File No. 812.512/1947
The Ambassador in Mexico (
Fletcher) to
the Secretary of State
No. 952
Mexico,
April 24, 1918.
Sir: I have the honor to transmit herewith
a translation of a presidential decree issued April 13, 1918,
establishing a Federal tax of 10 per cent on payments made on
mortgages signed prior to April 15, 1913, provided such payments may
be demanded at common law at the date the decree is issued, or may
be subject to demand prior to December 31, 1919. This decree was
issued on the same day as the presidential decree raising the
moratorium on debts in general, referred to in Article 7 of the
enclosed decree as the “Law of Payments”.
I have [etc.]
[Enclosure—Translation]
Decree of April 13, 1918, establishing a
Federal tax on mortgage payments1
I, Venustiano Carranza, Constitutional President
of Mexico, to the people thereof make known:
That in use of the extraordinary powers in the Treasury with
which I am vested by the Congress of the Union, have seen fit to
decree the following:
-
Article 1. A Federal tax is
created on mortgage payments.
-
Art. 2. Mortgage credits which
come under the following conditions are subject to the
tax referred to in the preceding article:
- I.
- That the mortgage was created to guarantee the
payment of a financial obligation.
- II.
- That the contract was signed prior to April
15, 1913, and that payment; thereof may be
demanded under common law at the time this is
issued, or payment of which may be subject to
demand prior to December 31, 1919.
-
Art. 3. Mortgages created in
the same deed covering the sale of the mortgaged
property, are included in the provisions of the
preceding article.
-
Art. 4. The tax shall be
payable by the mortgage creditors, and shall become due
upon receipt by the creditor of payment of the debt
either in part or in whole, whether payment is made with
money or by means of the delivery of property, personal
or real; it being understood that the tax shall be made
applicable on amounts paid for account of the principal
and not on those made for account of interest.
-
Art. 5. With respect to
payments made to mortgage banks, in which are included
both principal and interest, the amount corresponding to
each shall be fixed in accordance with tables to be
issued by the Department of the Treasury, and the tax
made applicable to the portion corresponding to the
principal.
-
Art. 6. Mortgage credit
renewals shall be considered, for the purposes of this
law, as payment made, and shall be subject to taxation
on the total amount of the credit. The same shall apply
when an extension of time is granted by the creditor to
the debtor, for the payment of the principal on expired
mortgages, it being understood that once the tax has
been paid upon granting extension, the credit shall not
again be subject to taxation when payment thereof is
made.
-
Art. 7. The rate of taxation
shall be 10 per cent on payments made by the debtor of
partial liquidations, or on those payable by him under
the terms of the law of payments of this date; of this
amount, 1 per cent shall be for the municipality in
which the property is located, 1 per cent for the State,
Federal District, or Territory, and 8 per cent for the
Federation. The Department of the Treasury shall make
payment bimonthly to the local municipalities and
governments of the amounts corresponding to them for
this account.
-
Art. 8. The tax shall be
collected by means of ordinary documentary stamps
bearing the over-seal “Mortgages.”
-
Art. 9. The tax shall not be
made applicable to payments made for account of
mortgages in which the creditors are: Charitable
institutions; the Caja de Préstamos para Obras de
Irrigación y Fomento de la Agricultura, the Caja de
Ahorros y Préstamos de la Policía del Distrito Federal,
and other institutions depending from the Federal
Government, State governments, municipalities, and
official establishments of public instruction.
-
Art. 10. Notaries before whom
it is desired to draw up a public document covering the
total or partial payment of a mortgage guaranteeing a
loan of money, or covering the renewal of a mortgage
credit, or an extension granted by the creditor to the
debtor for the payment of the principal, shall, based on
the data given in the document or documents, make out a
special liquidation of the amount payable for account of
taxes under Articles 5, 6, 7, and 8 of this law, and
shall deliver to the parties interested a note showing
the liquidation, which shall be presented to the
corresponding stamp office.
- Furthermore, the party interested shall prove by means
of a written statement issued by the person in charge of
the stamp office, that he purchased there the necessary
stamps, and that the latter are to be used to cover the
tax to which this law refers on the mortgage credit
under consideration, and the notary shall make a record
in the public document covering the transaction, that he
has seen the said statement. The respective public
documents can not in any case be authorized until the
notary has satisfied himself that the liquidation has
been approved by the stamp office, that the stamps
required to cover the tax have been affixed to the note,
and that the requirement for the presentation or
insertion of the statement covering the purchase has
been complied with.
-
Art. 11. In cases where the
cancelation of the registration is to be effected by
virtue of a public document, those in charge of mortgage
matters may not do so until they are satisfied that the
notary has complied with the provisions of the preceding
article.
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Art. 12. Judges in the entire
Republic handling cases in which the cancelation should
be ordered of a mortgage registration covering credits
subject to the provisions of this law, may not issue a
decision in the matter until opportune advice has been
given to the stamp office and the necessary steps have
been taken for payment of the tax by the
creditor.
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Art. 13. After 11 days from
the date of payment of the mortgage credit, or upon
expiration of the term fixed by the judge for presenting
proof of payment by the creditor of the tax without the
said payment having been effected, the debtor may, in
order that cancelation may be made, pay to the stamp
office the amount corresponding to the tax, and in such
case the debtor shall have a claim on the creditor for
the amount of the payment for account of the tax made by
him.
-
Art. 14. Taxpayers who fail to
liquidate all or any part of the tax created by this
law, as well as the judges and notaries who through
negligence fail to take the steps necessary to have paid
the entire amount of the tax or any part thereof, shall
be subject to a fine equivalent to the amount left
unpaid, the taxpayers, when the circumstances require,
being also subject to the payment of the amount in
stamps left unpaid.
-
Art. 15. The collection of the
tax covered by this law does not allow for the payment
of fees to stamp tax collectors.
-
Art. 16. In cases not provided
for by this law with respect to the tax created by it,
the provisions of the Federal stamp tax law issued on
June 1, 1906, shall be made applicable thereto.
I, therefore, order that this be printed, published, distributed,
and given due compliance.
Given at the Palace of the Executive Power in Mexico, on the
thirteenth day of April, nineteen hundred and eighteen.
