Mexico - tax benefits for maquiladoras

Tax Insights ()

On December 26, 2013, an Industry Presidential Decree was published providing tax benefits for the maquiladora industry as follows:

  • Maquiladoras may apply a new tax benefit that provides an additional deduction relating to tax-exempt employee benefits payments, thereby softening the effect of a new law otherwise limiting deductions for tax-exempt benefit payments.
  • Taxpayers that complied with 216-Bis MITL1 as of December 31, 2009, in effect until December 31, 2013, will have a 2-year period to fulfill the requirement of a 30% foreign ownership of the machinery and equipment (M&E) used in the maquila operation, meaning there will be a two-year grandfather clause for maquilas operating before 2010.
  • Article 11 of the October 2003 Presidential Decree formally repeals the maquila industry reduced income tax rates in place from 2003 to 2013.
  • “Productive Activity” for the maquila industry is defined in the Official Gazette.
  • Tax Authorities must be informed of an APA election before June 30, 2014, according to the tax gazette.