Dear clients and friends,

On December 27, the decree reforming Article 278 of the Tax Code for Mexico City (“CFCDMX”) regarding payroll tax (“ISN”) was published in the Official Gazette of Mexico City.

This modification aims to update the conditions for tax reductions applicable to companies, adapting to the realities of the current labor market.

One of the main changes is that companies that prove an annual increase of 33% in their workforce or that start operations will now be entitled to a 1% reduction on the rate established in Article 158 of the CFCDMX, which is currently of a 4%, meaning that the reduction will implicate the payment of the ISN under a 3% rate in Mexico City.

Additionally, to access this reduction, companies must submit an informational declaration according to the rules issued by the Treasury, simplifying the process for obtaining this reduction.

If you are interested in receiving personalized advice, whether to clarify questions about its application, evaluate possible impacts, or analyze legal alternatives to defend your rights, our team of experts is available at the following emails addresses:

Paul Kavanagh: paul@k-g.com.mx

Luis Kanchi: Lkanchi@k-g.com.mx

Miguel Alonso: malonso@k-g.com.mx