Dear clients and friends,

On August 25, an initiative was published in the Federal Parliamentary Gazette proposing to amend section I) subsection b) of Article 2-A of the Value Added Tax Law (“LIVA”), which would have the effect of reducing the cost of all medicines.

The objective of this initiative is to expand the catalog of products and services subject to the 0% tax rate from the value added tax (“VAT”), as currently only patented medicines are included.

If this reform is approved, in addition to its social impact, it would allow companies engaged in the production and distribution of medicines to generate significant VAT balances in their favor.

This initiative is still under legislative discussion, so we will be closely following the approval process. For any questions or advice regarding this matter, our team of experts is available at the following email addresses:

Paul Kavanagh: paul@k-g.com.mx

Luis Kanchi: Lkanchi@k-g.com.mx

Miguel Alonso: malonso@k-g.com.mx