The initiative proposes to tax at progressive rates of 10% to 30% all income obtained from donations, inheritances, and legacies exceeding $15,000,000 pesos. 

On March 4, 2025, an initiative was submitted to the Congress of Mexico City, with a draft decree that seeks to amend Articles 93, 130, and 132, in addition to adding a new Article 132 bis, within the Law on Income Tax [in Spanish: la Ley del Impuesto Sobre la Renta], with the purpose of taxing with progressive rates from 10% to 30% all income obtained from donations, inheritances, and legacies that exceed 15,000,000 pesos for individuals.

The aforementioned initiative was submitted to the Congress of Mexico City with the purpose of being proposed to the House of Deputies, pursuant to the terms established in Section VII of Article 73 of the Political Constitution of the United Mexican States.

It is worth mentioning that currently, income from inheritance or bequests is tax exempt, while donations are only exempt in certain cases. 

Some of the arguments supporting the initiative are as follows:

• Mexico ranks last among the major economies of Latin America and the Caribbean in terms of  wealth tax collection, with an amount that barely reaches the equivalent of 0.34% of the GDP, compared to the Latin American average of 2.57%.
• The Organization for Economic Co-operation and Development, [in Spanish; Organización para la Cooperación y el Desarrollo Económicos] (OECD), has indicated that between 2020 and 2021, the average tax collection of its member countries was 34.1%. However, Mexico is one of the countries with the lowest tax collection levels in proportion to Gross Domestic Product (GDP).

Furthermore, the proposed reform proposes to tax the aforementioned concepts in a staggered mannerat different rates, according to the amount of income earned, which is as follows:

• From 15 million and one peso to 60 million pesos, a tax of 10%. In other words, a 10% tax on the amount exceeding the limit of 15 million pesos and up to 60 million pesos.
• From 60 million and one peso to 150 million pesos, an additional tax of 20%. That is to say, on the amount exceeding the previous limit of 60 million pesos and up to 150 million pesos, will incur an additional tax at the rate of 20%.
• From 150 million and one pesos upwards, an extra tax of 30% will be incurred. Namely on the amount exceeding the above limit of 150 million pesos and upwards, will incur an additional tax at the rate of 30%.

Furthermore, it is important to point out that the initiative proposes five recommendations that may be the start of a change in the current state of the Mexican tax system:

1. Establish a progressive federal tax on large fortunes considering rates ranging from 2% to 5%, applying to large fortunes ranging from $20 million to $20 billion.
2. Promote deep, progressive, and transparent tax changes needed at both the federal and state levels. These modifications should aim at a systematic increase in Income Tax for the top 1% of income earners, equalize the rates charged to both labor and capital, promote taxes on large inheritances and donations, and review current property taxes, such as property and ownership taxes; so that they collect better and from those who own the most property.
3. Review the tax privileges of the wealthiest 1%. These modifications should include exemptions, deductions, discounts, and other forms of tax waivers which reduce the availability of public resources for other priorities.
4. Prioritize public investment in social infrastructure such as health, education, and health care. These projects should be based on the recognition of the needs of the different populations and territories, in order to break with the logic of megaprojects.
5. Promote the participation of the Mexican government in regional fiscal discussions. Encourage the government of Mexico to participate in regional fiscal discussions towards the creation of a Latin American fiscal bloc, which is currently being led the governments of Colombia and Chile to promote a regional fiscal covenant.

Conversely, it is important to point out that the Law on Income Tax establishes that income received by inheritance or legacy is currently exempt from tax, whereas donations are exempt only when they originate from spouses, ascendants, or direct descendants. 

Lastly, it is should be noted that this is not the first time in which a legislator seeks to tax large fortunes in Mexico. A couple of years ago the Parliamentary Group of Movimiento Ciudadano submitted an initiative that proposed a tax on inheritances. Notwithstanding, the said initiative was not approved by the House of Deputies.  

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If you have any questions, J.A. DEL RÍO 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.