Decree Extending the Validity of Tax Incentives

Decree Extending the Validity of Tax Incentives

January, 2025

On December 24, a Decree was published in the Official Gazette of the Federation (DOF) extending the validity of various tax incentives aimed at promoting investment, supporting the economy in border regions, and mitigating the impact of fuel costs.

On December 24, a Decree was published in the Official Gazette of the Federation (DOF) extending the validity of various tax incentives aimed at promoting investment, supporting the economy in border regions, and mitigating the impact of fuel costs. This Decree establishes new dates and conditions for these tax benefits, valid until December 31, 2025.

1. Tax incentives for the export industry
The Decree published on October 11, 2023, "Decree granting tax incentives to key sectors of the export industry consisting of the immediate deduction of investment in new fixed assets and the additional deduction of training expenses" is amended to extend the validity of the tax incentives. These incentives aim to strengthen productivity, encourage nearshoring, and position Mexico as a competitive destination for business relocation.

2. Tax incentives in border regions
The validity of the Decrees for the northern and southern border regions, originally published in 2018 and 2020, respectively, is extended. These incentives seek to improve economic conditions at the borders, support vulnerable communities, and address impacts arising from migratory flows.

3. Tax incentives applicable to fuels
The validity of the following decrees related to fuels is extended until December 31, 2025:
• Decree establishing tax incentives regarding the special tax on production and services applicable to the indicated fuels.
• Decree establishing complementary tax incentives for automotive fuels: Facing increases in international fuel and crude oil references.
• Decree establishing tax incentives for the sale of the fuels mentioned in the southern border of the United Mexican States: Focused on service stations located in municipalities bordering Guatemala.

These incentives aim to protect consumers' purchasing power and ensure economic stability in these regions.

4. Validity
The Decree comes into force the day after its publication and extends the application of these incentives until December 31, 2025. This ensures the continuity of the tax benefits and allows taxpayers to plan their economic activities appropriately.

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INTRODUCCIÓN

On December 20, 2024, the Secretary of Administration and Finance of the government of Mexico City, Juan Pablo de Botton Falcón, presented the Economic Package for the fiscal year 2025 to the Political Coordination Board and the Board of Directors of the local Congress, which includes revenues of 291,525.6 million pesos. Among the most notable elements of the Package are the following: Revenues for the fiscal year 2025 are projected at a total amount of 291,525.6 million pesos, representing a nominal increase of 8.8% compared to what was approved for 2024.