On January 19, 2017, the country launched a six-month amnesty during which taxpayers can pay a low eight percent tax rate on previously undeclared income held overseas on December 31, 2016, provided those funds are reinvested in Mexico.
The preferential tax rate represents a significant reduction when compared with the 30 percent headline corporate tax rate and the top 35 percent individual income tax rate normally charged in Mexico.
The amnesty is only available if repatriated funds are used to acquire fixed assets, including land or buildings, used in the taxpayer’s income-generating activities, or for other approved investments. Repatriation has to be effected through Mexican banks or brokerage houses.
The repatriation incentive is not, however, applicable to the assets and income of taxpayers under audit or review by the Mexican tax authorities, or to income originated through illegal activities.