New rules to be applied to IMMEX program by Mexico’s Tax Administration Service.

During 2014, Mexico devised a plan to ensure that businesses claiming exemption from the payment of a sixteen percent value-added tax (VAT) on temporary imports actually engage in export activities necessary to receive such fiscal consideration.

Mexican IMMEX certification is available to those companies that can verify that eighty percent of their manufactured product is exported. Beyond the eighty percent export provision, another major requirement of the Mexican IMMEX certification program is proof of the ability to maintain an up-to-date control of the inventory of temporarily imported goods that will be incorporated into product or products, at all times, that will be shipped beyond Mexican borders.

Mexico’s Tax Administration Service (SAT) has stipulated that inventories kept of these components, raw materials, equipment and other goods, must be accounted for in accord with a Mexican law known as “Annex 24.” Annex 24 requires that inventory control in maquiladoras that participate in the Mexican IMMEX certification program must be kept via an automated system, through which they provide the SAT with details on bills of materials, a listing of products manufactured, as well as information on finished product exported by the certified company.

Francisco Javier Anaya, adjunct director of Export Controls of the Secretariat of the Economy, recently announced that, in less than a month, government authorities will be announcing changes to the Mexican IMMEX certification program. These changes will be implemented in order to ensure that companies claiming exemption from the payment of value-added tax on temporary imports are doing so legitimately.

In the future, companies that seek to be approved for participation in the Mexican IMMEX certification program must:

  • be listed in a national registry of the industry to which it belongs;
  • present a “investment program,’ or basic assumptions related to the business, such as: number of workers forecasted to be hired, estimated financial results, information on major clients and details concerning the length of agreements with aforementioned clients

Going forward, companies that have already been recognized by the Mexican IMMEX certification program will be affected by the SAT’s decision to:

  • increase the number of imported items that are deemed to be “sensitive.” Items in this category will experience increased monitoring and reporting requirements, and include materials and items such as: aluminum, mineral waste products, and tobacco, for example;
  • increase the rigor with which tax obligation requirements are monitored.

Another announcement that has been made recently, more specifically on January 29 of this year, is that companies participating in the Mexican IMMEX certification program are now permitted to make corrections to their Annex 31 inventory balance reports.