LatinNews Daily - 07 June 2023

In brief: Mexico unveils tax breaks for firms investing in southeast

*Mexico’s finance ministry (SHCP) has announced a series of tax benefits for companies that invest in a business corridor that the government led by President Andrés Manuel López Obrador is developing in the Tehuantepec Isthmus in the southeast of Mexico, which connects the Pacific port of Salina Cruz in Oaxaca state with the Gulf coast port of Coatzacoalcos in Veracruz state. The SHCP said the benefits looked to stimulate the relocation of companies and attract investment to the southeast of the country in order to reduce regional inequalities. The benefits include total exemption from income tax (ISR) during the first three years of operation in the region, with companies only paying 50% of ISR in the following three years; accelerated depreciation opportunity for investments during the first six years of operation; exemption from value-added tax (VAT) for operations carried out in the corridor; and the ability to claim back VAT from purchases made outside the zone for four years. “We are confident that these new incentives will encourage investment, generate quality jobs and, in the long term, strengthen the economy in southeastern Mexico, providing a solid foundation for a more just and equitable future,” reads the SHCP statement.

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