1. 2011 Income Law for Congress’ discussion Héctor Silva WMTA Breakfast Meeting October 20, 2010

2. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Economic indicators 20112010 GDP3.8%4.5% Inflation3.0%5.0% Cetes 28 días5.0% Oil63.0 Dls. Deficit budgeted42.2 Bill 2

3. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. 2011 Tax reform bill No sustantive changes No new taxes No tax rate changes Tax simplification Less tax regulations Reduction of some fees 3

4. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Estimated gross revenues 2010-2011 (billions of Mexican Pesos) 2010 2011 Income Law Last estimate Total2,908.82,935.53,022.8 Pemex950.1974.0993.3 Not from oil1,958.71,961.42,029.5 -Taxes1,373.31,362.11,461.4 -No tax related125.1 78.5 -Government entities – no Pemex 460.3474.2489.6 4

5. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Revenues from oil are estimated 4.5% higher than 2010 Income Law. Mainly from domestic price increases. 5 2011 tax bill

6. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Increase in tax collection of 7.3% is etimated in increases of income tax, Flat tax, IETU tax and VAT Expected GDP is 3.6%. Additional tax collection due to 2009 tax changes (tax consolidation and increase of penalties incorporated in the Law in 2007-2009 6 2011 tax bill

7. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Income Law Interest rate 0.75% Interest rate for late payment of taxes 1.13% 4.9% Tax withholding on interests paid to foreign registered banks. 7

8. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Income Law As in 2008, the opportunity to update and pay any differences prior to June 30, 2010 is available for employers when paying in one lump sum with no interest nor penalties provided that: Differences are paid in one payment A letter electing for this benefit is filed with the Social Security Institute. Specify date of payment Tax warranty 8

9. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. 2011 Income Law Interest and penalties waiver: 9 Jan, 1 – Mar, 31 Apr, 1 – May, 31 Jun, 1 – Jun, 30 100% 80% 50% 100% 90% Paid in 2011 InterestsPenalties

10. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. 2011 Income Law Interest withholding to individuals approved in 2010 to become effective in 2011 is extended to 2012. 10

11. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. 2011 Income Law Informative annual IETU tax return must be filed by March of each year. 2010 annual return must be filed in January 2011 as stated in the Decree 11

12. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. 2011 Income Law IETU tax loss can not be credited against income tax (same as changed last year). Can only be carried forward against IETU tax in the following ten years. 12

13. ©2010 Galaz, Yamazaki, Ruiz Urquiza, S.C. Héctor Silva 011 52 664 622 7840 hsilva@deloittemx.com