(Last updated: 29 July 2012)
Taxation
A slew of tax reform has come into effect in recent years. Aspects of these benefit foreign firms, some of which have cited a heavy burden as an obstacle to investment in the past. Most Mexicans taxes are applied at the federal rather than the state level.
A new corporate flat rate tax of 16.5 per cent was introduced in 2008, with rises planned for future years. Companies are required to choose between the graduated and flat rate systems, paying whichever gives the highest amount of tax. Resident firms are taxed on global income. Non-resident firms pay tax on Mexican sources-income only. There is also an asset tax, charged according to the net value of assets of Mexican companies and some non-resident firms.
VAT standard rate is 15 per cent. A lower of 10 per cent applies to supplies by residents of a frontier are if they take place in that area. Exports are zero-rated, as are food, books and newspapers, fertilisers and medicines.
Exempt from VAT are construction of residential dwellings, some financial and insurance services and teaching and medical services.
Top Business Risks
OECD Guidelines for Multinational Enterprises
Multinational Enterprises should be aware of the OECD Guidelines for Multinational Enterprises that provide voluntary principles and standards for responsible business behaviour in a variety of areas, consistent with applicable domestic laws. These Guidelines are endorsed and promoted by the Australian Government. For more information, go to the AusNCP website.
APEC Business Travel Card Scheme
Managed by the Department of Immigration, the APEC Business Travel Card Scheme was developed to make travelling within the 21 APEC member countries much simpler and more efficient.