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TAX INCENTIVES ARE GRANTED TO PROMOTE NEW INVESTMENTS THAT ENCOURAGE DUAL TRAINING AND INNOVATION PROGRAMS, AND THE DECREE KNOWN AS “NEARSHORING” IS REPEALED.

January 29th, 2025

Dear clients and friends,

On January 21, the Official Gazette of the Federation published the decree granting tax incentives to promote new investments that encourage dual training programs and foster innovation (the “Decree”).

Companies and/or individuals engaged in business activities may immediately deduct investments in new fixed assets made between the Decree's effective date and September 30, 2030. This includes machinery, equipment, infrastructure, and other assets, with specific deduction percentages depending on the type of asset and economic activity.

Additionally, an extra tax incentive of 25% is granted for expenses on training and innovation, provided that spending increases compared to the average of the previous three years. Training must be related to the taxpayer’s activities and registered with the relevant authorities.

The total amount of authorized tax incentives will be up to 30 thousand million pesos, of which at least 100 million pesos will be allocated to micro, small, and medium-sized enterprises with annual revenues of up to 100 million pesos. Companies undergoing liquidation processes, with tax irregularities, or failing to comply with the Decree's guidelines will not be eligible for the incentives.

The Decree aims to maximize economic development, promote business relocation, and strengthen local supply chains, thereby fostering social welfare and sustainable growth. Furthermore, the Decree repeals the decree published on October 11, 2023, which granted tax incentives to key sectors of the export industry, including immediate deduction of investments in new fixed assets and additional deductions for training expenses, commonly referred to as the “Nearshoring” decree.

For any questions or advice regarding this matter, our team of experts is available at the following email addresses:

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

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

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

Federico Gallego: fgallego@k-g.com.mx