Only 6 states of Mexico collect taxes on profits from individuals.
The VAT Law considers a tax of between 2% and 5% on this perception.
Here we tell you if in your entity you must pay this tax on your profits.
All states have the power to collect taxes on the profits of individuals, but only six do.
Article 43 of the Law on Value Added Tax (VAT) establishes that the States may establish scheduled taxes in the following cases:
On the income obtained by individuals who receive income from the provision of professional services.
For granting the use or temporary enjoyment of real estate.
By alienation of real estate.
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Individuals who obtain income from the provision of professional services, the tax rate that may be established will be between 2% and 5%.
Individuals who obtain income from granting the temporary use or enjoyment of real estate, the tax rate that may be established will be between 2% and 5%.
Individuals who obtain income from the sale of real estate, the tax rate that may be established will be between 2% and 5%, and must be applied on the gain obtained from the sale of real estate located in the Federal Entity of which the try.
Individuals who obtain income from business activities, the tax rate that may be established will be between 2% and 5%.
That is, all states are empowered to charge between 2% and 5% for the provision of professional services, use and disposal of real estate, as well as for business activities, which includes your profits.
Which means that this tax would allow states to increase their revenues between 2% and 13% in tax collection.
Chihuahua, Guanajuato, Nayarit, Oaxaca, Quintana Roo, Yucatán and Guerrero are the only states that collect these taxes. But, Guerrero waived this tax for all of 2020.
In the context of the crisis caused by the Covid 19 pandemic, states should investigate ways to improve their collection as it is expected that next year states will receive 5.5% less in resources.
However, states are unlikely to risk losing votes by implementing the tax.
For example, Michoacán approved the charge in 2019, but due to media and political pressure, it repealed it that same year.
In 2021, positions in the Chamber of Deputies will be renewed and 500 legislators will be elected, 300 by relative majority and 200 by multi-member channel.
A new governor will also be elected in 15 states and 30 local congresses will be renewed.
If you live in Chihuahua, Guanajuato, Nayarit, Oaxaca, Quintana Roo, Yucatán you must pay VAT on your profits, for the rest of Mexico, this tax does not exist.