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Mexico

Mexico's lower house exempts some automakers and fuel stations from new tax deduction limits

The carve-outs leave car dealers exposed to a cap on deductions, a change that matters to automotive investors and tax planners.

Photo: The Rio Times

What happened

Mexico's Chamber of Deputies approved Senate-introduced amendments to the Income Tax Law that exempt qualifying automotive manufacturing operations and commercial gasoline stations from proposed caps on tax deductions and losses. Mexico Business News+1 The law caps deductions for firms with revenue above 50 million pesos (US$2.7 million). The Rio Times Fuel distributors and carmakers' assembly plants received special treatment under the law, but car dealers did not. The Rio Times The dealers' group AMDA says about 1,000 dealerships and 70,000 direct jobs are at risk. The Rio Times

Around it

The amendments were finalized as a core component of the 2027 Economic Package. Mexico Business News AMDA wants President Claudia Sheinbaum to issue a decree recognizing low-margin businesses such as dealers. The Rio Times

What comes next

The law now goes to President Claudia Sheinbaum for her review. The Rio Times

Sources

  1. The Rio TimesMexico Car Dealers Warn on New Tax Limit
  2. Mexico Business NewsMexico’s Automotive Sector Gains Tax Relief Under 2027 Plan
  3. Automotive Industry Solutions MarkLinesMexico approves exemptions for certain OEMs from new limits on tax deductions

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