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ISR* rate, on the downturn

Along with the change in government there also comes a degree of uncertainty Mexico experiences, as far as the diverse amendments every field of law may undergo. 

In fiscal matters, we have many expectations that spring from the knowledge that said amendments are the basis for the State obtaining the revenues it requires. However, before going any further with a mere analysis of expectations, it is important to remember that provisions that were vacatio legis** are about to enter into force and take legal effect. One of these being a reduction in the rate of income tax from 30% to 29% for 2013, and down to a rate of 28% in 2014 (Article Second, Section II, subparagraph a) of the 2010 transitional provisions of the LISR***). 

The drop in rate opens a range of opportunities for companies if they take the necessary steps for proper planning; this is also an opportunity for individuals to make the most of the benefits offered by Article 218 of the LISR to invest and defer income tax in order to pay same at a later date and at a lower rate.  

All this, if our legislature does not amend said provision in the interest of achieving a greater (tax revenue) collection in order to meet the commitments acquired by the new government, which would mean the end of this benefit before it even began. As such, we must keep an eye open so that appropriate measures are set in place. 



* ISR = Impuesto Sobre la Renta or Income Tax

** Vacatio legis = refers to the period between the promulgation of a law or statute and the time it takes legal effect

*** LISR = Ley del Impuesto Sobre la Renta, or Income Tax Law

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