The Mexican government has issued a decree granting tax incentives to companies operating in 11 key economic sectors in the welfare industrial zones of Progreso I and Mérida I in the state of Yucatan on 28 June, 2024.
Tax incentives are granted for electrical and electronics sector, semiconductors, automotive (electromobility), auto parts and transportation equipment, medical devices, pharmaceuticals, agroindustry, equipment for the generation and distribution of electric power (clean energy), machinery and equipment, information and communication technologies, and metals and petrochemicals.
Main tax benefits
Income tax:
- A 100% tax credit on income tax payable is available for the first three years, followed by a 50% credit for the next three years. If minimum employment levels are exceeded, these incentives can increase up to 90%. These benefits are not considered taxable income for the recipients.
- Immediate 100% deduction of investments in new fixed assets used for productive activities in the zones for six fiscal years.
Value Added Tax (VAT):
- A 100% tax credit on VAT payable is available for selling goods, providing services, or granting the use of goods within the zones, provided the tax is not passed on to the purchaser and the items are used for productive activities.
The decree aims to promote investment and economic development in the region by providing these tax incentives to companies in the electrical, electronics, semiconductor, automotive, auto parts, medical devices, pharmaceuticals, agroindustry, clean energy, machinery, ICT, and metals/petrochemicals sectors operating in the specified industrial zones.
