In Mexico, numerous companies operate under trademark licensing schemes in which the licensee (not the registered owner) incurs advertising and publicity expenses to market products or services. The SAT (Tax Administration Service) has systematically rejected the deduction of such expenses, arguing that, since the licensee is not the owner of the trademark, they are not the beneficiary of the advertising, and the expense is not "strictly indispensable" (Art. 27-I of the Income Tax Law - LISR). PRODECON (Federal Taxpayer Defense Agency) challenged this criterion in its Systemic Analysis 8/2025, issued on November 28, 2025.
The SAT's argument rests on three questionable premises: (i) that the licensee is not the trademark owner; (ii) that the advertising exclusively benefits the registered owner; and (iii) that there is a lack of business purpose to assume the expense. PRODECON rejects these premises based on the LFPPI (Federal Law for the Protection of Industrial Property) and the functional criterion of the SCJN (Supreme Court of Justice of the Nation).
Articles 243 and 244 of the LFPPI are decisive: the use of the trademark by the licensee is understood to be carried out by the owner themselves, and the licensee can exercise all trademark protection actions as if they were the registered owner. This equivalence has a direct tax implication: the licensee's expenses to sustain the use of the trademark must be analyzed as if they were carried out in the same interest as those of the owner. Article 239 of the LFPPI reinforces that the terms of the contract (distribution of risks and obligations) must guide the indispensability analysis.
Regarding the standard of Art. 27-I of the LISR, the SCJN has interpreted it functionally: an expense is indispensable when, if not incurred, the company's revenue would be affected. Without advertising, there is no demand, and without demand, there is no revenue; therefore, the direct benefit is received by the licensee, not the registered owner.
To shield the deduction, the licensee must demonstrate having a contract registered with the IMPI (Mexican Institute of Industrial Property) with clauses reflecting the distribution of advertising expenses; a documented business purpose; accounting traceability (CFDI, records, Art. 28 of the Federal Tax Code - CFF); effective materialization of services (campaign reports, metrics, deliverables); and the direct impact on revenue generation, among others. When the licensor is a related party, a transfer pricing study will also be required to support the royalty rate and expense allocation (arm's length principle). Furthermore, if the providers are foreign, the applicable tax treaty and withholding obligations must be analyzed.
Systemic Analysis 8/2025 is a relevant precedent for ongoing litigation and pressures the SAT to review its criterion. However, legal reasoning alone is not enough: the deduction will only be sustained with a solid documentary file. In this scenario, a comprehensive IP-tax analysis is not optional but decisive: properly structuring the license agreement, while simultaneously addressing the LFPPI, the indispensability requirement of the LISR, and transfer pricing standards, is the necessary condition to operate with legal certainty. Companies that treat these elements in isolation will remain exposed; those that integrate them will solidly sustain their deductions before an increasingly specialized tax authority.
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