Significant tax incentives are granted to key sectors of the export manufacturing industry

The beneficiaries of this decree are individuals or legal entities that, within national territory, produce, prepare or manufacture certain goods intended for export, such as: (i) Products for human and animal nutrition; (ii) fertilizers and agrochemicals; (iii) raw materials for the pharmaceutical industry; (iv) electronic components for computers and telephones (circuits, capacitors, semiconductors, coils, modems, etc.); (v) machinery for watches, measuring, control and navigation instruments; (vi) electronic medical equipment; (vii) parts and accessories for electrical installations (batteries, accumulators, cells, etc.); (viii) various types of engines for automobiles, vans and trucks; (ix) equipment and parts for automobiles, vans, trucks, trains, ships and aircraft (steering and transmission systems, suspension, brakes, seats, etc.); (x) various types of engines for aircraft; and (xi) non-electronic devices for medical, dental and laboratory use, and disposable material. It is important to note that the tax incentives will only be applicable if the taxpayer is in full compliance with its tax obligations and holds a positive compliance opinion pursuant to article 32-D of the Federal Tax Code. Immediate deduction: This allows the deduction of investment in new fixed-asset goods acquired between October 12 and December 31, 2024, deducted in the tax year in which it is made. The amount to be deducted results from applying a percentage that varies from 56% to 89%, depending on the specific activity, instead of the percentages established in articles 34, 35 and 209, sections B and C of the Income Tax Law. If the taxpayer engages in two or more of the aforementioned activities, the percentage corresponding to the activity generating the greater part of its income in the year in which this incentive is applied will be used. This deduction will be applicable provided that, during the 2023 and 2024 tax years, income from the export of goods represents at least 50% of the total invoiced in each year and the investment remains in use for a minimum of two consecutive years after being deducted. Training expenses: This is an additional deduction, applicable in the annual return for the 2023, 2024 and 2025 tax years, equal to 25% of the “increase” in expenditure allocated to the training of its workers. This increase will be calculated as the positive difference between the training expense of the year in question and the average expense of the 2020, 2021 and 2022 tax years. This deduction will only be valid for training provided to workers registered with the Mexican Social Security Institute. Training is understood to mean that which provides technical or scientific knowledge related to the taxpayer’s activity. The Tax Administration Service may issue the general rules necessary for the proper application of these tax incentives and clarify any ambiguities present in the Decree. This decree represents a significant step in the efforts to promote the relocation of supply chains, whether through the creation of new companies or the expansion of existing capacity throughout the country. For more information, we invite you to contact our partners specialized in the Tax and Foreign Trade area. Alejandro Torres, Partner:+52 (55) 5258-1072 | ajtorres@vwys.com.mx Luis Miguel Jiménez, Partner:+52 (55) 5258-1058 | lmjimenez@vwys.com.mx