Further to our previous communication regarding Mexico’s 2027 Tax Reform, we would like to inform you that, on November 3, 2026, the Chamber of Deputies approved the amendments made by the Senate to the Income Tax Law (LISR), thereby completing the legislative approval process.

The principal tax measures previously communicated remain in place, with changes primarily affecting the exceptions available to certain economic sectors.

1. Key Provisions Retained in the Income Tax Law

1. Authorized deductions: The general limitation of 99% of authorized deductions remains, subject to a cap equivalent to 96.67% of taxable income.
2. Tax losses: The limitation on the use of tax losses to 50% of the taxable profit for the year remains, together with an extension of the carryforward period from 10 to 20 years.
3. Estimated income tax payments: The adjustments to their calculation remain, including the application of factors of 1.0658 and 2.6162, as applicable.
4. MXN 50 million threshold: In general, the new limitations will apply to legal entities with annual taxable income exceeding MXN 50 million, subject to the exceptions established by law.
5. Investment incentives: The investment incentive provisions remain, subject to the relevant eligibility conditions, limits and application periods.
6. Repeal of the optional regime: The repeal of the optional regime contemplated by the reform remains, subject to the applicable effects and transitional provisions.
7. Tax basis of shares: The adjustments to the rules for determining the tax basis upon a sale of shares remain.
8. Contributed Capital Account (CUCA) and Net Tax Profit Account (CUFIN): The amendments concerning the calculation and updating of these tax accounts remain.
9. Payments abroad and interest: Changes concerning payments to nonresident recipients and the tax treatment of interest remain, subject to the specific applicable rules and requirements.
10. Advance payments: The provisions addressing the tax treatment of advance payments remain, with their application depending on the nature of each transaction.
11. Simplified Trust Regime (RESICO) for individuals and legal entities: The adjustments to the Simplified Trust Regime remain, making it important to review eligibility and applicable compliance requirements.

2. Changes to the Exceptions

The latest approved amendments concern Article 78-E of the Income Tax Law and expand the categories of taxpayers excluded from the mechanism limiting deductions and tax losses:

• Automotive industry: Companies engaged in vehicle assembly and manufacturing under an authorized bonded warehouse regime are included, excluding income from sales of goods within Mexican territory.
• Fuel sector: Taxpayers engaged in retail sales, distribution or commercialization of gasoline and diesel are excluded, provided they hold the permits required under applicable legislation.

These exceptions allow qualifying taxpayers to remain outside the new limitation mechanism even if their income exceeds the general MXN 50 million threshold.

Other relevant provisions retained

3. Federal Revenue Law and Federal Fees Law

With respect to the 2027 Federal Revenue Law and amendments to the Federal Government Fees Law, the main measures previously communicated remain in place, with no additional material changes identified during the final legislative stage.

Federal Revenue Law

• Digital platforms: New income tax and VAT withholding obligations for transactions carried out through digital platforms, including transactions involving legal entities and nonresident taxpayers.
• Tax regularization: Expansion of the regularization program to certain taxpayers meeting the applicable requirements.
• Income tax withholding on interest: An annual withholding rate of 0.68% is established for 2027.
• Repatriation of capital: An incentive for bringing funds held abroad back to Mexico, subject to a 7.5% income tax rate and applicable requirements.

Federal Fees Law

• Immigration and tourism services: Adjustments to fees for certain immigration services and procedures.
• Telecommunications: Changes to fees for use of the radio spectrum and related incentive schemes.
• Federal assets: Updates to fees and duties associated with concessions, water resources and other federally owned assets.

4. Legislative Status

Following approval on November 3, 2026, the amendments to the Income Tax Law completed the legislative process in both chambers of Congress and were submitted to the Federal Executive for enactment.

As of November 4, 2026, publication in the Official Gazette of the Federation (Diario Oficial de la Federación, DOF) remains pending.

Companies should consider these provisions in their 2027 tax planning, particularly their effects on authorized deductions, utilization of tax losses and estimated income tax payments.

At JA DEL RÍO | Plante Moran, we will continue to monitor official publication and any supplementary regulations that may be issued. Please do not hesitate to contact us to discuss how these changes may affect your operations

J.A. DEL RÍO a Plante Moran Firm offers a wide array of specialized consulting services to assist you with these and other matters, in order to ensure that your project complies with the applicable characteristics  contained in this agreement.

If you have any questions, J.A. DEL RÍO a Plante Moran Firm can provide you with our experts to advise in matters concerning compliance with your legal and tax obligations. Once again, please let us know if we may be of any further assistance to you at: contacto@jadelrio.com.