Back in October 2013, the Mexican government published a few revisions to the IMMEX decree, including requiring participating companies to obtain a certification in order to qualify for certain tax and customs benefits. If your company received a Level “A” certification during 2014, it’s only valid from January 1, 2015, through December 31, 2015. You’ll need to renew the certification by filing a Notice of Renewal, 60 days prior to the certification’s expiration.
The Mexican authorities recently clarified that the 60-day window refers to 60 business days. This means your deadline to submit the Notice of Renewal on the government’s website (“VUCEM” for its acronym in Spanish) is September 25, 2015. The Notice of Renewal online portal is expected to be online soon. Companies failing to meet the renewal deadline will be required to submit a new IMMEX certification request, which will likely delay the process and lead to other unintended consequences.
Have an “AA” or “AAA” certification? Don’t worry—those don’t expire until December 31, 2016, and December 31, 2017, respectively. Therefore, no action is required at this time.
What if we told you that you could deduct 71 percent of your company’s income derived from qualifying intellectual property (IP)—that patents, inventions, formulas, processes, knowhow, computer software, and any other IP could qualify?
Thanks to the Innovation Promotion Act of 2015, that could soon be the case. Charles Boustany and Richard Neal, two members of the U.S. House Ways and Means Committee, have drafted a proposal whereby American businesses could benefit from a lower tax rate on income derived from qualified IP. Boustany and Neal have proposed creating an “innovation box,” similar to the “patent box tax” systems used in other countries, which will lower the tax rate for IP-related income.
Boustany and Neal are proposing for corporations to deduct 71% of their income derived from qualifying IP, which would translate into an effective tax rate of 10.15% on all innovation box profits. This is a big stride in the effort to keep and attract IP development in the United States.
The Act is still in the proposal and developmental phase, but the “innovation box” method of taxation would be a significant tax benefit to U.S. companies with profits from IP. And many companies would be incentivized to keep their research and development facilities and IP in the United States rather than overseas where this concept is already in effect.