Mexico City, at February 23, 2025
As part of the actions aimed at achieving the objectives outlined in the national strategy known as «Plan México«, recently announced by the Office of the President, various industrial promotion strategies have been considered. These include tax benefits, the simplification of the outbound Export Manufacturing Program 4.0 (IMMEX 4.0), the establishment of additional economic develop zones, and the promotion of financing for micro and medium-sized enterprises through development banking institutions.
The goals of the so-called «Plan México» include strengthening the domestic industry for the local and regional market, expanding import substitution through value chains, generating employment, and enhancing scientific, technological, and innovation development and research.
In support of these objectives, on January 21, 2025, the Decree granting tax incentives to support the national strategy called «Plan México» (hereinafter, the «Decree») was published in the Official Gazette. The purpose of the Decree is to encourage new investments that foster dual training programs and promote innovation. The Decree shall enter into force the day following its publication and aims to encourage business relocation (nearshoring).
As a result of the publication of the Decree, the «Decree granting tax incentives to key sectors of the export industry, consisting of the immediate deduction of investments in new fixed assets and the additional deduction of training expenses,» published in the Official Gazette on October 11, 2023, and its subsequent amendment published on December 24, 2024, has been repealed as well as any administrative provisions that contradict or oppose the provisions of the new Decree. However, taxpayers currently applying the provisions of the repealed decree may continue to do so until its full completion.
The tax incentives granted under the Decree are the following:
- Immediate deduction of investments in new fixed assets acquired between January 22, 2025, and September 30, 2030. New fixed assets shall be understood as those used for the first time in Mexico.
- An additional deduction applicable for fiscal years 2025 to 2030, equivalent to 25% of the increase in expenses incurred for employee training during the relevant fiscal year or for expenses incurred in innovation activities.
To implement the tax incentives, Article Four of the Decree establishes that an Evaluation Committee, will be responsible for issuing guidelines (hereinafter, the «Guidelines») for the procedure, criteria, and eligibility parameters that investment projects submitted by interested taxpayers must meet to obtain the compliance certificate required to apply the incentives. Additionally, the Committee shall determine the maximum amount that taxpayers may apply for each fiscal year in connection with each tax incentive.
The Evaluation Committee must publish the Guidelines in the Official Gazette within the following 60 calendar days.
Who may apply for the tax incentives?
Legal entities that are subject to taxation under Title II (Legal Entities) or Title VII, Chapter XII (Simplified Regime for Legal Entities) of the Mexican Income Tax Law (MITL), as well as individuals taxed under Title IV, Chapter II, Section I (Individuals with Business and Professional Activities).
Who may not apply for the tax incentives?
Taxpayers who fall under any of the following circumstances:
- Those who fall under any of the scenarios established in Article 69, penultimate paragraph, of the Federal Fiscal Code (FFC)[1] and listed in the tax authority website referred to in the last paragraph of such provision.
- Those who have not rebutted the presumption established in Article 69-B, first paragraph of the FFC (presumption of non-existent operations) and, therefore, are definitively in such a situation in accordance with the fourth paragraph of the same article. Likewise, the incentives shall not apply to taxpayers with partners or shareholders who fall under such presumption.
- Taxpayers who have conducted transactions with taxpayers referred to in the preceding paragraph and have not demonstrated to the tax authorities that they effectively acquired the fixed assets or received the services covered by the corresponding tax invoices.
- Those who have been subject to the presumption established in Article 69-B Bis of the FFC (presumption of undue transfer of the right to reduce tax losses), once the corresponding list has been published in the Official Gazette and on the tax authority website.
- Those with outstanding tax liabilities that are final and binding, or that, upon becoming due, are not properly secured, or whose guarantee is deemed insufficient.
- Those who fail to comply with any of the requirements set forth in the Decree, including the specific records of investments, training, and innovation referred to therein.
- Those who are undergoing a liquidation process.
- Those subject to the temporary restriction of the use of digital seals for issuing tax invoices, pursuant to Article 17-H Bis of the FFC.
- Those whose certificates for issuing tax invoices have been canceled by the tax authority, in accordance with Article 17-H of the FFC.
- Those who fail to comply with the provisions established in the Guidelines.
What rules apply to the immediate deduction incentive for investments?
In the fiscal year in which the investment is made, taxpayers may apply the deduction using the percentages established in Article Second of the Decree on the updated Original Amount of Investment, instead of the maximum percentages provided in Articles 34, 35, and 209, Sections B and C of the Mexican Income Tax Law.
The aforementioned provision establishes deduction percentages based on the type of asset (Section I) and according to the activity in which machinery and equipment, other than those specified in Section I, are used. The deduction percentages are higher for investments made in 2025 and 2026 compared to those made from 2027 to 2030.
In the event that the assets are sold, the total amount of income received shall be considered as taxable gain.
The portion of the investment that was not deducted in the fiscal year of acquisition shall be deducted in the fiscal year in which the assets are sold, lost, or cease to be useful, in accordance with the percentages set forth in Article Third, Section III of the Decree, considering the number of years elapsed since the deduction was applied and the percentage used in that fiscal year.
To which fixed assets does the incentive not apply?
The incentive shall not apply to:
- Office furniture and equipment.
- Automobiles powered by internal combustion engines.
- Vehicle armor equipment.
- Aircraft other than those used for agricultural aerial spraying.
- Any fixed asset that cannot be individually identified.
What are the implications of the immediate deduction incentive for new fixed assets in provisional income tax payments?
To determine the profit quotient (used to calculate advance income tax payments) for the fiscal years in which the incentive is applied, the amount of the immediate deduction must be added to tax profit or deducted from the tax loss, as applicable.
Furthermore, the tax profit determined for the advance income tax payment may be reduced by the amount of the immediate deduction made in the same fiscal year, in equal and cumulative parts, in advance payments starting from the month in which the investment is made.
What happens in case of non-compliance with the requirements?
If taxpayers have applied the tax incentives but fail to comply with the established requirements, they shall be required to pay the corresponding tax, along with the applicable updates (by inflation) and surcharges resulting from the nullification of the tax incentives.
What rules apply to the additional deduction incentive for training or innovation expenses?
To determine the increase on which the tax incentive will be applied, the training or innovation expenses incurred in the relevant fiscal year will be compared with the average expenses for the same concepts in the three immediately preceding fiscal years, even if no expenses were incurred in those years.
For these purposes, training refers to the provision of technical or scientific knowledge related to the taxpayer’s activities, while innovation expenses include those linked to investment projects for the development of inventions leading to patents, as well as investment projects developed to obtain the initial certifications required for integration into local/regional supply chains, in accordance with the provisions set forth in the Guidelines.
The additional deduction shall be subtracted from the difference between taxable income and authorized deductions for the corresponding fiscal year, provided that the income exceeds the deductions, and up to the amount of such difference.
This incentive shall not be considered taxable income for income tax purposes, and if the incentive is not applied in the fiscal year in which the expense is incurred, the right to apply it in subsequent years shall be forfeited.
What requirements must be met to apply the incentives?
To apply any of the tax incentives, the following requirements must be met:
- Be registered with the Federal Taxpayer Registry and have an active tax mailbox.
- Have a positive opinion on compliance with tax obligations.
- Obtain the compliance certificate issued by the Evaluation Committee for the application of the incentives.
- Comply with the Guidelines issued by the Evaluation Committee.
The specific requirements for each tax incentive are as follows:
- Immediate deduction incentive
- The acquisition of new fixed assets must be exclusively intended for the development of the taxpayer’s activities.
- The assets must be kept in use for at least two years following the fiscal year in which the immediate deduction was applied, except in cases of loss due to unforeseen circumstances or force majeure.
- Maintain a record of the investments for which the incentive is applied, containing supporting documentation and relevant information regarding the asset and its deduction.
2. Additional deduction incentive for training or innovation expenses
- Submit the investment project, the collaboration agreement with the Ministry of Education regarding dual education, and the investment project for the development of inventions or initial certification, as applicable.
- The training must be provided to active employees registered with the Mexican Social Security Institute, in accordance with the Guidelines.
- Maintain a specific record of the training or investment projects for the development of inventions or initial certifications, as established in the Guidelines.
The tax and foreign trade attorneys of our firm are at your disposal to assist you in analyzing and potentially applying this Decree.
Sincerely yours,
Gerardo Nieto
Gil Zenteno
Alejandro Barrera
Victor Barajas
Francisco J. Matus
Norberto A. Ruiz
José Miguel Tuirán Salas
[1] Among others, said circumstances are the following:
- Taxpayers with final and binding outstanding tax liabilities.
- Taxpayers with assessed tax liabilities that, despite being due, have not been paid or secured in any of the forms permitted by the FFC.
- Taxpayers registered with the Federal Taxpayer Registry who are classified as «not located.»
- Taxpayers against whom a final conviction has been issued for the commission of a tax-related offense.
- Taxpayers with tax liabilities that have been affected under the terms set forth in Article 146-A of the FFC.
- Taxpayers who have been granted the forgiveness of any tax liability.
- Individuals or legal entities that have used, for tax purposes, invoices covering non-existent transactions, without having demonstrated the materialization of such transactions within the legal term established in Article 69-B, eighth paragraph of the CFF, unless the taxpayer has corrected their tax situation within the same period.
- Individuals or legal entities whose digital seal certificate has been rendered ineffective by the tax authority for falling under any of the circumstances provided in Article 17-H, sections X, XI, or XII of the FFC, unless the taxpayers remedy the irregularities detected by the tax authority or correct their tax situation.