Mexico Chamber of Deputies approves ISR tax reform

Mexico’s Chamber of Deputies has approved a reform to the Income Tax Law (ISR) as part of the 2027 Fiscal Miscellaneous package. The measure passed with 322 votes in favor and 115 against, supported by the Morena, PT, and PVEM parties.

Legislators rejected several amendments proposed by opposition parties. These included proposals from the PAN to exempt Christmas bonuses (aguinaldo) from income tax and to remove taxes on overtime pay. The PAN argued these changes would benefit household economies, while proponents of the rejection cited a potential cost of approximately 20 billion pesos.

The reform includes adjustments to the Simplified Trust Regime (Resico) and imposes new limits on deductions for large corporations. Opposition members from the PRI and PAN criticized the move, arguing that the reform targets compliant taxpayers rather than effectively combating tax evasion. The PRI warned that limiting deductions for operational costs—such as fuel and maintenance—could force businesses to pay taxes on fictitious profits, potentially harming investment and employment.