Mexico Chamber approves tighter corporate deduction and loss rules for 2027

The Chamber approved the proposal by 322 votes to 115 and sent it to the Senate. The text is not yet enacted. Its commencement clause would bring the decree into force on 1 January 2027 only if the remaining legislative and promulgation stages are completed.^[1][2]

A new annual deduction control

The proposal would add Chapter X, articles 78-A to 78-F, for Mexican-resident legal entities whose cumulative income exceeds MXN50 million and which calculate taxable profit under article 9. Article 78-B would initially allow only 99% of authorised deductions where those deductions do not exceed 96.67% of cumulative income; where they exceed that threshold, the deduction would be capped at 96.67% of cumulative income.^[1]

Amounts deferred by this control could be indexed and used during the following 20 fiscal years, subject to the same annual limit. They would not be tax losses and generally could not transfer in a merger or division. Article 78-C would separately cap carried-forward tax losses at 50% of taxable profit remaining after the article 78-B control, unless the available loss is smaller; article 78-D would apply a corresponding restriction in provisional payments.^[1]

Targeted exclusions and anti-avoidance rules

Specified taxpayers would be excluded, including coordinated transport businesses, qualifying agricultural activities, certain maquila operations, businesses in insolvency proceedings, insurers and some taxpayers using listed investment or innovation incentives. Newly registered businesses could obtain a five-year exclusion, but the proposal would deny it where an existing business is effectively transferred to a new entity with common ownership or control.^[1]

Interest and cross-border deductions tighten

The reform would reduce the article 28(XXXII) net-interest ceiling from the current 30% to 20% of adjusted taxable profit. It would also require payments abroad to have been paid to the counterparty and the relevant withholding remitted before deduction under article 27(V). These changes are directly relevant to multinational groups with leveraged Mexican subsidiaries or cross-border service and royalty flows.^[1][3]

Optional group regime would end

The proposal would repeal articles 59 to 71, ending the optional regime for groups of companies. Groups using it at 31 December 2026 would have to leave from 1 January 2027 and follow transitional rules for deferred tax. Tax teams should model the combined cash-tax effect of the deduction, loss and interest constraints rather than reviewing each change in isolation, while tracking the Senate and promulgation stages.^[1][3]