Mexico’s Tax Breaks Begin Now
This is big news for Mexican importers, and U.S. shippers that have clients in Mexico. On December 29, 2018 Mexico’s President Andres Manuel Lopez Obrador (AMLO) ordered by decree to cut taxes for the Northern Region of Mexico. This decree lowers tax rates for both value-added taxes (IVA 16%) and income taxes. IVA will be reduced from 16% to 8% during 2019 and 2020. Below are the Mexico Border regions that are eligible for the tax breaks.
AMLO states, “Vamos a apoyar con estímulos fiscales la zona norte del país, de manera especial, toda la franja fronteriza con Estados Unidos. Es un proyecto muy importante para impulsar la inversión y la creación de empleos, y aprovechar la fortaleza económica de los estados de la Unión Americana”, explicó……. “We are going to support the North Region of the country with tax breaks, in a special way, all of the front border with the United States. This is a very important project in order to boost investment, create employment, and take advantage of the strong economy of the American union,” he explained.
Moreover, the Tax Administration Service of Mexico (SAT) is not currently ready for this change, but is doing what it can to adjust to the changes. We are being told that SAT will be ready by Monday, January 7, 2019 to implement the new IVA tax of eight percent. For any questions, feel free to reach out to our team anytime. Email now.