With the reform to the Income Tax Law (ISR) that the Chamber of Deputies approved on October 14, 2026, and that the Senate is now reviewing, a company's monthly provisional payment with high deductions relative to its income rises by almost 200%, according to Expansión.
The adjustment stems from the factor applied to the profit coefficient used to calculate the advances: it goes from 1.0658 to 2.6162 for legal entities with income above 50 million pesos whose deductions reach 96.67% of their income, according to El Economista. For companies with deductions below that threshold, the 1.0658 factor raises the provisional payment by about 7%.
The reform is part of the 2027 Economic Package and also limits the amortization of tax losses to 50% of each year's profit, with an extended term from 10 to 20 years. The tax lawyers consulted expect the Senate to approve it without changes and for it to take effect on January 1, 2027. For an SME with small margins and a large payroll, the advance schedule across the 12 months of the year directly affects how much it has left for working capital and inventory.
Christian Kaye, a tax partner at Pérez-Llorca, told Expansión that the impact falls on liquidity: the company can credit the excess later, but spends a year with restricted cash flow. His firm envisions two moments for the indirect amparo. The first, against the provisional payments, when the obligation arises, around February 17, 2027. The second, against the limit on deductions, after the annual return, in 2028.
Juvenal Lobato Díaz, a professor of tax and constitutional law at UNAM, told El Economista that he sees "elements to question the constitutionality" of the reform, on grounds of tax proportionality and ability to pay, and that he considers it "difficult for there to be any favorable response from the courts." The experts consulted agree that it is advisable to pay in accordance with the law and then request a refund.
The next step is in the Senate. If the reform is approved without changes, companies with income above 50 million pesos will have until February 2027 to decide whether to litigate the first advance.
This article was written with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.
