Corporate - Significant developments

Last reviewed - 08 July 2020

The majority of the Double Tax Treaties (DTTs) entered into by Mexico are covered by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) (the MLI), except for certain exceptions, such as Indonesia, which has not marked the tax convention with Mexico as covered under the MLI, and the United States (US), which decided not to join the MLI. The precise date the conventions covered by the MLI will be effective for Mexican tax purposes is yet unknown, as the Mexican Congress must conclude the approval process of the MLI.

On 30 October 2019, the Mexican Congress approved the amendments to the Tax Laws for Fiscal Year 2020, which final text was published in the Mexican official gazette on 9 December 2019, including various amendments to the following laws: the Income Tax Law, the Value Added Tax (VAT) Law, the Excise Tax Law (IEPS), the Federal Rights Law, and the Federal Fiscal Code (together, 'the 2020 Tax Reform'). Most of the 2020 Tax Reform introduced changes will enter into effect as of 1 January 2020; however, there are certain provisions for which a later period of application was granted (e.g. reportable schemes, digital tax).

In general terms, the 2020 Tax Reform is meant to incorporate fundamentals of the Organisation for Economic Co-operation and Development (OECD) BEPS initiative. The economic context in which the 2020 Tax Reform was legislated assumes gross domestic product (GDP) growth of between 1.5% and 2.5%, and an increase in tax collection without the creation of new taxes.