Mexico: Decree on capital repatriation

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Mexico: Decree on capital repatriation

Sponsored by

Sponsored_Firms_deloitte.png
Decree on capital repatriation

The Mexican tax authorities may issue rules for implementing the decree.

gonzalez-orta.jpg
barron.jpg

Ricardo González Orta

Eduardo Barrón

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 are fulfilled.

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 paid.

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 the decree.

Ricardo González Orta (rgonzalezorta@deloittemx.com) and Eduardo Barrón (edbarron@deloittemx.com), Mexico City

Deloitte Mexico

Website: www.deloitte.com/mx

more across site & shared bottom lb ros

More from across our site

AI is rapidly finding its way into tax advisory services. But how can AI be deployed responsibly, reliably, and in compliance with legal standards?
Specified taxpayers will have to apply a 19% VAT rate on services offered by third parties through their platforms; in other news, Donald Trump imposed 30% South African tariffs
A ‘quiet revolution’ in HMRC’s compliance strategy has caused Adam Craggs to rethink how to advise clients, he tells ITR
If the Reform leader becomes UK prime minister then he may follow the direction of the US in at least one significant way
Trump declared a new national emergency in issuing the order; in other news, Grant Thornton Germany is up for sale and the subject of interest from both its UK and US counterparts
The judgment, which saw Denmark's Supreme Court rely on OECD TP guidance, sets aside more than 15 years of consistent administrative practice, experts have told ITR
Belgium’s new coalition government has gone ahead with a new exit tax regime that could land it in the courts
Brazil’s government has not officially framed the bill as a countermeasure amid trade tensions with the US, but the move is being considered as part of Brazil’s strategic response, one expert tells ITR
Understanding India’s income tax landscape can help charities ensure compliance, optimise tax benefits, and enhance their impact, writes Raghav Bajaj of Khaitan & Co
Tax advisers in Brazil are rising above the country’s notoriously complex tax system to deliver high-quality advisory services, ITR’s exclusive in-house data reveals
Gift this article