The Value Added Tax (VAT) is an end consumption tax; In general terms, the taxpayers are affected to this tax at the moment of payment effectively of each operation.

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The basic tax for companies in Mexico is Income Tax [in Spanish: el ISR]. In accordance with current Mexican legislation, Income Tax for legal entities is from 30% with a maximum progressive rate of 35% for individuals.

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The idea of an Employee Profit Sharing Plan (EPSP) [in Spanish: Participación de los Trabajadores en las Utilidades (PTU)] for Mexican companies uses article 123 of the Constitution as its legal basis, which is also the basis for the Mexican Federal Labor Law [in Spanish: la Ley Federal del Trabajo (LFT)].

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In compliance with the Law on Income Tax [in Spanish: la Ley del ISR], and under the terms of titles II and IV, prorated expenses made abroad will not be deductible for individuals who do not pay Income Tax.

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