MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
The Procedure The expropriation process begins with a pub - lic utility declaration, published in the Federal Official Gazette and, if applicable, a local news - paper. Property owners are notified and may present evidence and arguments before a judge issues a ruling. If approved, the Federal Execu - tive decrees the expropriation, publishing it again. The decree includes compensation, which must match the property’s commercial value and cannot be lower than its cadastral value. Own - ers can challenge the decision in court. Once decreed, authorities may occupy the property. The Expropriation Law allows for temporary occupation, total/partial expropriation, or limita - tions on ownership rights. National Law on Ownership Extinction The National Law on Ownership Extinction gov - erns the process of extinguishing property own - ership in favour of the state, either through the federal government or the states, as applicable. According to the law, property can be subject to ownership extinction if it is the product, instru - ment or material object of certain specified crimes. These crimes include: • offences under the Federal Law against Organised Crime; • kidnapping; • crimes involving hydrocarbons, oil and petro - chemicals; • crimes against health; • human trafficking; • corruption; • concealment; • crimes committed by public servants;
• offences outlined in the Federal Criminal Code relating to transactions involving resources of illicit origin. It is very important for the lease agreement to include specific clauses detailing the use and activities that may be carried out in the leased property. 2.10 Taxes Applicable to a Transaction If real estate is acquired through a direct pur - chase of assets, different taxes and fees must be paid, namely: • Property Acquisition Tax, which is paid by the purchaser and varies depending on the state where the property is located – it is usually between 2% and 6%; • VAT on the value of the construction (unless it is a residence or lot), paid by the purchaser at a 16% rate; and • income tax, paid by the seller and calculated on the net gains from the sale of the property. Certain deductions are available (ie, acquisition cost, construction, improvements and exten - sions, notary expenses and commissions). Finally, there are registration fees to be paid to the RPP and for obtaining certificates (no liens certificates, no tax debts certificate, etc). When the seller is an individual or foreign tax resident, taxes are withheld by the notary public who formalises the transaction. If a purchase is performed through share acqui - sition, income tax should apply.
• vehicle theft; • extortion; and
676 CHAMBERS.COM
Powered by FlippingBook