The 2017 Mexican tax reform

By José Carreras Benitez, INTEGROUP, Tax, Legal & Audit

In October 2016, Congress approved some modifications to the tax regime applicable to the 2017 tax year. Most of these reforms entered into force on 1 January 2017. The government is attempting to curtail tax evasion while also offering some tax benefits.

Some of them are described as follows:

Labour subcontracting (outsourcing)

For income tax purposes, payments derived from outsourcing services can generally be deductible when, the contractor obtains from the subcontractor: (a) copies of the tax receipts for salary payments made to the employees performing the outsourced services and (b) a copy of the tax return showing that the income tax withholding and contributions to the Mexican Social Security Institute were paid.

Value Added Tax (VAT) paid for subcontracted labour will generally be creditable as long as the contractor obtains, from the subcontractor (a) a copy of the VAT tax return showing VAT was remitted to the Mexican tax authorities and (b) a copy of the acknowledgment of receipt issued by the tax authorities from the subcontractor.

Tax credit for R&D

The Income Tax Law allows a 30% tax credit for research and development expenses, including investments. It will be applicable against income tax under certain rules. The Mexican government will set up a committee to analyse and approve R&D credits. Furthermore, taxpayers will have to file an information return each February with details of the R&D expenses to be validated by the authorities.

José Carreras Benitez

José Carreras Benitez

INTEGROUP, Tax, Legal & Audit, Guadalajara, Jalisco, Mexico
T: +52 33 36 15 78 15
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INTEGROUP is a full service firm offering specialised services in tax, legal, audit and internal control. It has a group of experts with extensive experience who offer a personalised, ethical and highly professional service in order to provide effective and rapid responses to client requirements.

José Carreras Benitez is the Tax Partner in charge of dealing with international businesses. Since 2000, he has gained experience in providing VAT consultancy and win-win ideas. José is fluent in both Spanish and English.

Published: Spring 2017 l Photo: diegograndi -

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