Overview of the 2020 Mexican tax reform

Feb 17, 2020
Business tax Global tax reporting International tax

Originally published in October 2019, this content has been updated to reflect the passage of the 2020 Tax Reform Act.

Initiated in September 2019, Mexico’s office of the presidency released a proposed bill containing a 2020 tax reform package (2020 Act). On Dec. 12, 2019, the Mexican Congress approved the 2020 Act which includes a number of changes to Mexican tax laws that are focused primarily on revamping Mexico’s international tax regime and combating tax evasion.

Changes in the 2020 Act include:

  • Adherence to the OECD’s base erosion and profit shifting (BEPS) action plan to define the concept of “permanent establishment”
  • Adherence to the OECD’s BEPS action plan to address international anti-deferral and anti-abuse principles
  • Changes in the shelter maquiladora tax regime
  • A clear set of rules to tax electronic commerce
  • Tax arrangement reportable measures
  • Stricter consequences for pervasive tax evasion activity

Many of the provisions in the 2020 Act are effective beginning Jan. 1, 2020. If you are an organization with operations in Mexico, understanding the impact of these changes and what you should do proactively now are important to ensure you remain in compliance. The following white paper provides an overview of several key ítems, who may be effected and steps to take now.