How Mexico has implemented the BEPS Action Plan

By José Carreras Benitez, Integroup S.C.

The Mexican economy is and has consistently been growing as a result of the rapid expansion of the middle class due to education and the maturing of Mexico as an economic powerhouse. Companies from Europe and the USA are investing billions of dollars into the Mexican economy. Mexican government knows that global businesses are coming and the Base Erosion and Profit Shifting (BEPS) Action Plan suggestions have been implemented in order to protect the tax system as well as giving same protection to the Mexican partners of the Organisation for Economic Co-operation and Development (OECD). Below is a brief description of one of them:

ACTION 4. Limit base erosion via interest deductions and other financial payments

The Mexican Income Tax Law limits the deduction for technical assistance, interest or royalty payments (including those related to machinery and equipment leases), when paid to a foreign entity that controls or is controlled by a Mexican entity, and (a) when and to the extent that the recipient is a transparent entity whose owner or owners are not subject to tax in its jurisdiction, (b) the recipient country of tax residence considers the payment to be disregarded, or (c) the recipient does not include the payment as part of its taxable income under its jurisdiction’s rules.

It is important to mention that Mexican tax authorities are also reviewing what others can be implemented and how the aforementioned could be

C.P. José Carreras Benitez, Tax Partner
Integroup S.C., Guadalajara, Jalisco, Mexico
T: +52 33 36 15 78 15
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INTEGROUP is an integral 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 is the Tax Partner in charge of dealing with international businesses. Since the year 2000, he has gained experience in offering value added tax opinions and win-to-win ideas. José is fluent in both Spanish and English.


published: April 2015

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