ARTICLE
4 February 2025

Plan Mexico: Tax Incentives

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Vazquez Tercero & Zepeda

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Specialization and experience are our strong cards. With 50 years of experience and specialized practice in international trade and tax matters, VTZ Law Firm aims to be that experienced and agile sherpa that guides companies through the different legal mazes so that they can focus on what it really is important: competing in the market without setbacks.

On January 21, 2025, the government of Mexico published a decree offering tax incentives to promote new investments in (i) fixed assets, (ii) workforce training, and (iii) innovation...
Mexico Tax

On January 21, 2025, the government of Mexico published a decree offering tax incentives to promote new investments in (i) fixed assets, (ii) workforce training, and (iii) innovation for both domestic and foreign companies, including micro, small, and medium-sized enterprises (Mipymes). These tax incentives are part of the "Plan Mexico". Although the decree entered into force, companies cannot benefit from these tax incentives yet, as explained below.

Immediate tax deduction for Investments

The decree allows taxpayers to deduct investments in new fixed assets immediately acquired between January 22, 2025, and September 30, 2030. The deduction percentage depends on the type of asset. This incentive excludes office furniture, internal combustion engine vehicles, and vehicle armoring equipment. Additionally, assets must remain in use for a minimum of two years after the deduction.

Taxpayers with multiple activities should apply deductions to the activity generating the majority of income.

Tax incentive for training and innovation expenses

The decree grants a 25% additional deduction on increased training expenses for employees. This applies to the difference between current and average training expenses from the previous three years. Companies can use this incentive from 2025 to 2030.

Alternatively, the Decree also grants a tax incentive to training that provides technical or scientific knowledge related to the taxpayer's activity. Innovation expenses include investment projects aimed at developing inventions that lead to patent acquisition.

These expenses also cover projects for obtaining initial certifications needed for integration into local or regional supply chains. The specific guidelines for these projects will be published later.

If the deduction is not applied in the relevant fiscal year, taxpayers lose the right to claim it in future years.

Who can apply for these incentives?

These tax incentives are available to:

  • Legal entities under the general tax regime or the simplified trust regime.
  • Individuals under the business or professional tax regime.

MIPYME will receive key support

A portion of the tax incentives will go to MIPYME. At least 1 billion pesos will be allocated to companies with annual revenues of up to 100 million pesos in the preceding fiscal year. This support is designed to enhance their growth and competitiveness.

Deduction percentages based on the type of asset

Deduction percentages depend on the type of asset. For a detailed breakdown of assets and their deduction percentages, refer to the decree here.

Control and evaluation: government authorizations

An Evaluation Committee will oversee compliance with the decree's requirements. The committee will ensure the total benefits do not exceed 30 billion pesos during the decree's term. Of this amount, 28.5 billion pesos will be allocated for new fixed asset purchases, and 1.5 billion pesos will support training and innovation deductions.

Requirements

To qualify for the tax incentives, companies must:

  1. Be registered in the Federal Taxpayers Registry with an active tax mailbox.
  2. Have a positive opinion on compliance with tax obligations.
  3. Submit an investment project, a dual education agreement with the Ministry of Education, and a project for innovation or certification.
  4. Obtain a certificate of compliance from the Evaluation Committee.
  5. Follow the guidelines set by the Evaluation Committee.

Restrictions

The tax incentives do not apply to:

  • Office furniture, vehicles with internal combustion engines, or non-identifiable fixed assets.
  • Taxpayers with unresolved tax liabilities or those who fail to meet the decree's requirements.
  • Companies in liquidation or under restrictions for issuing digital tax receipts.

Publication of guidelines

As noted above, companies cannot enjoy yet enjoy the tax incentives because the government must issue the relevant regulations. According to the Decree, the government must publish detailed guidelines within 60 days in the Official Gazette of the Federation (DOF), i.e. the deadline is March 23, 2025.

Decree application period

This decree remains in effect until September 30, 2030. The incentives provide significant opportunities for investment, training, and innovation that will help improve Mexico's economic growth and competitiveness.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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