On March 4th, 2025, an Initiative with a Draft Decree submitted to the Federal Congress, proposing an amendment to the Income Tax Law regarding the taxation of large fortunes (the “Initiative”), was published in the Mexico City Parliamentary Gazette.
Objective of the Initiative
Although the Initiative was presented as a “Tax to Large Fortunes”, from an analysis of the draft published in Mexico City Gazette, reveals that the proposed amendment establishes a tax on donations and inheritances or bequest exceeding $15’000,000.00 pesos.
Proposed Amendments
The proposed amendment aims to amend articles 93, section XXIII, 130, section VI, and 132, as well as to add article 132 BIS to the Income Tax Law.
For these purposes, it is proposed to limit the exemption applicable to the receipt of donations to a maximum amount of $15’000,000.00 pesos, in which case any donations exceeding this threshold would be subject to Income Tax.
On the other hand, amounts received through inherence or bequest are considered as income from the acquisition of goods when exceeding a total value of $15,000,000.00 pesos.
Considering the aforementioned, it is proposed that taxpayers who receive donations or income from the acquisition of goods through inherence and bequests make a provisional payment toward the annual tax, this payment would be calculated by applying the corresponding rates to the excess amount received, without any deduction, within the 15 days of receiving the income, taking into account the progressive rates mentioned below:
|
Rate |
Income Received |
| 10% on the amount exceeding the total value. | From $15’000,001.00 to $60’000,000.00 pesos. |
| 20% on the amount exceeding the limit indicated in the previous threshold. | From $60’000,001.00 to $150’,000,000.99. |
| 30% on the amount exceeding the limit indicated in the previous threshold. | From $150’000,001.00 or more. |
Justification Mentioned in the Initiative
The justification for this amendment initiative, highlights the need to strengthen tax collection in Mexico, since, compared to other member countries of the Organization for Economic Cooperation and Development and other Latin American Countries, Mexico’s tax revenue as a proportion of its Gross Domestic Product is significantly lower.
Accordingly, the Initiative argues that it aims to enhance tax equity and reduce wealth through a “proportional tax applied to those who earn more”.
Additionally, while the proposed amendment to the Income Tax Law focuses on donations, inheritances or bequests, the explanatory notes refer to a study conducted by Oxfam Mexico, which recommends some tax measures.
Such as, the establishment of a progressive federal tax on large fortunes; the promotion of deep, progressive, and transparent tax reforms; the evaluation, examination, and elimination of tax revenue waivers and other tax privileges within tax codes, such as exemptions, deductions, or discounts; prioritizing public investment in social infrastructure, such as health and educational; and, encouraging participation in regional tax discussions to form a Latin American tax group.
Other Considerations
Since the Income Tax Law is a matter of Federal jurisdiction, the Mexico City legislature does not have the authority to amend it directly; consequently, the initiative was submitted to the Federal Congress for review.
Our Tax Practice team continues to monitor any updates related to this Initiative and assess its potential implications. Additionally, we are prepared to provide timely information and specialized advisory services as needed.
