Mexico feuds with P&G, others over taxes

Mexico’s government is withholding hundreds of millions in tax refunds owed to Procter & Gamble, Unilever and Colgate, in a bid to get the companies to pay more income tax locally, Reuters reports.

Mexicon has won foreign investment by major corporations with tax breaks, but as oil prices sag its looking to bolster its tax revenues, emboldened by the Organisation for Economic Co-Operation and Development, which is cracking down on profit-shifting to low-tax countries.

Mexico’s tax authority SAT held back more than $384 million in value-added tax (VAT) from the three companies and is probing 270 others for possible tax avoidance after President Enrique Pena Nieto took office in late 2012, the news service reported, citing “people familiar with tax negotiations.”

Unilever reached a deal last year to pay more income tax in Mexico, while Procter & Gamble and Colgate have not reached deals, sources told Reuters.

P&G, Colgate and Unilever declined to comment on VAT refunds and income tax matters in Mexico.