The tax depreciation allows the deduction of the loss of value of the fixed assets over time.
In Mexico, depreciation rates are set in the Income Tax Law (LISR) and vary according to the type of good and the economic activity in which they are used.
Depreciation Rates by Type of Asset
The Article 34 of the Income Tax Law details the maximum depreciation rates for different fixed assets:
Constructions
- 10% for properties declared as monuments.
- 5% for other constructions.
Railways
- 3% for fuel supply pumps.
- 5% for railways.
- 6% for railway cars.
- 10% for communication and signaling equipment.
Other Assets
- 10% for office furniture and equipment.
- 6% for boats.
- 25% for cars, buses, trucks and tractor-trailers.
- 30% for computers and servers.
- 100% for cattle and vegetables.
Depreciation Rates by Activity
The Article 35 of the ISR Law establishes specific depreciation rates for machinery and equipment according to economic activity:
- 5% in electricity generation and distribution.
- 6% in metal production.
- 16% in air transport.
- 20% in restaurants.
- 25% in the construction industry.
- 35% for research into new products.
- 50% in the manufacturing of magnetic components for computing.
- 10% in other unspecified activities.
If a taxpayer carries out multiple activities, the rate corresponding to the activity with the highest income from the previous year will be applied.
Conclusion
Tax depreciation is a crucial tool for optimizing the tax burden of companies in Mexico. By knowing the applicable rates and the conditions for the deduction, companies can maximize their tax benefits and improve their cash flow.
It is important for taxpayers to stay up to date on tax regulations and consult with a professional to ensure compliance and proper application of these provisions.
We recommend that you do an analysis of the return on investment prior to the acquisition of a fixed asset.
In TAX-ID In Mexico, we can help you optimize your tax burden and comply with your fiscal obligations.
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