{"id":3576,"date":"2024-09-25T12:32:09","date_gmt":"2024-09-25T18:32:09","guid":{"rendered":"https:\/\/q1dapyf5zv.onrocket.site\/?p=3576"},"modified":"2024-09-25T12:32:13","modified_gmt":"2024-09-25T18:32:13","slug":"how-to-calculate-income-tax-isr-in-the-general-law-regime-title-ii","status":"publish","type":"post","link":"https:\/\/taxid.mx\/english\/how-to-calculate-income-tax-isr-in-the-general-law-regime-title-ii\/","title":{"rendered":"How to Calculate Income Tax (ISR) in the General Law Regime (Title II)"},"content":{"rendered":"<p>It is important to understand the calculation of ISR even if we are not accountants, as professionals or entrepreneurs need to understand the logic to avoid problems with the SAT (Tax Administration Service).<\/p>\n\n\n\n<p>Article 9 of the Income Tax Law (LISR) tells us how companies (legal entities) must calculate the Income Tax (ISR) under the General Law Regime.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How is ISR Calculated?<\/h3>\n\n\n\n<p>ISR for legal entities is calculated by applying a rate of 30% on the taxable result for the year. This taxable result is obtained as follows:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">1. Calculate Taxable Income:<\/h4>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Subtract authorized deductions (expenses you can deduct) and the employees&#039; participation in company profits (PTU) paid during the year from accumulated income.<\/li>\n<\/ol>\n\n\n\n<h4 class=\"wp-block-heading\">2. Apply Pending Tax Losses:<\/h4>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>If your company has tax losses from previous years that have not been used, subtract them from the taxable income.<\/li>\n<\/ol>\n\n\n\n<h4 class=\"wp-block-heading\">3. Calculate the Tax:<\/h4>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Apply the 30% rate to the taxable result to determine how much ISR you owe.<\/li>\n<\/ol>\n\n\n\n<h4 class=\"wp-block-heading\">4. Provisional Payments:<\/h4>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>During the year, your company must make provisional ISR payments each month. These are advance payments of the annual tax and are calculated based on the income and deductions of each period. At the end of the year, these payments are subtracted from the annual ISR and help reduce what you have to pay in the annual declaration.<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Practical Case<\/h3>\n\n\n\n<p>Let&#039;s suppose your company has the following data at the end of the year:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Accumulated income: $5,000,000<\/li>\n\n\n\n<li>Authorized deductions: $3,200,000<\/li>\n\n\n\n<li>PTU paid: $100,000<\/li>\n\n\n\n<li>Tax losses from previous years: $400,000<\/li>\n\n\n\n<li>Provisional payments made during the year: $200,000<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Step 1: Calculate Taxable Income<\/h4>\n\n\n\n<p>First, subtract the deductions and PTU from the income:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Taxable Income = $5,000,000 \u2013 $3,200,000 \u2013 $100,000 = $1,700,000<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Step 2: Subtract Tax Losses<\/h4>\n\n\n\n<p>If you have losses from previous years, subtract them from the income determined in Step 1:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Taxable Result = $1,700,000 \u2013 $400,000 = $1,300,000<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Step 3: Calculate the ISR for the Year<\/h4>\n\n\n\n<p>Apply the 30% rate to obtain the ISR:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ISR = $1,300,000 \u00d7 0.30 = $390,000<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Step 4: Subtract Provisional Payments<\/h4>\n\n\n\n<p>Finally, subtract the provisional payments made during the year:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ISR to Pay = $390,000 \u2013 $200,000 = $190,000<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p>In the end, your company has to pay $190,000 of ISR in the annual declaration after applying the provisional payments. Provisional payments and the provision for ISR are essential to avoid surprises at the end of the year, as the Profit Coefficient may not reflect a profit aligned with the reality of the current year.<\/p>\n<span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>It is important to understand the calculation of ISR even if we are not accountants, as professionals or entrepreneurs need to understand the logic to avoid problems with the SAT (Tax Administration Service). Article 9 of the Income Tax Law (LISR) tells us how companies (legal entities) must calculate the Income Tax (ISR) under the [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":2928,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_joinchat":[],"footnotes":""},"categories":[114],"tags":[340,339,337,338],"class_list":["post-3576","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-english","tag-calculate-income-tax-mexico","tag-corporate-tax-30-mexico","tag-corporate-tax-mexico","tag-income-tax-mexico"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Calculate Income Tax (ISR) in the General Law Regime (Title II) - TAX ID<\/title>\n<meta name=\"description\" content=\"Learn how to calculate the Income Tax in Mexico. 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