, the school tuition paid may also be deducted in the annual tax return, subject to certain limits. In order to claim the deductions related to medical expenses, school tuition and transportation, the disbursement should be made through the following payment mechanisms: wire transfer from the taxpayer's bank account, credit / debit card or cheque issued by the taxpayer. The total personal deductions amounts for the year is limited, therefore it may not exceed the lesser of the following: • Amount equivalent to 4 times the annual minimum wage that corresponds to the geographical area of the taxpayer • Amount equivalent to 10% of the taxpayer´s gross income, including exempt income. The Contributions to personal retirement accounts, charitable contributions and school tuition are not considered for the limit indicated above regarding personal deductions. Credits Foreign Tax Credit An individual may claim a foreign tax credit in the annual tax return, subject to certain limitations, for any foreign income tax paid on foreign-source taxable income. IX

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