It was reported on 19 December 2012 that the first Federal Revenue Decree issued by the Mexican government to cover its operations in 2013 includes, in particular, a delay to the proposed cut in corporate income tax.

The Decree, which was published in the Official Gazette on December 17, and will go into effect on January 1, 2013, follows the lines laid down by the Secretary of Finance and Public Credit, in his remarks to the Mexican House of Representatives.

The President had already announced that there would be a national consultation in 2013 on comprehensive tax reform, which is expected to target a rise in the government’s revenue-to-gross domestic product ratio by some 2% or 3% from its relatively low present level, reduce the dependence on oil revenues, and provide funds to develop the country’s social security system.

While the current 30% corporate income tax rate was due to be reduced to 29% on January 1, 2013, this has now been delayed by one year to January 1, 2014, while an exemption from permanent establishment rules for certain non-residents in Mexico has also been extended to December 31.

In addition, the withholding tax on interest paid to banks resident in countries with which Mexico has an operational tax treaty remains at 4.9%, and there is no change in the provisions regarding overseas pensions, the flat tax, and tax incentives.

Finally, the law includes an amnesty program for taxes payable until end-2012. For the years between 2007 and 2012 inclusive, there will be a full exemption from penalties and interest if 100% of the tax liability is paid.