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Bye bye, no more Cash Deposit Tax (IDE) in Mexico

January 1st, 2014

One of the new tax laws in Mexico for 2014 is the elimination of the infamous cash deposit tax (LIDE or IDE - which stands for Ley del Impuesto a Depósitos en Efectivo) which was 3% to any excess of funds over $1,200 USD deposited across any of your/our bank accounts within the same bank.

If you deposited in cash, $1,500 USD, the first $1,200 USD would be free but the remaining $300 USD would be taxed with the IDE tax, talking about any individual/personal accounts.

Starting 2014, your deposits won't get taxed anymore. The IDE tax was established in July 2008 as a way to collect taxes from all the "informal" businesses/people who didn't pay taxes to the Mexican IRS (Hacienda) If you consider that only around 50% of the total population of Mexico pays taxes, this seemed to be a good measure.

Also the IETU tax (Business Tax) has been eliminated and many other changes have been implemented for 2014. Please consult your accountant for further details on this.

This IDE & IETU elimination doesn't come for "free". On the other hand the VAT (value added tax) or in Spanish: IVA which stands for Impuesto al Valor Agregado, has been raised from 11% to 16% which is one of the main changes.

So, one of the key parts here is: you can now make deposits in your Mexican bank accounts not worrying about being charged every month with the 3% IDE tax (cash deposit tax), though the Mexican IRS (Hacienda) will still monitor bank accounts they said.

 
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