TOWARDS A NEW ECONOMIC BILL Héctor Silva Meeting - Breakfast September 16, 2009.

Presentación del tema: "TOWARDS A NEW ECONOMIC BILL Héctor Silva Meeting - Breakfast September 16, 2009."— Transcripción de la presentación:

1 TOWARDS A NEW ECONOMIC BILL Héctor Silva Meeting - Breakfast September 16, 2009

2 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. 2010 PROPOSED ECONOMIC BILL General Economic Politic Criteria Disbursement Budget Income Law Sundry modifications for various tax laws -New tax to fight poverty - Income tax law - Cash deposit tax law - Excise tax - Federal tax code 2

3 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. MACRO-ECONOMICS ITEM GDP Inflation CETES rate Exchange Rate (Dlls.) Oil (Dlls./Barrel) 2009 -6.8% 4.3% 5.4% 13.6 51.0 2010 3% 5.3% 4.5% 13.8 53.9 3

4 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. OBJECTIVE OF THE REFORM - Strength tax collection -Improve fight against tax evasion -Simplify the tax system -Improve Taxpayers legal certainty 4

5 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. INCOME LAW Interest rate 0.75% Interest for late payment of taxes 1.5% per month Tax incentives F5

6 INCOME TAX LAW

7 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. For individuals Tariff increases up to 30% (7.2% from 5 minimum wages) For corporations Change of rate from 28% to 30% Maximum rate returns to 28% in 2014 (29% in 2013) INCOME TAX LAW 7

8 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. INCOME TAX LAW Tax for groups (tax consolidation). Any deferral will have to be paid in the fifth year (60%). The remaining 40% in four years. Applicable since 2004. Elimination of tax credit for research and development. Donations received (for approved entities) are taxed if receiving revenues for sales and services are in excess of 10%. Interests to individuals from the financial sector. No other changes affects the maquila operations (TP; SH, Fox credit, etc.) 8

9 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. BUSINESS FLAT TAX (IETU)

10 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. IETU No changes in the Law Changes made in the Income Law - No offset of IETU loss against income tax - New report (full disclosure on monthly and annual calculations. 10

11 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. CASH DEPOSIT TAX

12 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. IETU Increase of rate from 2% to 3% Decrease of exemption from Ps$20,000 to Ps$15, 000 12

13 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. NEW TAX TO FIGHT POVERTY

14 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. NEW TAX TO FIGHT POVERTY Object, any of the following within: - Alienations - Services - Rent - Import Tax rate: 2% (0% for export) 14

15 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. NEW TAX TO FIGHT POVERTY Similar to VAT On cash basis No credit if the payment is not made on time Minimal exemptions; consequently taxes - Sale of houses - Book, newspaper, magazines - Food - Medicine - School - Interests, etc. 15

16 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. EXICE TAX

17 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. EXICE TAX Increase on: - Alcoholic beverages - Beer (from 25% to 28%) - New on telecommunications (4%) - Tobacco (from 0.80 up to 1.60 in 2012) - Games and lottery (from 20% to 30%) 17

18 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. FEDERAL TAX CODE

19 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. FEDERAL TAX CODE The definition of tax domicile includes the domicile of the legal representative. Changing of tax domicile would require demonstration of the change of Administration. Jointly responsibility to the stockholders when tax credits cannot be warranted by the taxpayer. Tax receipts can be digitalized. 19

20 ©2009 Galaz, Yamazaki, Ruiz Urquiza, S.C. Todos los derechos reservados. Héctor Silva hsilva@deloittemx.com +52 (664) 622 7840