December 9, 2019
Mexican tax reform for 2020 enacted
Mexico enacted the final economic package (the Reform) through publication in the Official Gazette on 9 December 2019. President Lopez Obrador signed the Reform on 6 December 2019. Most of the Reform will be effective 1 January 2020, with exceptions for the digital services rules and certain rules on fiscally transparent entities, which have their own effective dates. For more information on the tax reform, see EY Global Tax Alert, Mexican Congress passes tax reform for 2020, dated 5 November 2019.
The Reform has significant tax provisions that may affect multinationals operating in Mexico. Most of the changes are aimed at strengthening compliance with the existing tax structure and challenging base erosion and profit shifting (BEPS). Businesses should take a close look at financing structures and cross-border transactions with Mexican affiliates to avoid surprising results in the form of non-deductible payments or additional compliance obligations.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United States), Latin American Business Center, Chicago
Ernst & Young LLP (United States), Latin American Business Center, Miami
Ernst & Young, LLP (United States), Latin America Business Center, San Diego
Ernst & Young LLP (United States), Latin America Business Center, Houston
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific