|Ricardo González Orta
A capital repatriation decree has been published in Mexico's
federal Official Gazette, offering a tax amnesty relating to
deposits or investments repatriated to Mexico by June 19 2017.
The decree became effective on January 19 2017.
The decree on capital repatriation will remain in force for
six months following the effective date of the decree. It
applies to Mexican resident entities and individuals, as well
as non-residents with a permanent establishment in Mexico, that
have earned income from previously unreported direct and
indirect offshore investments held abroad until December 31
2016. The decree offers qualifying taxpayers an opportunity to
repatriate the investments, pay a specified tax, and meet their
tax obligations in Mexico for the fiscal year in which the
payment is made and for the previous fiscal years in which the
investment was held, provided certain specified requirements
The tax will be calculated by applying an 8% rate, with no
offsetting deductions, to the total amount of the direct or
indirect investments repatriated to Mexico that were held
abroad before January 1 2017. The applicable exchange rate in
cases involving holdings in a foreign currency will be
determined by the rate of the day on which the 8% tax is
Foreign tax paid on the income from investments held abroad
before January 1 2017 may be credited against the 8% tax paid
on the repatriation of those investments, but the credit is
limited to the amount of the 8% tax.
The 8% tax (as reduced by any foreign tax credit) must be
paid within 15 days following the date on which the investments
are repatriated to Mexico.
The decree does not apply to income derived from illegal
activities or to income that has resulted in a deduction, for
income tax purpose, to a Mexican resident or a non-resident
with a permanent establishment in Mexico.
Only income and investments repatriated to Mexico during the
six months following January 19 2017 that are invested in
Mexico during 2017 and remain invested in Mexico for at least
two years from the date on which they are repatriated are
eligible. The two-year requirement will be deemed to be met if
a taxpayer has invested in the following: the acquisition of
fixed assets, the acquisition of land or buildings used for
domestic business activities, research and development, payment
of liabilities with third parties before the capital
repatriation decree became effective, or in Mexico through a
bank or brokerage house formed under Mexican law.
The Mexican tax authorities may issue rules for implementing
Ricardo González Orta (email@example.com)
and Eduardo Barrón (firstname.lastname@example.org),