The Upper Court of the Mexican Federal Court of Administrative Justice issued a recent non- binding and isolated precedent whereby the deductibility of the commitment fee was rejected, as the Court concluded that such expense is not strictly necessary.
The argument of the Court is that the commitment fee is not deductible for income tax purposes, since such consideration is only due when the borrower does not exert its right over the credit line agreed; and therefore, its nature is of a penalty set forth by the parties.
