Chihuahua, Chih., January 6th, 2021.

Dear clients and friends,

We hereby inform you that on December 30th, 2020 the decree that amends several tax incentives for the northern border region, was published in the Federal Official Gazette.

The herein amendment seeks to extend, until December 31st 2024, the term in which the incentives for the income tax and value added tax will be applied, pursuant the National Development Plan 2019-2024.

The acts or activities subject to the tax incentives must be fully carried out in the northern border region, in order to generate new employment sources and industries arising from the supply and demand of new goods and services, which is the purpose of said Decree.

Individuals and sectors that have wrongfully applied such tax incentives are being identified, in order to prevent them and other taxpayers who provide transportation services for goods and people, by land, sea or air, from wrongfully applying the incentives. It is important to note that the provision of services shall begin and end in the northern border region, thus no stopovers shall happen outside that region.

Additionally, tax incentives are granted to taxpayers who have at least eighteen months of residence and a tax domicile, branch, agency or establishment within the northern border region, which consists on the implementation of tax credits which allows a reduction in the tax burden regarding the value added tax and income tax of companies and individuals with business activity, whose income is generated by transactions performed within the herein referred region.

For further information on this matter, please do not hesitate to contact Mr. Sergio Humberto Salas Medrano, Partner of the Fiscal and Administrative Area, at ssalas@iclmx.com.

Lic. Sergio H. Salas Medrano.
Inintegrum Legal Corporation, S.C.