The isr to individuals for dividends, interest and prizes in mexico, 2006

Individuals who earn income from the following concepts, among others, must submit an annual return:

• By providing professional services (for a fee) by leasing of real estate for business activities (commercial, industrial, agricultural, livestock, forestry, fishing and road transport), except those taxed in the regime of small Contribuyentes.Por disposal of assets For the acquisition of goods For wages in the following cases:
  • When they also obtain other accumulative income other than salaries When they stop providing services before December 31, or when they have provided services to two or more employers simultaneously When they obtain income from salaries of people not obliged to make withholdings, (international organizations and foreign states or embassies) When they obtain annual income from salaries and / or concepts similar to salaries that exceed $ 300,000.00 When they have communicated in writing to the employer that they will present an annual declaration on their own.
  For interests in the following cases:
  • Those who only obtained income from real interest exceeding $ 100,000.00 in the year Those who, in addition to interest, obtain income from other concepts for which they are obliged to file an annual return, (professional services, real estate leasing, among others) regardless of the amount of each one or the sum of the same.Those who receive interest and salaries, and the sum of both exceeds $ 300,000.00, regardless of the amount for each of said concepts.Those who receive interest and salaries, and the sum of both is of up to $ 300,000.00, but the interest amount is greater than $ 100,000.00.

• Those that receive other income, for example: debts forgiven by the creditor or paid by another person, for investments abroad, for default interest, and / or for conventional penalties, etc.

You must also inform in the declaration, if applicable; the income received in the year for the concepts and amounts mentioned below, even when the corresponding tax (s) has already been paid.

• Income from: loans, awards and donations, which individually or as a whole exceed $ 1'000,000.00 Income exempt from the payment of income tax for inheritances or bequests and for alienation of a house, if the sum of the Total income, contained in your return, is greater than $ 500,000.00.

In the annual declaration, the income that has been received for the concepts and in the amounts mentioned below must be reported, regardless of whether the tax (s) has already been previously paid (s) corresponding (s).

The concepts and amounts are as follows:

• Income from: loans, awards and donations, which individually or as a whole exceed $ 1'000,000.00 Income exempt from payment of Income Tax for inheritance or legacies and for alienation of a house, must be noted provided that the sum of the total income, contained in your return, is greater than $ 500,000.00.

* Note: These people will be able to file the declaration using tax form 13 if they are taxed, provided that during the year they have not made payments online through the electronic programs of authorized banks.

WHO ARE THE OBLIGATED SUBJECTS?

The individuals must accumulate their other income, received by dividends or distributed profits multiplied by 1.4925 crediting of income tax paid by the company which distributed the ever dividend treated as taxable income, the amount of income tax paid by that company and also count with the corresponding proof (Form 37-A).

Individuals who receive dividends from shares that are placed among the general investing public, may consider the statement of account issued by financial intermediaries as proof to prove the income tax paid by the company that distributed the dividends or profits.

"Article 6.-...

In the case of income from dividends or profits distributed by companies resident abroad to legal entities resident in Mexico, the income tax paid by said companies may also be credited in the proportional amount that corresponds to the dividend or profit received by the resident in Mexico.. Whoever makes the accreditation referred to in this paragraph shall consider as accrual income, in addition to the dividend or profit received, the amount of income tax paid by the company, corresponding to the dividend or profit received by the resident in Mexico. The accreditation referred to in this paragraph will only proceed when the legal entity resident in Mexico is the owner of at least ten percent of the capital stock of the company resident abroad,at least during the six months prior to the date on which the dividend or profit in question is paid. … ”

What obligations do legal entities that make dividend or profit payments to individuals or legal entities have?

• Make payments with a non-negotiable nominative check of the taxpayer issued in the name of the shareholder or through the transfer of funds regulated by the Bank of Mexico to the account of said shareholder. Provide the persons to whom they make dividend payments, proof in which their amount is indicated, as well as if they come from the accounts established in articles 88 and 100 of the LISR, as the case may be, or if they are dividends or profits referred to in the first paragraph of article 11 of the aforementioned Law. This certificate will be delivered when the dividend or profit is paid. Present no later than February 15 of each year, before the SAT, the information on the name, address and RFC, of ​​each of the people to whom they were made. dividend payments,as well as the amount paid in the immediately preceding calendar year.

Legal basis: Article 86, section XIV of the LISR.

What concepts are considered to be assimilated to dividends or distributed profits?

Dividend income is considered to be the interest and profit shares paid in favor of bondholders or others; loans to partners or shareholders, except those established in section II of article 165 of the LISR; non-deductible expenses in accordance with the LISR and that benefit the shareholders of legal entities; omissions of income or purchases not made and improperly recorded; the allegedly determined profit and the modification to the tax profit between related parties.

Legal basis: Article 165 of the LISR.

What are the loans made to partners or shareholders that are not considered dividends or profits?

Those who meet the following requirements:

a) That they are a normal consequence of the operations of the legal entity.

b) That a term of less than one year is agreed.

c) That the agreed interest is equal to or higher than the rate established by the Federal Income Law for the extension of tax credits.

d) That these agreed conditions are effectively met

Legal basis: Article 165 section II of the LISR.