By Alexandra Alper / Reuters
Mexico’s government withheld hundreds of millions of dollars in tax refunds owed to Procter & Gamble, Unilever, and Colgate combined as it sought to coax them and other multinationals to pay more income tax locally, according to people close to the talks.
After luring foreign companies with corporate tax breaks for years, Mexico moved to boost its tax take as oil output has slumped.
Mexico’s tax authority held back more than $384 million in value-added tax (VAT) from the three companies while it was probing them and nearly 270 others for possible tax avoidance after President Enrique Pena Nieto took office in late 2012, people familiar with tax negotiations say.
Unilever reached a deal last year to pay more income tax in Mexico, three people familiar with the negotiations said. One said the firm has since received about $131 million in VAT it was owed. Procter & Gamble and Colgate have not reached deals, sources say.