The Sculpin - 10-1-2007 at 03:07 PM
As some of you may know, the 2008 Mexican tax bill was recently approved by the Congress (the Mexican one). The most significant reform is the
introduction of the new flat tax (Impuesto Empresarial a Tasa Unica or IETU) which will be effective January 1, 2008, and will replace the asset tax.
The new flat tax rate is 17.5% (16.5 in 2008 and 17% in 2009). The new flat tax taxable basis will generally equal gross revenue based on cash
collected less certain deductions based on cash payments. Interest, royalties between related parties and non-taxable wages are not deductible for the
purposes of this new flat tax. There are certain credits that may be applied against the new flat tax to determine the tax payable; some of these
credits are described in the transitory provisions.
Since this is purely a business tax, how many of you are affected by this chnage in the law? Is it better, or worse, or the same? Are different
industries affected differently?
Just curious.........
...
or 
jerry - 10-1-2007 at 06:30 PM
with all the strictly cash businesses in mexico i cant see where it will make much differences for them??
bajajudy - 10-1-2007 at 06:38 PM
I havent discussed this with our accountant. more later
Cypress - 10-1-2007 at 06:47 PM
My last flat taxed me, but can't remember the rate.
Accepted full credit for the
flat after attempting to blame it on slick tires.
Osprey - 10-1-2007 at 06:49 PM
Jerry, sometimes you really confuse me. I mean Really confuse me. My head hurts. Do you mean like the strictly cash businesses like money exchanges
you see all over? Are you just trying to show me the way by saying the new tax law will probably effect businesses that trade onions for alternators?
Give us the benefit of your insight in depth -- don't leave us just twisting in the wind.
jerry - 10-1-2007 at 07:27 PM
oh so i gave you a headacke my day is made you pompaus burro
Cap - 10-2-2007 at 07:40 AM
Cash business transactions will likely not be affected due to most folks lack of interest in reporting them to the gov't. But the flat taxation of
reported income, and corporate income, will change things for the better, and likely spur economic development, and entice foreign investment in
Mexico.
Flat tax is sweeping developing nations world wide with great success!
There is the obvious advantage of not penalizing people and businesses for working harder, with a higher tax rate, and the less obvious advantage of
having folks feel equally invested in their government regardless of their income, because everyone pays the same. The very simple and fair
application of the tax code eliminates the lawyers and most accountants (good thing).
China and India are contemplating a flat tax and if they implement it, look out. The US will go the way of old Europe and stagnate (comparatively)
under the antiquated, and burdensome tax load we carry. If Mexico does properly institute a flat tax (big if) I hope we can learn something from our
southerly brothers.
Viva Mexico!