The new regulations to the Income Tax Law were published in the Official Gazette on 8 October 2015. The main changes included in the regulations are summarized below:

Corporate taxation:

– Informative returns must be filed for donations exceeding MXN100, 000.

– Specific rules are issued regarding the obligation to inform the tax authorities of loans granted or capital contributions made in cash over MXN600, 000.

– Donations made to public human rights institutions will be tax deductible, provided that specific requirements are met.

– For inflation adjustment purposes, specific rules are issued regarding the tax treatment of rights to use immovable property.

– For purposes of the thin capitalization rules the regulations refer to the Foreign Investment Law to define the strategic areas to which such rules will not apply.

– Thin capitalization rules for the electrical energy sector, that will operate by excluding debts incurred in connection with the investment in infrastructure related to power generation, with application retroactively from 2014.

– For corporate restructuring purposes, if shares are issued by a foreign entity and the acquirer and seller are Mexican residents, the regulations establish that the transfer may be conducted at cost basis value, provided that certain conditions are met.

– Rules are issued for the treatment of cash deposits made to financial institutions and for the treatment of cash payments exceeding MXN100,000.

– New informative returns have to be filed by financial institutions on interest paid and on gains or losses realized on the sale of shares.

– Specific rules are introduced in the maquiladora industry regarding the effects of the immediate depreciation of fixed assets in force under previous laws.

– Regulations are introduced establishing the mechanism to compute taxable income for taxpayers whose core business is currency trading.

– For treaty application, foreign residents may prove their tax residence through residence certificates or documentation issued by the corresponding authority, proving that the tax return has been filed.

– For nonresidents, specific requirements are introduced to apply the tax treaty exemption on the sale of shares through recognized stock exchange markets.

– For permanent establishments, specific regulations are included on the applicable treatment of CURECA (Reimbursement Capital Account) and regarding the effect of accelerated depreciation of fixed assets in force under previous laws.

– Regarding tax incentives, rules are included in the application of risk capital investments.