On December 31st, 2018, the Fiscal Incentive Decree of the Northern Border Region was published in the Official Gazette of the Federation (DOF), granting tax benefits for Income Tax (ISR) and in matters of Value Added Tax (VAT or IVA), which entered into force as of January 1, 2019 and will be in force during 2019 and 2020. Next, we leave the most important points of the decree:


Taxpayers who may choose to apply the benefits of the Decree will be those who have the following requirements:

1. Prove an antiquity in their fiscal domicile, agency or establishment, within the northern border region, that is equal to or greater than eighteen months to the date of the application for registration to the “Register of beneficiaries of the stimulus for the border region. north”.

2. When the seniority is less than eighteen months, including those taxpayers who initiate activities, it must be accredited before the SAT that they have the economic capacity, new assets of fixed assets and facilities to carry out their operations in said region.

3. Request and obtain authorization from the SAT in the registry of the “Register of beneficiaries of the stimulus for the northern border region”; This request must be made no later than March 31 of the 2019 fiscal year.

4. In the case of taxpayers who initiate operations, the request for authorization must be made within the month following the date of registration to the RFC or the presentation of the notice to open a branch or establishment in the northern border area.

The following taxpayers may not apply the fiscal stimulus benefits:

1. Credit, insurance and surety institutions, general deposit warehouses, financial leasing and credit unions.

2. Those who are enlisted for carrying out non-existent operations or for improperly transmitting tax losses.

3. Taxpayers who supply personnel through labor subcontracting or are considered intermediaries under the terms of the Federal Labor Law.

4. Taxpayers who have exercised their powers of verification, without having corrected their fiscal situation.

5. Income derived from activities within the digital commerce and intangible assets, among others.


The VAT rate is reduced to 8% in the northern border region, through the application of a tax credit equivalent to 50% of the rate, to natural and legal persons who perform acts or activities subject to the alienation of goods, to the provision of independent services, and granting the temporary use or enjoyment of goods, in establishments or premises located within the aforementioned region; imports are excepted, in which case, the general rate of 16% will be applied. This, provided that the taxpayers comply with the following requirements:

1. Submit a notice of application of the fiscal stimulus no later than January 31, 2019.

2. For taxpayers who initiate activities in the northern border region, they must submit the notice of application of the stimulus along with the application for registration in the RFC.

3. Carry out the material delivery of goods or the provision of services in the northern border region.

This fiscal stimulus will not be applicable in the following cases:

1. If the sale of real estate and intangible assets or the supply of digital content is carried out as an activity.

2. If the taxpayers are listed for carrying out non-existent operations or for improperly transmitting fiscal losses.

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