DECREE granting tax incentives to key sectors of the export industry consisting of the immediate deduction of the investment in new fixed assets and the additional deduction of training expenses.

24 de Octubre de 2023

DECREE granting tax incentives to key sectors of the export industry consisting of the immediate deduction of the investment in new fixed assets and the additional deduction of training expenses.

On October 11th, 2023, a Decree was published in the Official Gazette of the Federation («DOF») through which tax incentives are granted to key sectors of the export industry consisting of the immediate deduction of the investment in new fixed assets, as well as the additional deduction of training expenses; this is intended to make Mexico more competitive and attract more and better investment thanks to the Nearshoring effect.

The beneficiary companies must comply with certain requirements and obligations; they must also be taxed under Title II of the Income Tax Law, or they must be under the Simplified Trust Regime. In the case of individuals, the incentive will apply when they have business activities, as long as they produce, elaborate, manufacture industrially the goods indicated below, and also export them:

  • Products for human and animal feed.
  • Fertilizers and agrochemicals.
  • Raw materials for the pharmaceutical industry and pharmaceutical preparations.
  •  Electronic components, such as simple or loaded cards, circuits, capacitors, condensers, resistors, connectors and semiconductors, coils, transformers, harnesses and modems for computers and telephones.
  • Machinery for clocks, measuring, control and navigation instruments, and electronic medical equipment for medical use.
  • Batteries, accumulators, batteries, electrical conduction cables, plugs, contacts, fuses and accessories for electrical installations.
  • Gasoline, hybrid and alternative fuel engines for cars, vans and trucks.
  • Electrical and electronic equipment, steering systems, suspension, brakes, transmission systems, seats, interior fittings and stamped metal parts for automobiles, vans, trucks, trains, ships and aircraft.
  • Internal combustion engines, turbines and transmissions for aircraft.
  • Nonelectronic equipment and apparatus for medical, dental and laboratory use, disposable material for medical use and optical articles for ophthalmic use.
  • Production and export of cinematographic and audiovisual works.

This tax incentive established in this Decree will apply during the fiscal years 2023 and 2024; the amount of income from exports of the goods or works mentioned above, will represent at least 50% of its total turnover in each fiscal year. And it will consist of the possibility of the immediate deduction of the investment in new fixed assets acquired from October 12, 2023 and until December 2024, deducting in the corresponding fiscal year, the amount resulting from applying the percentages indicated in the Second Article of the decree, instead of those indicated in the Income Tax Law. (Articles 34, 35 and 209), the percentages established by the Decree itself will depend on the type of asset, ranging from 56% to 89%. We do not omit to state that there are some conditions that must be analyzed for each specific case, reason for which it will be necessary that you allow us to analyze together with you your real and specific case in order to take the maximum advantage of this deduction in the event that it is applicable to you.

At Rivadeneyra, Treviño y de Campo S.C. we are following up on this particular matter, and our attorneys are at your service to advise you on the fulfillment of the provisions mentioned herein and to guide you through the corresponding process. This paper is prepared for informational purposes. The content of this document should not be considered as legal advice or opinion.

Hoping that this information is useful to you, we remain at your service for any questions or additional comments that may arise in this regard. 

On October 11th, 2023, a Decree was published in the Official Gazette of the Federation («DOF») through which tax incentives are granted to key sectors of the export industry consisting of the immediate deduction of the investment in new fixed assets, as well as the additional deduction of training expenses; this is intended to make Mexico more competitive and attract more and better investment thanks to the Nearshoring effect.

The beneficiary companies must comply with certain requirements and obligations; they must also be taxed under Title II of the Income Tax Law, or they must be under the Simplified Trust Regime. In the case of individuals, the incentive will apply when they have business activities, as long as they produce, elaborate, manufacture industrially the goods indicated below, and also export them:

  • Products for human and animal feed.
  •  Fertilizers and agrochemicals.
  •  Raw materials for the pharmaceutical industry and pharmaceutical preparations.
  • Electronic components, such as simple or loaded cards, circuits, capacitors, condensers, resistors, connectors and semiconductors, coils, transformers, harnesses and modems for computers and telephones.
  • Machinery for clocks, measuring, control and navigation instruments, and electronic medical equipment for medical use.
  • Batteries, accumulators, batteries, electrical conduction cables, plugs, contacts, fuses and accessories for electrical installations.
  • Gasoline, hybrid and alternative fuel engines for cars, vans and trucks.
  • Electrical and electronic equipment, steering systems, suspension, brakes, transmission systems, seats, interior fittings and stamped metal parts for automobiles, vans, trucks, trains, ships and aircraft.
  • Internal combustion engines, turbines and transmissions for aircraft.
  • Nonelectronic equipment and apparatus for medical, dental and laboratory use, disposable material for medical use and optical articles for ophthalmic use.
  • Production and export of cinematographic and audiovisual works.

This tax incentive established in this Decree will apply during the fiscal years 2023 and 2024; the amount of income from exports of the goods or works mentioned above, will represent at least 50% of its total turnover in each fiscal year. And it will consist of the possibility of the immediate deduction of the investment in new fixed assets acquired from October 12, 2023 and until December 2024, deducting in the corresponding fiscal year, the amount resulting from applying the percentages indicated in the Second Article of the decree, instead of those indicated in the Income Tax Law. (Articles 34, 35 and 209), the percentages established by the Decree itself will depend on the type of asset, ranging from 56% to 89%. We do not omit to state that there are some conditions that must be analyzed for each specific case, reason for which it will be necessary that you allow us to analyze together with you your real and specific case in order to take the maximum advantage of this deduction in the event that it is applicable to you.

At Rivadeneyra, Treviño y de Campo S.C. we are following up on this particular matter, and our attorneys are at your service to advise you on the fulfillment of the provisions mentioned herein and to guide you through the corresponding process. This paper is prepared for informational purposes. The content of this document should not be considered as legal advice or opinion.

Hoping that this information is useful to you, we remain at your service for any questions or additional comments that may arise in this regard.

Rivadeneyra, Treviño y de Campo
Regulatorio

Vidaur Mora Espinosa

vmora@rtydc.com

Ivann Ferrer Toledo

iferrer@rtydc.com

Jesús Echegaray Cabrera

jchegaray@rtydc.com

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