Annual Review – Global Tax 2016

Q COULD YOU OUTLINE SOME OF THE KEY DEVELOPMENTS AND CHANGES RELATING TO TAX LAWS THAT YOU HAVE SEEN IN MEXICO OVER THE LAST 12-18 MONTHS?

BARRERA: For the last four years, the Mexican government has passed a number of strategic reforms designed to make the economic environment in Mexico more appealing and competitive for foreign and domestic investors. An increase in investments would naturally result in higher tax revenues. However, these reforms have not brought the expected results. The pace of economic growth is slower than the government had expected. Therefore, the government was compelled to backpedal on some of the previous reforms. They amended the Income Tax Law to include some tax incentives, particularly for energy and infrastructure investments, such as accelerated depreciation, release of thin capitalisation rules and granting a tax credit on reinvestment of dividends as well as a repatriation capital plan for Mexicans holding investments abroad. The