In more detail
The tax incentives will be decided by a new Evaluation Committee, composed of a member of the Ministry of Finance and Public Credit, a member of the Ministry of Economy, and a member from the so-called Advisory Board for Regional Economic Development and Relocation (known by its Spanish acronym as CADERR). This committee will be led by Ms. Altagracia Gomez, who was named special business advisor to President Claudia Sheinbaum.
The Decree sets forth that from the MXN 30 billion of incentives, MXN 28.500 billion will be allocated to investments in new fixed assets, whereas the remaining MXN 1.500 billion will be allocated to the deductions from training and innovation associated to those fixed asset investments. The incentives will mainly focus on these industry fields:
- Power: up to 56% for the 2025-2026 period and up to 49% for the 2027-2030 period, in equipment for generation, conduction, transformation and distribution of electric power
- Hydrocarbons: up to 72% for the 2025-2026 period, and up to 67% for the 2027-2030 period, for fixed assets in hydrocarbons transportation, storage and processing; drilling rigs and oil processing and storage floating vessels
- Construction (generally): up to 86% for the 2025-2026 period, and up to 83% for the 2027-2030 period
- Railways: between 41% and 72% for the 2025-2026 period, and between 35% and 67% for the 2027-2030 period, for rolling stock, rails, maintenance machinery and equipment, fuel pumps and communication equipment
- Electromobility: up to 86% for the 2025-2026 period, and up to 83% for the 2027-2030 period, in the assembly-manufacturing of EV and hybrid vehicles
The Decree also covers other machinery and equipment such as vessels, computing and telecommunication equipment, molds as well as equipment for the metal, automotive, textile, mining, air transportation, telecommunication and manufacturing industries.
According to the Decree, taxpayers can immediately take the deduction at the relevant percentage during the relevant period, but only for new fixed assets acquired solely for developing activities in Mexico. Furthermore, taxpayers that meet the requirements of the Decree will be able to apply in the annual tax returns of the fiscal years 2025 - 2030 a tax incentive consisting of an additional deduction equivalent to 25% of the increase in the expenses incurred for training received by each of their employees in the fiscal year in question or for expenses incurred for innovation.
The Evaluation Committee is expected to issue guidelines for evaluating and determining project eligibility for incentives within 60 days. The Mexican Tax Authority may issue the general rules necessary for the proper and correct application of the Decree.
Our firm can provide tax advisory services to analyze the possibility of applying the benefits of the Decree in each particular case and, if applicable, implement the necessary procedures to obtain them.
