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Schedule I. — Commerce

13. This schedule includes taxpayers which habitually or occasionally perform acts of commerce (Law, Articles 6 to 13). To clarify this rule, the administration issued a circular which states that foreign enterprises not maintaining stocks of merchandise in Mexico but effecting, through agents or representatives in Mexico, sales of merchandise situated abroad to be delivered abroad to the purchaser are not subject to tax on income derived from such transactions. The representative or agent in Mexico, however, is taxable on his commission, brokerage or other remuneration under this schedule (Circular No. 14, of August 24th, 1925; JIMENEZ, page 158).

14. The tax is computed on the difference between the items of income received by the taxpayer and the expenses, deductions and allowances for amortisation or depreciation pertaining exclusively to the enterprise authorised by the Regulations.

15. Taxpayers engaged in commerce, deriving an income greater than 100,000 pesos, must present at the tax office of the jurisdiction in which they are domiciled or have their principal establishment in Mexico a final return within three months following the date on which they close their annual accounts. If the annual income is 100,000 pesos or less, they will submit biennial declarations during the month of January of even years (pares). The declaration must be accompanied by the following documents:

16. In the returns, the taxpayers will give assurance that the information contained in the summary corresponds exactly to the entries in their books of account and to the documents used in making up the books, and that they have taken exact note of all the stocks and that all the costs are calculated in accordance with the Regulations.

17. Companies must deliver to the local tax office, once only, a résumé of the data required by paragraphs I to VIII of Article 95 of the Commercial Code. Companies engaged in insurance, bonding or banking, and other companies with a share capital must present a copy of their general balance-sheet and a profit-and-loss statement, as of the close of the period included in the return.

18. Allowable Deductions. — To compute the taxable profit, Article 28 of the Regulations provides that, from the gross income of the period included in the declaration, the following amounts may be deducted:

The agents or representatives of foreign enterprises which are engaged exclusively in the purchase of goods for exportation must declare the total amount of their purchases. Similarly, the travelling salesmen, commission agents or employees of foreign companies must declare the total amount of sales made through them. For this purpose, they must keep a special book of orders in which will be noted in chronological order the operations made through them, a description of the merchandise sold, the sales price, the name and domicile of the purchaser and the number of the invoice, if any. They will keep their correspondence in accordance with the requirements of the Commercial Code.

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