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Latin American Countries - A Higher Indirect Tax Rate

Michael Mundaca

Based in Washington, DC, Michael Mundaca serves as Ernst & Young’s (EY) co-leader of its National Tax Department and of Americas Tax Center. He previously served as the assistant secretary for tax policy at the U.S. Treasury Department. Michael Mundaca engages with clients on complex issues spanning both U.S. and international tax matters.

A recent report by the EY Americas Tax Center focused on strategies for managing Latin American indirect taxes. This is an important issue, as Latin American countries derive a significantly higher proportion tax revenue through indirect taxes than do most Organisation for Economic Cooperation and Development (OECD) member countries.

Reasons for this have to do with generally fewer exemptions and, in some cases, a cascading tax. As indirect tax systems in Latin America are far from uniform (unlike in the EU), it makes sense to consult with a globally experienced tax professional when doing business in Latin America.

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