On 1 July 2018, general elections were held in Mexico, and Andres Manuel Lopez Obrador, former Mexico City Mayor, was elected as President to serve a six-year term (2018 to 2024), taking office on 1 December 2018. Voters also elected 128 members of the Senate for a six-year term, and 500 Deputies for a three-year term.
On 22 March 2018, the Organisation for Economic Co-operation and Development (OECD) announced the fifth jurisdiction has deposited its instrument of ratification, acceptance, or approval of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) (the MLI). That means that the MLI will enter into force on the first day of the month following the expiration of a period of three calendar months beginning on the date of deposit of the fifth instrument of ratification, acceptance, or approval (i.e. on 1 July 2018). In this regard, it is important to note that the majority of the Double Tax Treaties (DTTs) entered into by Mexico are covered by the MLI (except for several exceptions, among others, Indonesia and Switzerland, which chose not to correspond with Mexico in marking the tax conventions as covered under the MLI, and the United States of America, which decided not to join the MLI). Regardless of the above, the modifications on the precise date the conventions covered by the MLI will be effective for Mexican tax purposes is yet unknown, as the Mexican Congress must conclude the approval process of the MLI.
On 24 April 2018, Mexico became the first country to ratify the Trans-Pacific Partnership (TPP) trade deal. The TTP includes Australia, Canada, Chile, Japan, New Zealand, Singapore, and Vietnam, among others, creating new opportunities that are expected to boost Mexico’s trade and investment with such jurisdictions.
On 15 December 2018, the Mexican Congress approved the Revenue Bill for Fiscal Year 2019, which included a significant change to the tax offset system, or netting, formerly applied in Mexico. Also, through a Presidential Decree published on 31 December 2018, income tax and value-added tax (VAT) incentives were granted for taxpayers resident of the northern border zone of Mexico, applicable for fiscal years 2019 and 2020. Finally, on 8 January 2019, through a Presidential Decree, certain tax incentives were granted to financial transactions and the financial sector in general.