Tax Incentives for Investments in Mexico: VAT

Redacción Opportimes 31 enero, 2023

As 3 visões do nearshoring: CMN, CCE e Comce — Photo: Pixabay.

Mexico grants the following tax and non-tax incentives to investments, according to information from the World Trade Organization (WTO).

With respect to Value Added Tax (VAT):

Exemption in the payment of VAT on the sale of goods made between residents abroad, provided that the goods have been exported or introduced to the national territory under a program authorized under the «Decree for the promotion of the manufacturing industry, maquiladora and export services» or similar regime under the terms of the customs legislation or in the case of companies of the automotive terminal or manufacturing industry of motor vehicles or auto parts for their introduction to fiscal deposit. (Article 9, section IX of the VAT Law).

Exemption in the payment of VAT on international maritime transportation of goods provided by persons resident abroad without a permanent establishment in the country. (Article 15, section VI of the VAT Law).

Tax credit consisting of an amount equivalent to 100% of the VAT payable on the importation of goods under the temporary import customs regimes for manufacturing, transformation or repair in maquila or export programs; tax warehouse for the assembly and manufacturing process of vehicles; manufacturing, transformation or repair in bonded warehouse, and strategic bonded warehouse, which will be creditable against the tax payable on the aforementioned activities. (Article 28-A of the VAT Law).

Tax incentives

0% VAT rate for services rendered by residents in the country used abroad, for the concept of:

Technical assistance, technical services related to this and information related to industrial, commercial or scientific experiences.
Maquila and submaquila operations for export under the terms of the customs legislation and the Decree for the Promotion and Operation of the Export Maquiladora Industry.
Advertising.
Commissions and mediations.
Insurance and reinsurance, as well as bonds and reinsurance.
Financing operations.
Filming or recording.
Answering service in telephone centers for calls originating abroad, which is contracted and paid for by a resident abroad without a permanent establishment in Mexico.
Information technology services (Article 29, section IV, paragraphs a), b), c), d), e), f), g), h), and i) of the VAT Law).

0% VAT rate for the international transportation of goods provided by residents in the country and port services of loading, unloading, storage, storage, custody, stowage and transportation within the ports and port facilities, provided that they are provided in maneuvers for the export of goods (Article 29, section V of the VAT Law).

Hotels

Tax incentive to taxpayers who provide partial construction services for real estate intended for residential housing, consisting of an amount equivalent to 100% of the VAT caused by the provision of such services and will be applied against the tax caused mentioned. (Article First Decree granting housing support measures and other tax measures. (Official Gazette of the Federation -DOF- of 03/26/2015).

Tax incentive for hotel and related services provided to foreign tourists participating in congresses, conventions, exhibitions and fairs, consisting of an amount equivalent to 100% of the VAT payable for the provision of the aforementioned services or granting of temporary use, and will be creditable against the tax payable for the aforementioned activities. (Article 2.3. of the Decree that compiles various tax benefits and establishes administrative simplification measures. DOF 26/12/2013).