The South Korean tech giant could close ALL of its operations in the country if it loses the largest tax dispute in Mexican business history. Thomas Yun, president of Samsung Mexico, faces a critical decision: pay more than 300 billion pesos or move the company to Colombia, Brazil, or Costa Rica, according to La Razón.
The dispute began with the IMMEX temporary import program that Samsung has used for decades. The SAT now requires VAT to be collected twice: when inputs enter the country AND when finished products are sold. Justice Yasmín Esquivel legally demonstrated that this constitutes illegal double taxation that violates the constitutional principle of tax legality.
An epic battle is brewing in the Supreme Court. Minister Lenia Batres defends the SAT, alleging tax evasion of 250 billion pesos annually, while Esquivel warns that it is an unconstitutional double charge.
The new plenary session of ministers, criticized for its closeness to the Executive Branch and, in general, the ruling party, will decide Samsung’s fate.
The disputed figure is equivalent to SIX YEARS of Samsung’s profits in Mexico. With 9% compound interest, fines, and surcharges, the amount already exceeds 300 billion pesos. Lee Jae-yong, global CEO based in Seoul, has already made the decision: if they lose, they’re out.
The case would not only affect Samsung. Thousands of US companies in the automotive and aeronautical sectors use the same IMMEX scheme. If Samsung fails, they would all face the same tax fate.
The possible exit would put thousands of jobs at risk in Querétaro, Tijuana, and Tlalnepantla (State of Mexico), where the Asian giant operates.
Source: razon.com.mx
