The Tax Regime for Agricultural, Livestock, Forestry, and Fishing Activities (AGAPES) in Mexico is designed to support legal entities dedicated exclusively to these primary sector activities. This regime offers tax benefits and administrative facilities that seek to promote the development of these activities, which are essential to the country's economy.
Who can pay taxes under the AGAPES Regime?
The following entities may opt for this regime:
- Legal entities governed by agrarian law (ejidos, communities, rural societies) dedicated exclusively to agricultural, livestock or forestry activities.
- Production cooperative societies dedicated exclusively to fishing activities.
- Other legal entities that meet the requirement of obtaining at least 90% of their income from primary activities, excluding income from the sale of fixed assets or land.
Tax benefits of the AGAPES Regime
Legal entities that pay taxes under this regime can access the following benefits:
- Income Tax Exemption: Income Tax is not payable on income from primary activities up to an amount equivalent to 20 times the annual value of the Measurement and Update Unit (UMA) for each partner, without exceeding 200 times the annual value of the UMA in total.
- Reduction of ISR: If income exceeds the exemption limit but is less than 423 times the annual value of the UMA, a reduction of 30% is applied to the ISR determined on the surplus.
- Administrative facilities: : Deductions are allowed for expenses for labor of temporary field workers, livestock feed and minor expenses, up to 10% of own income, without exceeding $800,000 MXN annually.
- Half-yearly statements: There is the option to submit provisional ISR payments and VAT returns on a semi-annual basis, after notifying the SAT.
Important considerations
It is essential that legal entities wishing to pay taxes under the AGAPES regime comply with the requirements established by law, including the proportion of income derived from primary activities and the exclusivity of said activities. Furthermore, they must maintain adequate control of their operations and comply with the corresponding tax obligations.
If you need advice to determine whether your company qualifies for the AGAPES regime or require support in complying with your tax obligations, do not hesitate to contact us. We are here to help you optimize your resources and take advantage of the benefits the law offers to the primary sector.
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