On October 11 2011 the president signed the Maquiladora Tax Decree, which was published in the Official Gazette. The decree provides for an extension of the fixed-rate corporate tax stimulus that was originally scheduled to expire in 2011.

The decision is welcome, as the ability to apply the relevant fixed-rate corporate tax benefit in fiscal years 2012 and 2013 provides greater certainty for foreign investors while the continued existence of the tax itself is debated. Maquiladora companies(1) or companies subject to the Decree for the Promotion of Manufacturing, Maquiladora and Export will not be required to pay more than a 17.5% tax rate on profits derived from Mexico during the extension period, provided that they comply with the requirements set out in the many tax and customs provisions that apply to them.

The decree is partly the result of the lobbying efforts of the National Council for the Maquiladora and Export Manufacturing Industry, which has worked towards its adoption for the past year.

For further information on this topic please contact Adrián Vázquez, Horacio A López-Portillo, Eduardo Zepeda or Veronica Vázquez Bravo at Vázquez Tercero y Asociados by telephone (+52 55 5534 36 36), fax (+52 55 5534 91 95) or email ([email protected], [email protected], [email protected] or [email protected]).


(1) Maquiladora companies enter into contracts with foreign entities whereby the latter provide inventory or other goods, either directly or indirectly, which the maquiladora companies transform, manufacture or repair, or use to render services.