The Mexican Congress is proposing to re-establish a reduced VAT rate in the border states of Baja California, Baja California Sur, Quintana Roo, and in the municipalities of Caborca and Cananea of the state of Sonora. The new proposed rate for those regions would be 8%, applicable to transactions of goods or services made by inhabitants of any of the above regions. It is worth mentioning that until 2014, the Mexican government applied a reduced rate of 11% in the same regions.
The current project is being considered at the Mexican Senate and if approved at the Chamber of Representatives as it is designed, the new regime would become effective immediately. For further detail, please see: http://www.pan.senado.gob.mx/2018/09/del-sen-ismael-garcia-cabeza-de-vaca-del-grupo-parlamentario-del-pan-con-proyecto-de-decreto-por-el-que-se-reforma-y-adiciona-la-ley-del-impuesto-al-valor-agregado/.
