Tax Reform 2019 in MEXICO

On 28th December, 2018, the official Mexican gazette – the Federation Income Law (FIL) – was published for 2019, enforcing the following most relevant legal amendments.

• 1. Suspension of universal compensation of taxes
• 2. Anti-laundering notices for outsourcing
• 3. Tax incentives for the northern border region
  • validity: January 2019 to December 2022
  • reduction of VAT in the north border region from 16% to 8%
  • reduction of corporate income tax from 30% to 20%
  • Tax incentives for income tax and VAT will not be considered as taxable income for the purposes of income tax.
  • areas benefitting and the municipalities of the states of:
    • Baja California: Ensenada, Playas de Rosarito, Tijuana, Tecate and Mexicali
    • Sonora: San Luis Río Colorado, Puerto Peñasco, General Plutarco Elías Calles, Caborca, Altar, Sáric, Nogales, Santa Cruz, Cananea, Naco and Agua Prieta
    • Chihuahua: Janos, Ascensión, Juárez, Praxedis G. Guerrero, Guadalupe, Coyame del Sotol, Ojinaga and Manuel Benavides
    • Coahuila de Zaragoza: Ocampo, Acuña, Zaragoza, Jiménez, Piedras Negras, Nava, Guerrero and Hidalgo
    • Nuevo León: Anáhuac
    • Tamaulipas: Guerrero, Mier, Miguel Alemán, Camargo, Gustavo Diaz Ordaz, Nuevo Laredo, Reynosa, Rio Bravo, Valle Hermoso and Matamoros
  • Subjects
    • legal entities that pay into the general regime
    • legal entities with the option of accumulation based on effective collection
    • individuals who pay into the general regime of individuals with business and professional activities
  Ricardo Quibrera Saldaña, Partner/Chartered Accountant, ECOVIS Quibrera Saldaña, Santa Fe, Mexico

  The tax concessions will strengthen the economy of northern Mexico. Investors, too, may benefit from the new regulations.

  The third amendment provides exciting opportunity to keep current investments and to bring new investment into this area of the country. We foresee that the current business landscape in the north will make it an attractive and competitive region for national and international industries, given these incentives.

  At ECOVIS Quibrera Saldaña, Mexico, we provide consulting services in the establishment, taxation and auditing of national and foreign businesses.

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