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August 4, 2021

Mexico publishes second list of expected effective income tax rates for additional industries

Mexican tax authorities published another list of expected effective tax rates for large taxpayers engaged in various economic activities or industries during tax years 2016 through 2019. Large taxpayers participating in those activities or industries should consider comparing their effective tax rate with the expected tax rate on the list.

On 1 August 2021, Mexican tax authorities (SAT) released on their webpage a list of the expected effective tax rates for 84 economic activities/industries. The list, which follows a list released on 13 June 2021, for other economic activities or industries, includes rates for transportation services, engineering and construction, food and beverage services, hoteling, mining, and retail and wholesale, among others.

As previously communicated in EY Global Tax Alert, Mexico’s Tax Authorities publish list of expected effective income tax rates for large taxpayers, dated 21 June 2021, the SAT expects large taxpayers to compute their effective tax rate by dividing the income tax liability on their tax return for the year by the corresponding gross taxable income for that year. If the resulting rate is lower than the SAT’s expected rate, the SAT may assert that the transfer pricing is incorrect. It could also review other items. As such, taxpayers should be prepared to support their deductions and transfer pricing, among other items, upon review.


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 American Business Center, San Diego

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


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