Importing into Mexico: A Comprehensive Guide for 2024

Maximize Your Manufacturing Potential with IMMEX Programm and VAT Certification

By Ignacio Javier Yá?ez Porcayo | June 24th, 2024 | #ijyp

Importing goods into Mexico can be a complex process, involving multiple regulatory bodies and a variety of requirements. This guide provides an overview of the key steps and considerations for businesses looking to import into Mexico in 2024, including the necessary permits, applicable taxes, the IMMEX program benefits and the VAT Certification.

Regulatory Authorities

Import and export transactions in Mexico are primarily overseen by the following authorities:

- National Customs Agency of Mexico (ANAM )

- Tax Service Administration (SAT )

- Ministry of Economy (SE )

These entities regulate the procedures and compliance requirements for importing goods into the country.

Other authorities may be involved, depending on the merchandise that is intended to be introduced into Mexico, for example, in the case of medical devices, COFEPRIS (Federal Commission for the Protection against Sanitary Risks) will be involved.

Import Licenses

Before engaging in cross-border trade, importers must register with the SAT to obtain an import permit known as the Padrón de Importadores . The registration process typically takes up to six business days and does not require additional documentation beyond the initial application.

For specific sectors, importers may need to obtain a specialized import license (Padrón de Importadores de Sectores Específicos ). This requirement applies to sectors such as chemicals, firearms, textiles, and automotive parts, with a resolution time of up to ten business days.

Prohibited and Restricted Items

While outright prohibitions on imports and exports are rare, many products are regulated and require special permits. Goods related to health, safety, and national security often fall under this category. Importers should conduct a thorough analysis of the regulatory requirements for their specific products, especially if intended for consumption within Mexico.

Taxes and Customs Duties

Importing into Mexico involves several taxes and customs duties:

1. General Import Tax (Impuesto General de Importación – IGI ): This non-recoverable tax is based on the customs value of goods, including cost, insurance, and freight (CIF). The average rate is approximately 7%.

2. Processing Customs Fee (Derecho de Trámite Aduanero -DTA): Applied to the processing of imported goods.

3. Value Added Tax (VAT): Typically applied to most imports.

Additional taxes, such as the Special Tax on Production and Services (IEPS) and the Tax on New Automobiles (ISAN), may apply to specific categories like food and vehicles.

IMMEX Program and VAT Certification

The IMMEX (Maquiladora, Manufacturing, and Export Services) program is a key initiative by the Mexican government designed to boost the country's export economy. This program allows manufacturing companies to temporarily import goods and materials needed for the production of export goods without paying general import taxe, which significantly reduces operational costs.

The VAT Certification complements the IMMEX program by providing a mechanism for companies to defer the Value Added Tax (VAT) on their temporary imports through a tax credit that the SAT authorizes once said Certification is obtained. This certification not only helps in cash flow management by avoiding upfront VAT payments, but also streamlines the overall import process, making it more efficient and profitable.

So, by obtaining the IMMEX authorization and VAT Certification, companies can leverage substantial tax benefits, optimize their supply chain, and enhance their competitive edge in the global market.

The IMMEX program is divided into several categories:

1. Manufacturing: For companies transforming or manufacturing goods for export.
2. Services: For companies providing services to manufacturing entities.
3. Holding Company: For certified holding companies with multiple subsidiaries.
4. Shelter: For foreign companies providing technology and equipment without being Mexican residents for tax purposes.
5. Outsourcing: For companies without production facilities, relying on third parties for manufacturing.

Fixed Assets and Raw Materials

Under the IMMEX program, machinery and equipment can be temporarily imported; however, in these cases, Companies must be careful, since the general import tax must be paid, although its tariff is commonly exempt.

On the other hand, raw materials, parts or components can be imported deferring the general import tax, as long as they meet the program requirements. However, VAT must be paid unless the company has a VAT certificate or bond. Temporary imports must not be sold or delivered within Mexico unless they are reclassified as permanent imports, incurring the payment of all applicable taxes and duties.

Sensitive merchandise, such as sugar, iron, steel, textiles, aluminum, and tobacco, require specific compliance measures and are listed in Annex II of the IMMEX Decree. These requirements must be renewed every four months if VAT certification is not obtained.

Requirements for IMMEX Authorization

To qualify for the IMMEX program, companies must submit:

1. A detailed description of the production process and plant capacity.
2. Commercial descriptions and tariff classifications of raw materials and machinery.
3. Commitment to annual foreign sales exceeding $500,000 or exporting at least 10% of total turnover.
4. Legal documentation, including property ownership or lease agreements.
5. Evidence of an exportation project, such as contracts and purchase orders.
6. Among others.

VAT Certification

The VAT certification provides a credit line from the government for VAT on temporary imports. To obtain certification, companies must:

1. Maintain inventory control per Annex 24.
2. Have returned at least 60% of temporary imports in the previous year.
3. Have a positive tax compliance record.
4. Employ at least ten personnel registered with social security.
5. Carry out the payment of rights to the government ($2,000 USD approx) - initially and annually -.
6. Among others.

For sensitive merchandise, companies must demonstrate compliance with additional regulations and have a history of operations under the IMMEX program.

Timeline for Authorization

The timeline for obtaining IMMEX and VAT certification involves several stages, including application, additional documentation requirements, and final authorization, taking up to 60 business days for VAT certification.

For more detailed assistance and to ensure compliance with all regulations, companies are advised to consult with legal experts specializing in Mexican import laws.

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For further inquiries or personalized guidance, please contact me.

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Disclaimer: The information provided in this guide is for informational purposes only and should not be considered legal advice. Please consult a legal professional for specific legal guidance.

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