TAX REGIME 2023

EQUITY

Market Profits

·        Local Individual Stocks

·        Foreign Individual Stocks

·        Equity Indexes

·        Physical Delivery or Cash Settlement

·        Exchange Rate

·         Commodities

Residents in Mexico

Rate and Modality Applied

Individuals

Taxed at 10% without Withholding (Art 129 LISR)

·         Local Individual Stocks

·         Foreign Individual Stocks

·         Equity Indexes

·         Physical Delivery or Cash Settlement

For Exchange Rate and Commodities:

Rated at general tariff, always

cumulative, without Withholding

(Art 146 LISR),

Cumulative; taxed according to each investor’s income bracket, no withholding (LISR^a Art. 142 Section XIV and 146).

Physical delivery; deemed a disposition or acquisition of the underlying asset. (LISR^a Art. 20 Section II)

Corporations

Always cumulative, without Withholding (Arts. 20 and 54 LISR)

Cumulative, no withholding (LISR^a Art. 16  and 20)

Foreigners

Rate and Modality Applied

Individuals and Corporations

Residents in countries that have signed a treaty, that deliver a written document with fiscal registration are exempt, for the rest a 10% Withholding on profits.

(Arts. 161 and 163 ITL)

No withholding; there is no income source in Mx.

(LISR^a Art. 163)

DEBT

Market Profits

·         Rates

·         Government Debt Securities

·         Physical Delivery or Cash Settlement

·         US treasury bills

·         US treasury notes

·         Libor, Euroyens

·         Barclays Capital US Aggregate Bond Index

·         CBOT 30-Day Federal Fund

Eurozone HICP

Residents in Mexico

Rate and Modality Applied

Individuals

Withholding of 25% on the monthly net gain in transactions with the same institution. (Art 146 and Rule 3.10.25. RMF 2023)

Always cumulative

If the settlement is done with the delivery of the title, the person who receives it must retain 0.15% on capital, unless it is an exempt title. (Art.21 LIF 2023)

Interest cumulative and deductible, 25% withholding on monthly net gains (taxed portfolio) in transactions with the same institution. (LISR^a Art. 146, and Rule 3.10.25 RM^F 2023)

Corporations

Always cumulative, without Withholding (Arts. 20 and 54 LISR)

Cumulative, no withholding (LISR^a Art. 20 and 54)

Foreigners

Rate and Modality Applied

Individuals and Corporations

 Exempt. (Art. 163 LISR)

Physical delivery, 10% withholding; cash settlement, 21% or 35% withholding on net gains. LISR^a Art. 163 subsection X, 166 subsection VIII, and Rule 3.18.16 of the 2023 RM^b, or such rate as may have been established via treaty so as to avoid double taxation (e.g. 15% USA).

Note:

(1)   This table is for informational purposes only, so the institution does not assume any liability for any omissions or interpretations of the Law. Neither does it imply any recommendation to buy or sell instruments. Any person or legal entity, resident in the country or abroad, should consult with their tax advisor for the proper interpretation of the contents of the Income Tax Law or the  Treaties to avoid double taxation that apply to their particular operations or the fulfillment of  their obligations.

(2)   Countries that have a double taxation agreement with Mexico that can benefit with no withholding tax.

(3)   Rule .3.18.17 RMF^b, DOF^c 2020

Financial transactions in derivatives referenced in Art. 16-A of the CFF^d (Federal Tax Code), executed in recognized markets and transacted via MexDer’s Electronic Trading System, will not be subject to withholding on account of partial payments made to those with foreign residency into margin accounts on account of market adjustments resulting from fluctuations in the prices of assets quoted on recognized markets with the following requirements:

1.            The transactions must be executed through global accounts in which a single foreign counterparty maintains two or more operations.

2.            The financial transactions in derivatives must be individually identified.

3.            In no case are the transactions deemed deductible when determining gains or losses.

Margin accounts must maintain sufficient funds for withholding purposes at the transaction’s maturity or close.

^a LISR = Ley del Impuesto sobre la Renta = Income Tax Law

^b RM or RMF = resolución miscelánea fiscal = omnibus tax bill amending, adding to or

repealing existing tax law provisions

^c CFF = Código Fiscal de la Federación = Federal Tax Code

^d DOF = Diario Oficial de la Federación  = Federal Official Gazette