“We see with good eyes that the operation is being carried out and that the recommendations are being carried out, I just need to review the tax payment part,” said the president.
Tax and Law specialists explain the scenarios that can occur with the sale of the commercial bank, considering the Mexican legal-fiscal framework, since until the sale is made it will be known how this operation will proceed.
Preparations for the sale of Banamex
First, the sale will have to be prepared, and this would imply an internal corporate restructuring of Banamex and its subsidiaries (bank, brokerage firm, Afore, sofomes, among others), this would have its fiscal impact (payment of taxes), since it would lead to the sale of shares, fixed and intangible assets, personnel transfers; constitution of new companies, among other procedures, explained Juan Ignacio Rivero, coordinator of Fiscal Commissions of the College of Public Accountants of Mexico (CCPM).
Given these changes, Citigroup will have a package ready to sell, “it will not be a simple operation”, so it can be defined if the sale will be to a single buyer through the shares of one or more companies, fixed assets, intangibles, or a mixture, adds the specialist.
“Clearly a sale of this magnitude must leave a profit and taxes must be paid on that profit,” Rivero commented.
Although it is not listed on the Mexican Stock Exchange (BMV), Citigroup can complete a sale through an initial share offering, where the “new financial group” focused on the consumer and retail banking business goes public and offers itself publicly, detailed the coordinator of Fiscal Commissions of the CCPM.
The specialists consulted estimated that the sale would be made by shares. In this context, the Income Tax Law establishes that this tax must be paid by the seller. Not like it happened in 2001, when Citigroup bought Banamex and there was an exemption for the payment of this tax for the sale of shares in the Income Tax Law, explained the consultant specializing in tax matters, Carlos Cárdenas.
Stock sale scenarios
In the event that the sale of shares occurs, there are different scenarios.
When a foreign company located in the United States sells the shares of a Mexican issuer, the law says that the issuer causes 35% ISR on the total value of the operation. But there is an exception, if conditions are met such as having a legal representative in Mexico, a reviewer, among others, the ISR, which is 35%, can be caused only on the profit, Cárdenas explained.
If the person selling the shares is in another country considered a tax haven, 35% of the total operation is directly applied there, added Cárdenas.
In previous days it was announced that Grupo México would be the only contender to buy the bank and that it would be offering 7,000 million dollars for part of the bank.
The rest would be put up for sale in an Initial Public Offering but would take about two more years.
