IETU Benefits for Maquiladoras Extended | Plante Moran
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Mexican President Calderon Extends IETU Benefits for Maquiladoras

Mexican President Calderon signed a decree on October 11, 2011 extending the Mexican minimum or flat tax (IETU) reduction program for maquiladora operations. This tax reduction program, commonly known as the Calderon decree, was originally put into place in November 2007. It was set to expire on December 31, 2011, but it is now extended through December 31, 2013.

The Decree allows qualifying companies to reduce their combined income tax/ IETU liability to not more than 17.5% of their maquiladora income base. Without this benefit many maquiladora operations would experience a significant increase in their Mexican tax liability. As such, this extension is significant news for the Mexican maquiladora industry.

It is also important to note that the extension also includes several requirements that a maquiladora must meet to take advantage of the benefits of the Decree. However, these requirements are items that are generally required under other sections of the Mexican law or supporting regulations.

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