Contribute your brand to the company and amortize it at 15% a year: how the strategy works, when it's legitimate and why the SAT has it on its blacklist of schemes

The strategy makes the rounds in every entrepreneurs' forum: "register your brand, value it in the millions, contribute it to your company — the company deducts 15% a year and you withdraw profits without ISR". Like almost every market scheme, it mixes a real legal basis with an execution the authority has perfectly mapped. Here's the honest teardown: which part is true, where the trap is, and what the version that does hold up looks like — because it exists.

The legal basis that is real

Three true pieces: (1) intangible assets (brands, patents, rights) are deductible investments through amortization — the rate applicable to intangible assets that allow the exploitation of goods or rights is 15% a year (art. 33 LISR; high confidence in the rate for this category). (2) The in-kind contribution to capital is a valid way to capitalize — and it generates CUCA for the contribution value: capital that, in due course, can be reimbursed with the treatment of a capital reduction. (3) A brand built over years of operation is worth something — the valuation of intangibles is a serious discipline (ISO 10668, relief-from-royalty, income and market methods) with real appraisers. Up to here, everything exists. The promoted strategy assembles the pieces like this: the shareholder contributes "his" brand valued at $50M → the company amortizes $7.5M a year (a tax shield of ~$2.25M/year at 30%) → and the shareholder "withdraws" via reimbursements against the inflated CUCA, "without ISR". Sounds perfect. Now what the brochure doesn't say.

The four problems the brochure omits

1. The contribution is a disposal FOR YOU. Contributing an intangible to capital is disposing of it: the individual shareholder who contributes the "$50M" brand that cost him almost nothing to create has, in principle, a taxable gain of ~$50M at the progressive rate. The typical scheme "resolves" this by not declaring it or interposing steps — that is, it rests on an omission. 2. It's a reportable scheme, listed by name. The transfer of hard-to-value intangible assets between related parties is expressly in the catalog of reportable schemes (art. 199 CFF) — the advisor who implements it must disclose it to the SAT; the one who doesn't disclose it commits their own multimillion-peso infraction. You're executing a play that comes with an automatic notification to the referee. 3. Art. 5-A and the valuation battle. What is the business reason for the company to "buy" (via capital) the brand it was already using for free, created by its own owner? If the benefit is essentially fiscal, 5-A recharacterizes; and the aggressive valuation is fought appraiser against appraiser — with the adjustment, the rejected deduction and the penalties on the losing side. 4. Reimbursements of inflated CUCA = deemed dividend. The mechanics of capital reductions (art. 78 LISR) compare against CUFIN and detect exactly this: the reimbursement that exceeds the "real" capital is taxed as a dividend. The scheme's exit — the moment of cashing in — is where the trap closes.

The version that does hold up: the six safeguards

The legitimate case exists: the real brand, registered (IMPI), with a history of use and attributable cash flows, that is incorporated into a structure for genuine operational reasons (separating the intangible from the operating risk, licensing it to several entities, preparing a sale or franchise). The safeguards that separate it from the scheme: (1) a valuation by an independent appraiser with a defensible methodology and documented conservative assumptions; (2) a contemporaneous written business reason (the 5-A memo: what is sought economically beyond the fiscal effect); (3) the contributor's fiscal effect acknowledged and planned, not omitted (there are routes — timing, structures, the full cost-benefit analysis — but they're done in the open); (4) disclosure of the reportable scheme where applicable — the existence of the obligation doesn't prohibit the operation, it makes it transparent; (5) the REAL subsequent exploitation: royalties or use at market prices, with the brand functioning in the business; (6) proportionality — the intangible as one piece of a structure with substance, not as 95% of the balance sheet of a company that exists only to amortize it. Final labels: incorporation of a real brand with the six safeguards — defensible (high legal defensibility with a file; probability of audit: medium-high by design of the reportable catalog; burden of proof: entirely yours; downside if you lose: adjustment + penalties, with no criminal angle if everything was done in the open). The brochure version — over-valuation + omission of the effect on the contributor + reimbursements of CUCA — red zone: it's one of the schemes the SAT publishes, with recharacterization, deemed dividends and, in the variant with fabricated valuations, the door to criminal simulation charges.