As from January 1, 2002, the Mexican Congress established that the end customer/user has to pay a 5% tax on certain (a) sales of goods, (b) services rendering, (c) leasing of mobile goods, and (d) import of goods, specifically considered as luxury goods and services as described by such law.
Some of the luxury goods are: (a) caviar, salmon, perfumes, (b) cars above $250,000 MexCy., leather clothes (except shoes), computers worth $25,000 MexCy., (c) jewelry and ornaments above $10,000 MexCy., and (d) 25” TV, flat panel monitors, PDAs, videocams, DVD players and audio/video systems above $5,000 MexCy.
This luxury tax on the products mentioned above (except for the cars) will not be applicable in the state of Baja California or in a strip of territory of 20 kilometers wide along the frontiers.
Some of the luxury services are: (a) all type of quotes to clubs that allow the user to practice golf, equestrianism, polo, car races and water sport races, (b) membership quotes for restricted access restaurants, bars or clubs, (c) services on restaurants selling drinks and bars.
Some of the leases taxed are for: (a) airships (except fumigators), (b) motorbikes with 350 cm2 cylinder capacity, motor waterski and water bikes, (c) $250,000 MexCy. cars, and (d) 25” TV, flat panel monitors, PDAs, videocams, DVD players and audio/video systems above $5,000 MexCy.
The seller or provider of such luxury goods or services has to withhold this 5% tax to, thereafter, deliver it to SHCP on a monthly basis.
This tax has been criticized by many economic sectors. As a result of the inconformity, such economic sectors have challenged the constitutionality of this tax by filing for the amparo, a constitutional writ, allowing that only those to whom the supreme court grant it, will not have to withhold this 5%. At this moment, there is not a clear path on the resolution that the supreme court will take.
Special Tax on Production and Services (STPS)
Anyone who carries out the following activities is subject to the STPS:
Alienation within the Mexican Territory or the importation to Mexico of the following goods and the rendering of the following services, among others: (i) certain alcoholic beverages; (ii) tobacco, cigarettes and cigars; (iii) fuel and natural gas; and (iv) sweeteners others than sugar, soft drinks, sodas, etc. (this last one in effect as of September 30, 2002 in accordance with the Presidential Decree published on March 5, 2002).
Taxpayers will be subject to a graduated withholding tax up to 110%, depending on the type of good or service.
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