Mexico R&D incentive program

In 2009, the Mexican government implemented new research and development (R&D) incentive programs that directly refund a percentage of expenses incurred by companies involved in R&D. The National Science and Technology Advancement Agency (CONACYT) administers the filing procedures for the incentive programs. The budget allocated MX$2 billion to fund R&D incentives in 2012; in 2011, the budget allocated MX$2.5 billion.

As the program has evolved, changes have been made to the evaluation procedures and the allocation of funds. Filed projects are now evaluated by state and local jurisdictions and funds are allocated based on the technical value of the project and local jurisdiction’s priorities.

Projects filed in 2012 that are a continuation, improvement, or a development of a project that received the incentive in 2009, 2010, or 2011 will receive additional priority. The following programs are in place to incentivize R&D investment:

INNOVATEC – For large companies

Program for large companies: The economic incentive is equal to 22 percent of qualifying expenses incurred in national territory. The maximum amount awarded per company is MX$36 million. Large companies are those business with 250 or more employees and greater than MX$250 million in annual sales.

INNOVAPYME – For small and medium companies

Program for small and medium companies: The economic incentive is equal to 25 percent of qualifying expenses incurred in national territory. The maximum amount awarded per company is MX$21 million. Small and medium companies are those with up to 250 employees and up to MX$250 million in annual sales.

PROINNOVA – Priority program open to all companies

This program is for projects developed in collaboration with research centers or institutions of higher education. The economic incentive is equal to 50 to 75 percent of qualifying expenses incurred in national territory. This program receives priority over the other two programs in the funds allocation formula.

Qualifying expenses
  • Gross wages of staff directly involved in R&D
  • Investment in equipment, software, pilot plants, and prototypes directly related to R&D
  • Costs related to patents or copyrights
  • Consultant and expert fees directly related to R&D
  • General and operating expenses directly related to R&D
  • Studies of technology analysis such as benchmarking
  • Tuition reimbursement for master and doctorate degrees for personnel directly related to R&D
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Baker Tilly’s team of experienced R&D professionals and their multilingual talents have helped clients obtain significant R&D tax credits and incentives in foreign jurisdictions. If you would like to further discuss this opportunity, your Baker Tilly advisor or connect with us at tax@bakertilly.com.