Cemex 2012 Annual Report Download - page 152
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Notes to the
financial
statements
152
< previous I contents I next >
Pursuant to amendments to the Mexican income tax law effective January 1, 2005, Mexican companies with investments in
foreign entities whose income tax liability is less than 75% of the income tax that would be payable in Mexico, are required to
pay taxes in Mexico on net passive income, such as dividends, royalties, interest, capital gains and rental fees obtained by such
entities, provided, however, that those revenues are not derived from entrepreneurial activities in such countries. CEMEX S.A.B.
de C.V. challenged the constitutionality of the amendments before the Mexican federal courts. In September 2008, the Supreme
Court of Justice ruled the amendments were constitutional for tax years 2005 to 2007. On March 1, 2012 and July 5, 2012,
CEMEX S.A.B. de C.V. self-assessed the taxes corresponding to the 2005 and 2006 tax years, respectively, for a total amount,
inclusive of surcharges and carry-forward charges, of approximately $4,642 (US$358) for 2005 and $1,100 (US$86) for 2006,
of which 20%, equivalent to approximately $928 (US$72) for 2005 and $221 (US$17) for 2006, was paid in connection with
the submission of amended tax returns. The remaining 80% of such total amounts would have been due in February 2013 and
July 2013 for the 2005 and 2006 tax years, respectively, plus additional interest if CEMEX S.A.B. de C.V. would have elected
to extend the payment date in thirty-six monthly installments. On January 31, 2013 in connection with the transitory amnesty
provision described below, CEMEX S.A.B. de C.V. reached a settlement agreement with the tax authorities (note 16). Changes in
the provision were recognized through income tax expense for the period.
16) Subsequent events
In connection with the tax proceeding related to the taxes payable in Mexico from passive income generated by foreign investments
for the years 2005 and 2006 and the transitory amnesty provision both of which are described in note 15, on January 31, 2013,
CEMEX, S.A.B. de C.V. was notified that an agreement had been reached with the Mexican tax authorities regarding the settlement
of such tax proceeding pursuant to a final payment according to the rules of the transitory provision. CEMEX, S.A.B. de C.V. paid
the amount on February 1, 2013.