The withholding tax rates for labor payments would vary between 0% and 35%.
The proposed legislation includes an amendment to section 383 of the Tax Code, establishing a withholding tax on payments from labor relationships, from retirement pensions, disability, old-age, survivors and labor risks.
Currently, four (4) withholding rates exist, the highest being 33%. In the proposal, six (6) different ranges and rates are considered. This new withholding system would be applicable from 1 March 2017. In the meantime the current system will still be applicable.