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The R&D Tax Credit proposed by Mexico is an incremental 30% reward., applied to R&D expenses
exceeding the average of the 3 previous years, in the limit of 50 million pesos (approx. 2 Million

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Mexico Incremental
Tax Credit

30 % ( QEN – (QEN-1 + QEN-2 + QEN-3) / 3 )

QE = Qualifying Expenses

N = year of R&D expenses

Benefit Overview

Only increased R&D expenses will open the benefit for the tax credit. The average of the 3 previous years set the reference of standard R&D expenditures for the company. The benefit is then computed by the difference of the investments incurred in the concerned year to that average reference.
Eligible Claim Period

For each year, companies must present technical / scientific evidence, administrative documents and computations before end of February. This upfront approval is requested before proceeding to the use of the credit on the tax liability.
Historical Background

In 2020 the Mexican government and the National Council of Technology & Science (CONACYT) has decided a stimulus for Research and Innovation.
Ease of Application

To be approved, the claim needs: increasing expenses, strong innovation evidence, pe-approval form authorities.
Following the approval, companies must follow a guideline for reporting achievements of the projects.
Regulating Body Policies

National Council of Technology & Science (CONACYT) supervises the incentive.
Eligible Costs Most expenses engaged in R&D are included, such as salaries, prototyping and experimenting costs, tools, equipment, machinery, materials, and outsourced R&D, especially with public bodies (universities, R&D centres)
Issues to Consider Strong Innovation and R&D indicators are expected, such as IP and cooperation with research organisms.