Tax Benefits

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Tax incentives & Benefits for eco-friendly products in State of Mexico.

Mexico Advances Green Manufacturing

While we always strive to move forward with innovative products, we also stay informed on any changes in our growing industry. Mexico is adapting to clean manufacturing, which bring incentives and tax benefits along with embracing eco-conscious production methods for our environment. 

Using biodegradable and compostable products such as ours provides tax benefits to companies in the State of Mexico as part of the government's environmental and sustainability initiatives. These benefits are aimed at incentivizing businesses to adopt eco-friendly practices, reduce environmental impact, and promote a circular economy. By utilizing biodegradable and compostable materials, companies can qualify for tax deductions or credits, encouraging investment in greener technologies and practices. These tax incentives not only support environmental conservation efforts but also contribute to the overall economic development and competitiveness of businesses in the state.

By making BIODEGRADABLE and COMPOSTABLE  products in Mexico to service its massive agricultural production, on the border with California which represents the largest producer in the U.S., we feel we are in great position to provide you with a necessary component to your operations - one where you will be rewarded for utilizing come end of the fiscal year when having to report expenses.

Below are some links to press releases providing further details on these TAX BENEFITS - we would like to help you make the most of these advantages.

Below are some links to press releases providing further details on these TAX BENEFITS - we would like to help you make the most of these advantages.

New Environment Taxes in State of Mexico 

Starting from April 1, 2024, new provisions within the Financial Code for the State of Mexico will come into effect - introducing significant changes regarding environmental taxation. Two key taxes will be affected:

  1. Ecological Tax on Waste Disposal, Confinement and Storage, also known as "The Waste Tax": This tax targets any individuals or entities engaging in profitable activities that dispose of non-hazardous urban waste in landfills, collection centers, or other disposal sites within the State of Mexico. The tax rate is set at MXN 100 per metric ton or a proportion thereof, based on the amount of waste disposed of monthly. However, waste destined for reuse, recycling, co-processing, or valorization within six months is exempt from this tax.
  2. ax on Pollutant Emissions to Water, also known as "The Water Tax": This tax applies to individuals or entities that discharge pollutants into water bodies within the State of Mexico as a result of their activities. The tax is calculated based on the quantity of water affected by pollutant substances emitted or discharged, measured in milligrams per liter. Rates vary depending on the type of pollutants, with MXN 108 per cubic meter for basic pollutants and MXN 141 per cubic meter for metals and cyanides. If water is contaminated by multiple substances, the tax must be paid for each one.

In addition, there are new rates applicable as well to the Tax on Pollutant Air Emissions (also known as "The Air Emissions Tax"), in force from 2022.

These taxes aim to regulate and mitigate environmental impact caused by waste disposal and water pollution, while also incentivizing recycling and pollution reduction efforts. Compliance with these new tax provisions will be crucial for businesses operating within the State of Mexico to avoid financial penalties and contribute to environmental sustainability.
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Mexico offering tax incentives to taxpayers in key sectors of export industry

On October 11, 2023, Mexico's Federal Official Gazette published a Presidential Decree offering tax benefits to eligible taxpayers involved in key sectors of the export industry. These incentives encompass accelerated tax depreciation for investments in new fixed assets and an additional tax deduction for increased workforce training expenses. The Decree, effective as of October 12, 2023, coincides with the government's strategies to attract foreign investment and enhance Mexico's competitiveness in supply chain optimization and nearshoring. The eligibility extends to legal entities and individuals earning taxable income from business activities and professional services under the Mexican Income Tax Law.

The incentives would be granted to taxpayers involved in the production, manufacture and export of goods in the following categories:

  1. Products destined for human and animal consumption
  2. Fertilizers and agrochemical products
  3. Raw materials for pharmaceutical industry
  4. Certain electronics parts
  5. Machinery for watches, measurement control and navigation instruments, and medical equipment
  6. Batteries and specific electricity components
  7. Petrol, hybrid and alternative-fuel engines for cars, vans and trucks
  8. Electricity and electronic equipment, steering, suspension, transmission and brake systems (among other parts) for cars, vans, trucks, ships and aircrafts
  9. Internal combustion engines, turbines and aircraft transmissions
  10. Non-electric equipment and devices for medical health and dental use, disposable medical material and optical products of ophthalmic use

The incentives/tax credits can vary between (56-89%), and are currently allowed to be RETROACTIVE to tax years 2000, 2021, and 2022.

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