Mexican Tax Reforms May Affect US Investors

The Mexican government is currently considering a number of tax changes that may affect investors in the United States. Under current law, Mexican companies with US ownership pay income taxes at a rate of 17.5%. If the proposed changes pass, this rate will increase to 30%. Some depreciation deductions are also likely to be affected.

The proposed changes will also affect US shareholders who receive dividends from Mexican companies. Under the proposed rules, Mexican companies will pay an additional 10 percent dividend tax when they distribute dividends to nonresident shareholders. As a result of these potential changes, Mexican companies may be more likely to distribute dividends before the end of the year.

© 2013 Parsonage Vandenack Williams LLC

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