In recent days Mexico issued a tax incentive which grants qualifying industrial and content exporters (i) an additional deduction equal to a 25% of the positive difference between the relevant annual expenditure (2023 – 2025) and the average accumulated expenditure (2020 – 2022) for scientific and technical employees´ training, and/or (ii) alternative depreciation percentages and periods (if so) for qualifying investments.
Much confusion and disinformation have arisen over this incentive, specifically regarding the latter of the referred benefits
Thus, it is convenient that before applying this second benefit (or not applying it when requirements are not believed to be met), beneficiaries of this incentive asses the following:
Previous Considerations:
- It is not exclusively addressed to enterprises relocated into Mexico.
- Does not foresee an immediate deduction (the incentive´s drafting creates confusion)
- In most cases the arithmetic effect of its application does not translate trough time in an income tax liability reduction (or in a tax loss increase).
- In some cases its application derives through time in an isolated income tax increase (or an isolated tax loss decrease).
- Its application does not decrease the tax year´s profit coefficient. However, in some cases it may diminish the monthly tax basis.
Qualifying Activities (Industries)
(i) Electrical and electronics, (ii) Semiconductors, (iii) Autocar (electromobility), (iv) Auto parts and Transportation Equipment, (v) Medical devices, (vi) Pharmaceutical, (vii) Agroindustry, (viii) Electricity Generation and Distribution Equipment (clean energies), (ix) Machinery and Equipment, (x) Information and Communication Technologies, (xi) Metals and Petrochemical.
The Interoceanic Corridor May Later Include New Qualified Activities
Risk and Opportunity Areas:
- No export parameters are provided for industrial exporters (as it is the case for content producers).
- Non qualifying exporters interested in its application may explore a corporate or contractual reorganization to apply it (e.g. those with national sells or sells to intermediaries).
