DECREES ARE SIGNED TO EXTEND THE VALIDITY OF FISCAL STIMULES ON THE NORTHERN BORDER AND ESTABLISH STIMULES FOR THE SOUTHERN BORDER
On November 27, President López Obrador announced the signing of four decrees to apply fiscal incentives both on the northern and southern borders, which include:
- Extension of the validity of the stimulus decree on the northern border
- Decree on fiscal incentives on the southern border
- IEPS stimulus decree for gasoline on the southern border
- Decree that establishes tariff benefits in the Chetumal free zone.
Fiscal incentives for both the northern and southern borders include the reduction of the VAT rate from 16% to 8%, the reduction of income tax by a third, leaving the effective rate reduced from 30% to 20% in the case of legal entities (in the case of individuals the rate effective will depend on the range of the rate in which they are located to calculate the tax), as well as incentives to the IEPS of gasoline.
The decree of fiscal incentives for the southern border, contemplates benefiting the border municipalities of the states of Chiapas, Tabasco, Campeche and Quintana Roo, while the stimuli of the northern border will continue to benefit the municipalities that make up the border area in Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas.
The “Decree of fiscal stimuli North Border Region” entered into force on January 1, 2019, and would end its application on December 31, 2020, however with this expansion, it will continue its validity until the end of 2024, contributing to the strengthening of the economy of the formal taxpayers of this region.