Mexico: Income tax and VAT benefits for economic activities in Isthmus of Tehuantepec
Tax benefits and administrative facilities for taxpayers who carry out certain productive economic activities within Isthmus of Tehuantepec
Income tax and VAT benefits for economic activities in Isthmus of Tehuantepec
A decree was published in the office gazette on 5 June 2023 granting tax benefits and administrative facilities for taxpayers who carry out certain productive economic activities within the Isthmus of Tehuantepec. The decree is effective 6 June 2023.
Natural and legal persons resident in Mexico, as well as residents abroad with a permanent establishment in Mexico who are taxed as legal persons of the general regime, natural persons with business and professional activities, and legal persons of the simplified regime of trust, may apply for the benefits established in the decree, which include:
- Tax credit equivalent to 100% of the income tax (ISR) during the first three fiscal years
- Tax credit of 50% of the ISR in the three subsequent years, or up to 90% if certain minimum employment levels are exceeded
- Tax credit equivalent to 100% of value added tax (VAT), creditable for four years
- Immediate deduction of 100% of the original amount of the investment of new fixed assets, applicable during the first six fiscal years
Those who apply the benefits of the decree may not also apply the following:
- Benefits for companies with maquila operations
- Optional regime for groups of companies
- Tax incentive for trusts dedicated to the acquisition or construction of real estate
- Fiscal incentives for national film and theatrical production and distribution
- Fiscal stimulus to the research and development of technology of the ISR law
- Fiscal stimulus to high-performance sport
The Ministry of Finance and Public Credit must issue a certificate that proves compliance with the applicable requirements under the decree, as well as publish on its website and update every six months the list of taxpayers to which it has issued the certificate.
The decree states that the tax authorities will issue the necessary rules for the decree’s proper and correct application.
Read a June 2023 report prepared by the KPMG member firm in Mexico
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