Mexican judges' association defends tax-exempt status for inherited retirement funds

Mexico's National Association of Circuit Court Judges and District Judges (JUFED) is defending the tax-exempt status of inherited retirement funds from AFOREs. The association argues that these funds represent the life savings of deceased workers and are intended to provide financial protection to their beneficiaries.

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The resources accumulated in an AFORE account constitute the life estate that a working person generated with their daily effort, whose purpose is to provide stability and economic protection to their family after their death.

JUFED's stance comes after a discussion at the Supreme Court of Justice of the Nation (SCJN) regarding a legal dispute over the taxation of these inherited assets. The SCJN had previously ruled that resources from individual retirement accounts distributed to beneficiaries should not be subject to Income Tax (ISR), deeming them part of the deceased worker's estate.

The association emphasized that considering these accumulated funds as taxable income, based on the argument that the beneficiary did not earn them, lacks equity. JUFED stated that taxing these savings not only distorts the nature of social security but also directly impacts the livelihood of dependents.

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To try to collect taxes on the savings of a deceased worker not only distorts the nature of social security, but also directly affects the sustenance of the bereaved.

Furthermore, JUFED cautioned against using the Supreme Court and national courts to advance ideological agendas. The organization asserted that the judiciary's constitutional role is not to act as a fiscal design entity or to force wealth redistribution through taxation, as this power rests with the legislative branch.

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The constitutional function of the Federal Judicial Power is not to act as a fiscal design entity nor to force a 'redistribution of wealth' through the tax route; that power corresponds to the Legislative Branch.