Each day of our “new normal” brings a fresh set of challenges. As such, it’s normal to experience some heightened anxiety — especially when it comes to business operations. Fortunately, there are new opportunities to manage liquidity for your Mexican operation that might ease some of those worries.
Speculation has circulated as to whether the Mexican government will grant tax incentives or other options to ease the impact of COVID-19. As of now, little to nothing has been offered that provides benefits to the Mexican subsidiaries of foreign companies.
One positive development has been a message from the executive branch of the Mexican government related to value-added tax (VAT) refunds. The Mexican tax authorities have been instructed to process VAT refunds as quickly and efficiently as possible to assist with cash flows. As such, we recommend that companies review their current VAT receivable balances: If an offset or other option to utilize these assets doesn’t appear likely in the near future, it may be appropriate to request a refund of the balance.
We know liquidity is extremely important in the current environment. Our global services team has been successful in obtaining significant VAT refunds for several of our clients. Please contact us if you have questions regarding VAT refunds or other concerns related to your Mexican operations.
