Final considerations when preparing the annual tax return WMTA - March 18, 2009 ©2009 Deloitte LLP. All rights reserved.

Income Tax ©2009 Deloitte LLP. All rights reserved.

Exchange differences Intercompany accounts receivable are generating exchange gains Exchange gains are not part of the profit when computing the taxable income based on a Transfer Pricing study thus increasing the income tax liability.  Alternatively the possibility of paying a dividend to cancel the account receivable must be evaluated.

©2009 Deloitte LLP. All rights reserved. Exchange differences/ thin capitalization By Law exchange differences are deemed as interests. There is a limitation to deduct interests provided that liabilities do not exceed the 3/1 ratio of debt/equity. Companies with large intercompany account payable will report exchange losses and subject to this limitation.  An option to explore is to consider the possibility of capitalizing part of the intercompany debt.

©2009 Deloitte LLP. All rights reserved. Profit sharing as part of the operating expenses Taxable Income is computed upon the total operating expenses according to the Mexican GAAP. Now NIF (Normas de Interpretación Financiera) are in force no longer GAAP. NIFs have no definition of operating expenses, therefore not clear that the Employee´s profit sharing is part of the operating expenses to compute the mark up for tax purposes.  Our understanding is that the EPS is not an operating expense; although the minimum effect in the tax reconciliation will have no major exposure if reported as operating expense.

Value Added Tax ©2009 Deloitte LLP. All rights reserved.

Import / export reporting  Import of intangible goods  Export of intangible goods  Use of services in National Territory or abroad.

Flat Tax ©2009 Deloitte LLP. All rights reserved.

Identify remmitances of money to capital investments  To pay operating expenses  For capital expenditures

©2009 Deloitte LLP. All rights reserved. Value of income and expenses Keep control over the expenses in foreign currency to claim as a deduction the total expenditure and not the booked expense

©2009 Deloitte LLP. All rights reserved.