Business · Companies · 1 hr ago

Mexico auto dealers seek tax decree, warn 1,000 agencies could close

Mexico auto dealers seek tax decree, warn 1,000 agencies could close

Mexico’s auto dealers association says a tax change puts 1,000 dealerships and 70,000 jobs at risk.

The Mexican Association of Automotive Distributors has asked President Claudia Sheinbaum to issue a decree recognizing the industry’s business model.

The change limits deductible expenses to 96.6% and increases advance income-tax payments.

Dealers say their pre-tax profit margins are usually only 1% to 3%, so they could owe tax on income they did not actually earn.

The association says the rule could push dealerships to close, adding pressure to an industry already affected by tariffs and weaker vehicle production and exports.

A weaker dealer network could also undermine plans to produce more vehicles in Mexico for local buyers.

The association is seeking action from the president, but no response or next step is stated.

1 source

Related

What people are saying

Guillermo Rosales ZárateAMDA executive president
We believe there is an alternative for the Executive to recognize activities like ours, with low income margins and not because of abuse, but as part of the business model, allowing us to soften the impact of this amendment to the Income Tax Law
via El Economista MX
The Executive should consider in depth not creating an impact that leads to the closure of businesses like ours, which do not use a tax abuse scheme
via El Economista MX