In brief
On 1 April 2024 new provisions contained in the Financial Code for the State of Mexico will become effective, with regard to the following taxes:
- Ecological Tax on Waste Disposal, Confinement and Storage (“The Waste Tax“);
- Tax on Pollutant Emissions to Water (“Water Tax“).
There are also new rates applicable to the Tax on Pollutant Air Emissions (“Air Emissions Tax“), in force since 2022.
In more detail
Waste Tax
This tax applies to any generators of non-hazardous urban waste that, on their own or through intermediaries, dispose of such waste in landfills, collection centers and other disposal sites within the State of Mexico, if the waste release causes an adverse effect on the environment, the ecological balance or public health.
Payment will be determined by taking into account the monthly amount in metric tons of wastes that are sent to disposal sites, whether authorized or not.
The tax rate will be equal to MXN 100 per metric ton or a proportion thereof, on the basis of the fraction -per ton- of disposed waste.
It is important to mention that the tax will not be applied to that portion of the waste that is destined to be reused, recycled, co-processed or valued, activity that should be demonstrated within six months (we assume that from the date of generation, although this is not clear).
Water Tax
This tax must be paid by individuals or entities that carry out profitable activities, regardless of their legal, financial or fiscal nature or address, that under any title, on their own or through intermediaries, deposit, discard or discharge pollutants into water bodies located in the State as a result of their activities.
The tax will be determined taking into account the quantity in cubic meters of water affected by pollutant substances that is emitted or discharged, measured in milligrams per liter, from any discharge outtake.
Water samples must be obtained by consulting the pollutant tables contained in Mexican Official Standard NOM-001-SEMARNAT-2021 (“NOM-001“), that establishes maximum allowable pollutant limits for wastewater discharged into federal land or water, or on the basis of any other standard that may be in force during the fiscal year in question.
The tax will be payable as soon as water is deposited or discharged, by applying the following rates (on the basis of NOM-001):
- Basic Pollutants: MXN 108 per cubic meter or a proportion thereof, on the basis of the fraction affected by the pollutants;
- Metals and Cyanides: MXN 141 per cubic meter or a proportion thereof, on the basis of the fraction affected by the pollutants.
If the water has been contaminated by two or more substances, the rate must be paid for each one.
Air Emissions Tax
This tax must be paid by individuals or entities that operate stationary air emission sources in the State, and that emit pollutant gases into the atmosphere, if the aggregate of emissions containing carbon dioxide, methane and nitrous oxide, whether individually or a mixture thereof, equal or surpass one metric ton of carbon dioxide equivalent (t CO2e) a month.
A stationary source is any installation located in a specific location on a permanent basis that carries out an industrial, commercial, service or any other activity that generates pollutant air emissions.
An emission consists in the direct discharge into the atmosphere of carbon dioxide, methane and nitrous oxide, whether individually or a mixture thereof.
Discharges will be calculated in accordance with the methodology used to prepare an Operating License application or Yearly Integral or Operating Report (Cédula de Operación Anual o Integral).
The applicable tax rate is MXN 58 per metric ton or a proportion thereof, on the basis of the fraction -per ton- of CO2e.
Possible legal challenges
Although each individual case would have to be analyzed, we consider that there are elements to contest these taxes through an “Amparo” procedure (before a federal court). We would be happy to elaborate on the strategy to be followed.
Please reach out to us if you have any questions.
