Taxpayers interested in obtaining the benefits contained in the published decree should comply, among others, with the following requirements:
- Have their tax obligations up to date
- Obtain a valid concession title or be the owner of some area within a Well-Being Development Zone (from Salina Cruz, Oaxaca to Coatzacoalcos I and II, Veracruz)
- Submit, if applicable, the investment project for which the concession certificate was granted
- Have their tax domicile within the areas mentioned in the second requirement
The Ministry of Finance and Public Credit (SHCP) should issue a certificate indicating compliance with the requirements, and on its Website, in the months of January and July of each year, will update the list of taxpayers who carry out economic activities within the Well-Being Development Zones which have been granted the abovementioned certificate.
This decree comprises, without limitations, the following economic activities:
- Electrical and electronics
- Semiconductors
- Automotive (electromobility)
- Auto parts and transportation equipment
- Medical devices
- Pharmaceutical
- Agroindustry
- Electric power generation and distribution equipment (clean energy)
- Machinery and equipment
- Information and communication technologies
- Metals and petrochemicals
- Any other activities not included in the previous sections determined by the Governing Board of the Interoceanic Corridor of the Isthmus of Tehuantepec for the Well-Being Development Zones, in terms of the applicable legal provisions
The tax incentive applies to the following taxpayers:
a) Individuals
business activity, professional services, and Simplified Trust Regime
b) Companies residing in Mexico
General Regime and Simplified Trust Regime
c) Residents permanently established in Mexico
Income Tax (ISR)
For the purposes of Income tax, the income from productive economic activities carried out within the Well-Being Development Zones shall obtain a tax credit (amount that is subtracted from the amount payable) to be credited against the amount of the income tax incurred, according to the following:
- Equivalent to 100%, 90%, or 50% of the tax credit, the percentage will depend, for example, on the minimum levels of jobs to be generated, as well as other requirements that the incentive creditor should meet. Such incentive shall be granted during three fiscal years from the one in which the taxpayers obtain the certificate.
The percentage of the tax credit obtained may be applied against the provisional payments of Income Tax, as long as the total amount of tax previously paid is stated in the (annual) declaration of the fiscal year, without reducing the percentage of tax credit applied in the monthly payments.
Regarding deductions, the taxpayers may carry out an immediate deduction of 100% of the original amount of the investment of new fixed assets that they use in the Well-Being Development Zones to carry out their productive economic activities, instead of applying the maximum authorized percentages of the Income Tax Law for six fiscal years, counted from the one in which the certificate is obtained.
Value Added Tax.
A tax incentive is granted, for four years, of a 100% of the Value Added Tax which must be paid on the sale of goods, the provision of independent services, or the granting of the temporary use or enjoyment of goods that will be creditable against the tax that must be paid for the abovementioned activities.
Restrictions:
- The application of the tax incentive does not give rise to any refund or compensation.
- The incentive is personal and may not be transferred, not even as a consequence of any merger or division.
- The right to apply the tax incentive in its entirety shall be lost when the taxpayer does not apply it in any fiscal year and could have done so.
- With respect to fixed asset deductions, these may not be exercised in the case of office furniture and equipment, automobiles, automobile armouring equipment, or any non-individually identifiable fixed asset.
- This decree may not be applied in conjunction with maquila operations, groups of companies, trusts for real estate construction, and incentives for cinematography and technology research and development, as well as the tax incentive for high-performance sports.
As a final point, it is important to mention that the Ministry of Finance and Public Credit, within a period of 90 calendar days from the entry into force of the decree, should issue and publish the guidelines for its application in the Official Gazette of the Federation.
At Mazars we are at your service if you require an in-depth analysis of the decree and identify if it is applicable for your investment or business.
