Rob Wagner

On July 2, 2010, Mexico President Felipe Calderón granted administrative benefits for tax simplification.

Using international best practices, the goal is to reduce costs, simplify regulations and procedures, improve the quality and transparency of government services and better compete in the global market.  The tax simplification measures to be implemented involve several changes, including:

• Simplifying Value Added Tax reporting on annual returns, provided third-party transaction information is filed
• Providing taxpayers the option to file information directly with the tax authority, rather than having financial statement audits prepared for Federal Fiscal Code and Social Security Law, for audit reports corresponding to 2010 and beyond; taxpayers should evaluate the benefits of the new option based on individual circumstances
• Eliminating the need to audit favorable balance of cash deposits tax, formerly necessary to request a refund
• Increasing the effective period of advanced electronic signatures for individuals to four years

These measures take effect the day after publication in the Federal Official Gazette, with the exception of the favorable cash deposit tax audits, which takes effect September 1, 2010.  The most significant change is the provision that makes previously mandatory fiscal audits for taxpayers with sales exceeding certain thresholds optional.  It is possible a large number of companies may no longer obtain audited financial statements.

Contact your BKD advisor if you would like further information or assistance with the tax changes in Mexico.