On July 1, 2008, the Cash Deposits Tax (Impuesto a los Depósitos in Efectivo or IDE) entered into force, as a result of being approved last year as part of the fiscalreform package proposed by President Felipe Calderon. The IDE imposes a tax of 2% on cash deposits made during each month by individuals and entities if the total deposits during such monthly period exceed 25,000 pesos, with the understanding that the tax will be imposed on all bank accounts held by taxpayers in other banking institutions. The IDE will be consolidated by banking institutions at the end of each month on a designated cutoff day in order to make corresponding calculations, and, within a term of 12-15 working days, report such to the Mexican Department of Finance and Public Credit (Hacienda or SHCP). The IDE will tax only those deposits made in cash, so that deposits made by electronic transfers, account transfers and checks will not be included. It is hoped that the IDE will bring into Mexico’s tax system those businesses that handle high volumes of cash, such as restaurants, self-service stores and services provided to the general public. It is expected that soon after enactment of the IDE, a number of taxpayers will present formal protests to the next tax.
