On December 26, 2024, the extension of tax incentives in the northern border region of Mexico, including Baja California, was announced. These incentives, in effect since 2019, seek to strengthen the local economy and improve competitiveness compared to the border areas of the United States. The extension, published in the Official Gazette of the Federation, extends the validity of these benefits until December 31, 2025.
Tax Benefits:
- Value Added Tax (VAT): A reduced rate of 8% is maintained, in contrast to the general rate of 16% applicable in the rest of the country.
- Income Tax (ISR): The reduction to 20% continues for individuals and corporations that carry out business activities in the region.
Impact on the Local Economy:
The continuation of these incentives is seen as a positive measure for the commercial and business sector of Baja California and other border states. By reducing tax burdens, the aim is to encourage investment, promote job creation and offer more competitive prices to local consumers.
Requirements to Access the Incentives:
To benefit from these reduced rates, taxpayers must meet certain requirements established by the Tax Administration Service (SAT), which include:
- Be registered in the Federal Taxpayers Registry (RFC).
- Have a tax domicile in the northern border region.
- Demonstrate the implementation of real economic operations in the area.
- Not be included in lists of non-compliant taxpayers or those with firm tax credits.
Future Perspectives:
The extension of these incentives until the end of 2025 provides certainty to entrepreneurs and traders in the region, allowing them to plan in the medium term. However, it is crucial that the authorities continually evaluate the impact of these measures to determine their effectiveness and the need for future extensions or adjustments.
In conclusion, the permanence of fiscal incentives on Mexico's northern border represents a key strategy to boost the region's economic development, promoting investment and strengthening competitiveness in international markets.
If you live in this region and want to obtain this tax benefit, send us a message.
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