Mexico: Economic package includes tax incentive modifications

The Federal Executive (Ejecutivo Federal) on November 15, 2024, presented the 2025 economic package to Congress. Although it does not propose new taxes or increases to existing taxes, it does include specific adjustments.

• Surcharges: The surcharge rates for payment extensions remain unchanged, with monthly rates specified for different installment periods.
• Tax incentives: Existing fiscal incentives are maintained with some proposed modifications:
  • Tax credits against income tax and special tax on production and services for diesel purchases are continued for specific uses, such as machinery in business activities and vehicles for public and private transport
  • A 50% credit on toll road payments for transport businesses
  • Elimination of the incentives for shared utility rights in hydrocarbons
  • New incentive for the simplified trust regime (Resico) for agricultural, livestock, forestry, or fishing activities.
  • Additional incentives for national investment projects in cultural productions
  • Suspension of the high-performance sports tax incentive
• Withholding tax on interest: Financial institutions will apply a 0.5% withholding tax on capital generating interest payments.
• Digital tax receipts: The deadline for canceling digital tax receipts (CFDI) is extended to the last day of the month in which annual returns should be filed.
• Transitory articles:
  • The revenue law will be effective from January 1, 2025.
  • Modifications to import and export tax rates have been approved.
  • The compensation fund for small and intermediate taxpayers will be continued.
  • Various administrative and fiscal measures, including studies on tax evasion and agreements for payment in installments with Institute of Security and Social Services for State Workers (ISSSTE).A new fiscal scheme is proposed for Pemex, which simplifies the payment of hydrocarbon royalties, to incorporate the so-called "Petroleum Welfare Duty," which taxes oil at a rate of 30% and non-associated natural gas at a rate of 11.6264%, and will also apply to assignees.
• Federal rights law modifications. Multiple changes are proposed, most notably, the special mining exploitation rights would be increased from 7.5% to 8.5% and the extraordinary right from 0.5% to 1%.

Read a November 2024 report (Spanish) prepared by the KPMG member firm in Mexico