IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 01 Jan 2014 | Removal date: open ended
Still in force

Import-related non-tariff measure, nes

On 31 October 2013, the Mexican Congress approved amendments to the Mexican customs, VAT and excise tax laws, which are expected to have a significant impact on customs and foreign trade operations
 
VAT tax on temporary imports
Previously, temporary importations of goods and fixed assets under article 25, section I of the VAT Law were not subject to the payment of VAT. This tax provision benefited temporary and in-bond import operations of industries as manufacture, transformation or repair, bonded warehouse for transformation (such as the one for the automotive industry) and strategic bonded warehouse.

Newly, an import VAT at the general 16% rate will have to be paid on temporary or in-bond importations. According to Ernst & Young while 'the VAT paid upon importation may be recovered through a credit or refund when the finished products incorporating the imported goods are exported or transferred via virtual operations, the recovery process may take significant time and effort.'
 
Excise tax on temporary imports
The provision exempting temporary or in-bond importations of goods from the excise tax was also eliminated. In contrast to the new VAT, the excise tax expenses may not be recuperated after re-exporting the products.

Among the affected goods are: beverages with alcohol content, beer, cigarettes, gasoline and diesel, junk food with caloric density of 275 kilocalories or more per 100 grams, such as snacks, confectionery products, chocolate and other cocoa-based products.
 
VAT in the border area
Reduced rate of VAT in the border area will be eliminated which means an increase from 11% to the standard rate of 16% on imports. The export tax, however, remains zero-rated.
 
VAT for tourists
The standard rate of 16% applies to hotel and related services to foreign tourists who attend conferences in Mexico (currently 0% VAT rated).
 
Customs broker for import and export operations

The new amendments of article 40 of the Mexican Customs Law, introduce the right and not the obligation (and thus enhance flexibility) for importers and exporters to file the customs clearance on their own behalf, in contrast to the mandatory previous use of a customs broker as their representative. 
 

Maquiladora regime
The new law taxes sales of goods located in Mexico, between a foreign resident and a maquiladora, at the regular 16% VAT rate (currently exempt). Maquiladoras will no longer withhold VAT on domestic suppliers

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

236 Cocoa, chocolate & sugar confectionery
1704 Sugar confectionery (including white chocolate), not containing cocoa.
170410 Chewing gum, whether or not sugarcoated
170490 Other
1806 Chocolate and other food preparations containing cocoa.
180610 Cocoa powder, containing added sugar or other sweetening matter
180620 Other preparations in blocks, slabs or bars weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg
180631 Filled
180632 Not filled
180690 Other
242 Wines
2204 Wine of fresh grapes, including fortified wines; grape must other than that of heading 20.09.
220410 Sparkling wine
220421 In containers holding 2 l or less
220429 Other
243 Malt liquors & malt
2203 Beer made from malt.
220300 Beer made from malt.
250 Tobacco products
2402 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.
240210 Cigars, cheroots and cigarillos, containing tobacco
240220 Cigarettes containing tobacco

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