The Special Economic Zones (“ZEEs” for their acronym in Spanish) will have tax benefits such as 100% income tax discounts and 50% on social security contributions for the first 10 years with the goal of attracting investment and generating jobs in these areas.
With a 100 percent discount on Income Tax and 50 percent social security contributions for the first ten years, the three Special Economic Zones (ZEEs) will seek to attract national and foreign investment. The zones will be Lázaro Cárdenas (Michoacán and Guerrero), Transisthmian Corredor (from Salina Cruz, Oaxaca to Coatzacoalcos, Veracruz) and Chiapas Port.
Experts have praised these incentives for being positive and unprecedented, with the goal of attracting investment and generating employment in these states that currently suffer from high levels of marginalization.
The fiscal incentives are directed towards both companies and individuals with investment activity in the ZEEs.
During the National Governors’ Conference, Mexican Secretary of Finance, José Antonio Meade, also said that after the first ten years of income tax relief, employers will still receive a discount of 50% for the five following years. During this same period, the discount on social security will be reduced to 25%.
Other financial benefits will also be applied to VAT as well as taxes on foreign trade transactions, Meade explained. He added that there will be a specific customs regime for ZEEs that will grant reductions on duties and tax relief on merchandise brought into these zones.
118 Projects are being Negotiated
To date, 118 investment projects exist in the ZEEs. Of this number, 24 are in advanced negotiation stages and constitute an investment of over 7 billion dollars, informed Gerardo Gutiérrez Candiani, Federal Authority for the Development of the ZEEs. Michoacán, Guerrero, Veracruz, Oaxaca and Chiapas are some of the states that will benefit from these investments.
Translated extract from El Financiero: http://www.elfinanciero.com.mx/economia/zonas-economicas-especiales-descontaran-100-de-isr-por-10-anos.html