In an effort to strengthen the trend of relocating supply chains to Mexico, known as “Nearshoring”, a decree was published today in the Official Gazette of the Federation that grants tax incentives to key sectors of the export industry. These incentives consist of the immediate deduction of investment in new fixed assets and an additional deduction for training expenses. This decree will come into effect the day after its publication.
The beneficiaries of this decree are individuals or legal entities who, within the national territory, produce, process or manufacture certain goods intended for export, such as:
(i) Products for human and animal consumption; (ii) fertilizers and agrochemicals; (iii) raw materials for the pharmaceutical industry; (iv) electronic components for computers and phones (circuits, capacitors, semiconductors, coils, modems, etc); (v) machinery for watches, measuring, control, and navigation instruments; (vi) electronic medical equipment; (vii) parts and accessories for electrical installations (batteries, accumulators, cells, etc); (viii) various types of engines for cars, pick-ups, and trucks; (ix) equipment and parts for cars, pick-ups, trucks, trains, ships, and aircraft (steering and transmission systems, suspension, brakes, seats, etc); (x) various types of aircraft engines and (xi) non-electronic devices for medical, dental and laboratory use, disposable material.
It’s important to note that tax incentives will only apply if the taxpayer is in full compliance with their tax obligations and has a positive opinion of compliance according to Article 32-D of the Federal Tax Code.
Immediate Deduction:
This allows the deduction of investment in new fixed assets acquired between October 12th and December 31st, 2024, deducting it in the fiscal year in which it is made. The deductible amount results from applying a percentage that ranges from 56% to 89%, depending on the specific activity, instead of the percentages established in articles 34, 35, and 209, sections B and C of the Income Tax Law. If the taxpayer is engaged in two or more of the mentioned activities, the percentage corresponding to the activity that generates the most income in the year this incentive is applied will be used.
This deduction will be applicable as long as, during the fiscal years of 2023 and 2024, income from goods exports represents at least 50% of the total invoiced in each year and the investment remains in use for a minimum of two consecutive years after its deduction.
Training Expenses:
This refers to an additional deduction, applicable in the annual tax return for the fiscal years 2023, 2024, and 2025, equivalent to 25% of the “increase” in the expense allocated to training their workers. This increase will be calculated as the positive difference between the training expense of the year in question and the average expense of the fiscal years 2020, 2021, and 2022.
This deduction will only be valid for training provided to workers registered with the Mexican Social Security Institute. Training is understood to be that which provides technical or scientific knowledge related to the taxpayer’s activity.
The Tax Administration Service may issue the general rules necessary for the correct application of these tax incentives and clarify possible ambiguities present in the Decree.
This decree represents a significant step in efforts to promote the relocation of supply chains, either through the creation of new companies or the expansion of existing capacity throughout the country.
For more information, we invite you to contact our partners specialized in the Tax and Foreign Trade area.
Alejandro Torres, Partner:+52 (55) 5258-1072 | ajtorres@vwys.com.mx
Luis Miguel Jiménez, Partner:+52 (55) 5258-1058 | lmjimenez@vwys.com.mx