Business · Companies · 1 hr ago
Mexico auto dealers seek tax decree, warn 1,000 agencies could close
Mexico’s auto dealers association says a tax change puts 1,000 dealerships and 70,000 jobs at risk.
The Mexican Association of Automotive Distributors has asked President Claudia Sheinbaum to issue a decree recognizing the industry’s business model.
The change limits deductible expenses to 96.6% and increases advance income-tax payments.
Dealers say their pre-tax profit margins are usually only 1% to 3%, so they could owe tax on income they did not actually earn.
The association says the rule could push dealerships to close, adding pressure to an industry already affected by tariffs and weaker vehicle production and exports.
A weaker dealer network could also undermine plans to produce more vehicles in Mexico for local buyers.
The association is seeking action from the president, but no response or next step is stated.
Mexico’s auto dealers’ association warned that changes to the income tax law could put 1,000 dealerships and 70,000 jobs at risk.
The Mexican Association of Automotive Dealers (AMDA) asked President Claudia Sheinbaum to issue a decree recognizing the sector’s low-margin business model.
The law limits deductible expenses to 96.6%, while dealers also face higher provisional tax payments and the effects of tariffs.
AMDA said dealerships typically earn pre-tax margins of 1% to 3%, and argued the deduction limit could result in tax being charged on profits they did not make.
- Who
- The Mexican Association of Automotive Dealers (AMDA), led by executive president Guillermo Rosales Zárate.
- What
- AMDA asked President Claudia Sheinbaum for a decree to reduce the impact of income tax law changes. It warned that 1,000 dealerships and 70,000 jobs could be at risk.
- When
- The warning was reported on October 29, 2026.
- Where
- Mexico.
- Why
- The law limits expense deductions to 96.6% and increases provisional tax payments. AMDA said the changes could disproportionately affect dealerships with low profit margins.
AMDA
Government
Tax changes
AMDA
AMDA says the deduction limit could threaten dealerships and jobs, despite their low margins and payment of taxes.
Government
The government justified the initiative as a way to prevent tax abuses, including the use of false invoices.
The legislature approved an amendment limiting deductible expenses under the income tax law to 96.6%.
AMDA asked President Claudia Sheinbaum for a decree and warned that 1,000 dealerships and 70,000 jobs were at risk.
- Dealerships at risk
- 1,000
- Jobs at risk
- 70,000
- Maximum expense deduction
- 96.6%
- Dealership pre-tax profit margin
- 1% to 3%
- Date reported
- October 29, 2026
1 source
What people are saying
We believe there is an alternative for the Executive to recognize activities like ours, with low income margins and not because of abuse, but as part of the business model, allowing us to soften the impact of this amendment to the Income Tax Law
The Executive should consider in depth not creating an impact that leads to the closure of businesses like ours, which do not use a tax abuse scheme