Important tax incentives in Yucatan

August 2, 2024

Von Wobeser y Sierra - On June 28, 2024, a Decree was published in the Official Gazette of the Federation (the "Decree"), which promotes investment in the Industrial Welfare Poles Progreso I and Merida I of the State of Yucatan, through which various tax incentives are granted for Income Tax and Value Added Tax purposes for the performance of economic activities within the mentioned poles, in accordance with the following:

It is important to consider that, by economic activities, the Decree comprises the following activities carried out within the Welfare Industrial Poles:

I. Electrical and electronics
II. Semiconductors
III. Automotive (electromobility)
IV. Auto parts and transport equipment
V. Medical devices
VI. Pharmaceuticals
VII. Agro-industry
VIII. Electric power generation and distribution equipment (clean energy)
IX. Machinery and equipment
X. Information and communication technologies
XI. Metals and petrochemicals

A. Income Tax ("ISR")

For ISR purposes, the Decree grants a tax incentive consisting of a tax credit credit against the amount of the tax incurred, determined in the tax year in question for the applicable economic activities, which will be equivalent to 100% of the ISR incurred in the first three tax years, and 50% in the three subsequent tax years (this percentage may be increased to 90% in the event that the minimum employment levels established are exceeded).

In addition to the foregoing, authorised taxpayers may immediately deduct 100% of the original amount of the investment in new fixed assets used in the poles to carry out their productive economic activities during the six fiscal years following receipt of the authorisation certificate from the Ministry of Finance and Public Credit ("SHCP"), instead of applying the percentages authorised by the Mexican Tax Law ("Ley del Ley del Hacienda y Crédito Público").
the percentages authorised by the Income Tax Law.

It is important to note that when taxpayers obtain income other than that derived from the economic activities provided for, they must separately determine ISR on such income without applying the tax credit provided for in the Decree.

B. Value Added Tax ("VAT")

For VAT purposes, the Decree grants a tax incentive to taxpayers that carry out productive economic activities within the poles that sell goods, provide independent services or grant the temporary use or enjoyment of goods to persons that carry out economic activities within the poles, for four years from its entry into force, which consists of a tax credit equivalent to 100% of the VAT payable by the taxpayer.
equivalent to 100% of the VAT payable on such activities.

In order for this tax incentive to be applicable, it is necessary that no VAT is transferred to the purchaser of the goods or services and that the goods, services or the temporary use or enjoyment are used and exploited by the purchasers in the performance of their productive economic activities within the poles.

Important tax incentives in Yucatán

Taxpayers who do not apply this tax credit in the payment declaration corresponding to the month in which they carry out the corresponding activities will lose the right to apply it at a later date.
Now, in order to apply the tax incentives described above, it will be necessary to comply with the following requirements:

I. To be up to date in the fulfilment of their tax obligations.
II. To have a document that grants the use, exploitation and exploitation and, if applicable, possession of all or part of the surface of the poles, verified by the competent authority of the State of Yucatan.
III. Present the investment project for which the use, development and exploitation was granted and, if applicable, the possession referred to in the previous section, verified by the competent authority of the state of Yucatan.
IV. Have their tax domicile in the area where they carry out their productive economic activities.
In order to maintain and apply the tax benefits provided for in the Decree, taxpayers must submit to the SHCP progress on the investment project mentioned above and comply with the minimum employment levels determined by the SHCP in accordance with the provisions of the project.

The SHCP must issue the certificate of compliance with the established requirements, or the resolution of non-compliance with them.
This document is valid on the date of issue and its purpose is purely informative and not interpretative with respect to the information it contains. It is not an opinion and should not be considered as advice applicable to particular cases under any circumstances. Should you require professional advice on any of the matters contained in this document, please contact us directly.

The information included in this note does not constitute, nor is it intended to constitute, nor should it be construed as legal advice on the subject matter or subject matter discussed herein. Rather, this note is for general informational purposes only. To obtain legal advice on a particular matter in connection with this issue, please contact Von Wobeser y Sierra.

vonwebeser.com