Mexico’s President submitted to Congress tax reform for 2016 on 8 September 2015 was approved by the Lower Chamber with certain adjustments, on 29 October 2015. As per the tax reform proposal which is expected to be signed by the President to publish in the Official Gazette, Interest-accruing debts incurred in constructing, operating or maintaining production infrastructure linked to strategic areas in Mexico will not subject to the thin capitalization rules. Once published, the Reform will be effective from 1 January 2016.
The tax reform proposal was approved to introduce and maintain Master file and Local file as per the BEPS action plan 13.The tax reform proposal was also approved by the Lower Chamber to introduce Country by Country (CbC) reporting requirement. Under the tax reform proposal non-compliance rules would be imposed penalties in a range of MXN 140,540 (USD 8,365) to MXN 200,090 (USD 11,910) and in addition, a failure to file or presenting incomplete or erroneous reports would be penalized by disqualifying the taxpayer from entering into contracts with the Mexican public sector.
