Rodolfo López has commented on the “MiBolsillo” website the conditions to be met by taxpayers so that their voluntary contributions can be used as a tax deduction tool.
1. Background
The Mexican pension system allows voluntary contributions periodically to the retirement fund. Thus, the final amount the taxpayer will receive as a retirement pension fund improves on his/her own account.
It should be noted that such contributions have multiple benefits for the taxpayer. For example, in the case of voluntary contributions, the amount spent may be tax-deductible before the Tax Administration Service (Servicio de Administración Tributaria), even in some cases, generating a credit balance for the contributor.
2. Applicable conditions
According to López Millan’s article, the conditions to deduct taxes for voluntary contributions are as follows:
- The resources must be used at the end of the taxpayer’s working life, i. e., when the taxpayer retires or if he/she is entitled to a pension for permanent disability.
- The maximum deductible amount for this concept will be up to 10% of the income accumulated during the fiscal year by the taxpayer.
- To be deductible, the contribution may not exceed the equivalent of five times minimum wage.
3. Penalties for non-compliance
Finally, the commentary also compiles the tax penalties for non-compliance with the stipulated conditions. These are;
The money from the voluntary contributions cannot be withdrawn until the worker’s working life ends. If the money were withdrawn before, up to 20% of the amount in question may be withheld.
Source: MiBolsillo 21/03/22