Issue 148-July-Aug 2020

July 28, 2020

Reductions in Estimated Income Tax Payments in Mexico

By Miriam Name and Esteban Gómez Aguado

The COVID-19 pandemic is causing a steep drop in revenues for Mexican companies during fiscal year 2020, which will also result in decreased net income and, in many cases, negative cash balances. Mexican companies will need to keep a close eye on their cash flow and analyze strategies and options to improve their cash balances. One strategy that should be considered involves a reduction of estimated income tax payments, paid on a monthly basis to cover the total annual income tax incurred. The estimated income tax payments for 2020 are being calculated based on an amount of net income that is potentially too high, compared to the likely net income that will actually be received this fiscal year. Article 14 … read more