On October 11, 2023, the “Decree that grants fiscal incentives to key sectors of the export industry consisting of the immediate deduction of investment in new fixed assets and the additional deduction” was published in the Official Gazette of the Federation. of training expenses” (hereinafter the “Decree”) that provides for various fiscal incentives. Below we point out the elements that we consider to be the main elements of the Decree:

1) Immediate deduction

By virtue of the Decree, a tax incentive is granted to: i) legal entities that pay taxes in terms of Title II (general regime) and Title VII, Chapter XII (simplified trust regime), and ii) individuals who pay taxes in accordance with Title IV, Chapter II, Section I (individuals with business and professional activities) of the Income Tax Law (LISR), when said taxpayers are dedicated to the production, elaboration or industrial manufacturing of certain goods and also export them, or either when they are dedicated to the production of cinematographic or audiovisual works whose content is protected by copyright, as long as they are exported.

The goods referred to above will be, among others, the following: i) products intended for human and animal nutrition, ii) fertilizers and agrochemicals, iii) raw materials for the pharmaceutical industry and pharmaceutical preparations, iv) electronic components, v) motors gasoline, hybrid and alternative fuels, for cars, vans and trucks, vi) electrical and electronic equipment, vii) internal combustion engines, turbines and transmissions, for aircraft, viii) non-electronic equipment and appliances for medical, dental and laboratory, ix) disposable material for medical use and x) optical items for ophthalmic use.

Taxpayers may choose to apply a stimulus when they estimate that during the years 2023 and 2024 the amount of income from the exports of the goods or works subject to the stimulus will represent at least 50% of their turnover in each year.

The stimulus provided for in the Decree consists of choosing to make the immediate deduction of the investment in new fixed assets acquired from the date of entry into force of the Decree and until December 31, 2024 that have the purpose of exclusive use for the development of the key activities indicated in the Decree, deducting in the year in which the investment is made, the amount resulting from applying to the original amount of the investment (MOI) only the percentages indicated for each type of good, which They range between 56% and 89%.

The foregoing will only be applicable with respect to those investments that taxpayers keep in use for a minimum period of two years immediately following the year in which the immediate deduction is made.

The stimulus will not be applicable in the case of office furniture and equipment, automobiles powered by internal combustion engines, among others.

Taxpayers who apply the aforementioned stimulus to determine the utility coefficient of the provisional payments to be made during the year 2024 or 2025 must add to the tax profit or reduce from the tax loss for the year 2023 or 2024 the amount of the immediate deduction of the investments for which the stimulus was chosen, and the amount of the deduction made in the same year may be reduced from the tax profit determined for the purposes of the provisional payments, which will be reduced in equal parts in the provisional payments and cumulatively.

Taxpayers must keep a specific record of the investments for which they chose to apply the immediate deduction in accordance with the Decree, which must contain supporting documentation.

2) Training expenses

Likewise, the Decree provides a stimulus for the taxpayers indicated above, who may apply during the annual declaration for the fiscal years 2023, 2024 and 2025 an additional deduction equivalent to 25% of the increase in the expense incurred for training that receives each of its workers in the exercise in question.

For the purposes of the above, the increase will be the positive difference between the expense spent for training in the year and the average expense that the taxpayer has spent for said concept in the fiscal years of 2020, 2021 and 2022, averaging even when in said exercises no expense has been incurred for training. The training will be that which provides technical or scientific knowledge linked to the taxpayer’s activity.

The deduction will only be applicable with respect to the training provided by taxpayers to their workers registered with the Mexican Social Security Institute. This stimulus will not be cumulative for LISR purposes.

3) Stimulus requirements

The Decree provides that taxpayers who, among others:

1. They do not refute the presumption established in article 69-B of the Federal Tax Code (CFF);
2. The presumption provided for in article 69-B Bis of the CFF has been applied;
3. They have firm tax credits or, since they are payable, they are not guaranteed or the guarantee is insufficient;
4. They have canceled the certificates issued by the SAT for the issuance of CFDI in accordance with article 17-H of the CFF or are in the temporary procedure for the use of digital stamps in terms of article 17-H Bis of the CFF.

In addition to the requirements indicated throughout the Decree, taxpayers must comply with the following:

1. Be registered in the RFC and have the tax mailbox enabled;
2. Have an opinion on compliance with obligations in a positive sense;
3. Submit a notice stating that they opt for the application of the fiscal incentives described above, which must be presented during the thirty calendar days immediately following the month in which the aforementioned incentives are applied for the first time.

Finally, the aforementioned Decree will come into force the day after its publication in the Official Gazette of the Federation..

Below, we provide you with the link where you can consult the aforementioned publication in more detail:

https://www.dof.gob.mx/nota_detalle.php?codigo=5704676&fecha=11/10/2023#gsc.tab=0

We remain at your disposal for any questions or clarifications regarding this publication.

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Mexico City

October 2023