Mexico’s Congress approved modifications to the following laws on October 30: The Income Tax Law (MITL), the Value Added Tax Law (VATL), the Excise Tax Law (IEPS) and the Federal License Law (LFD), and the Federal Fiscal Code (FFC) (together, ‘the 2020 Mexican Tax Reform’). Enactment of the 2020 Mexican Tax Reform will occur on its date of publication in the Official Federal Gazette. The 2020 Mexican Tax Reform will enter into effect January 1, 2020, unless an article expressly states a different effective date.
In general, the 2020 Mexican Tax Reform is meant to incorporate fundamentals of the OECD Base Erosion and Profit Shifting (BEPS) initiative. The economic context in which the 2020 Mexican Tax Reform was legislated assumes GDP growth of between 1.5% and 2.5%, and an increase in tax collection without the creation of new taxes. Modifications to the Mexican Tax Law most relevant for inbound investment into Mexico are summarized below.