Permanent IVA and IEPS obligations of IMMEX certified companies in Mexico
Maquiladoras that are IMMEX certified companies in Mexico must take consistent measures to ensure their continued exemption from VAT and IEPS taxes..
According to information provided earlier this year by Baker & McKenzie, a global law firm founded in Chicago with seventy-seven offices in forty-seven countries, commercial entities that become IMMEX certified companies in Mexico must comply with two permanent obligations.
These requirements pertain to Mexican IVA, or Value-Added Tax, on temporarily imported items that are inputs that are incorporated into exported finished goods, and the IEPS. The IEPS, or Impuesto Especial de Productos y Servicios (Special Tax on Products and Services) is a tax that, beginning on January 1, 2014 was imposed on products that, in some way, have been deemed to be harmful to the populace in general by the Mexican federal government. Items that are classified as such include:
- energy drinks
- soft drinks containing sugar
- junk food
Individual and corporate taxpayers that import inputs to produce the above listed items for sale abroad must include a tax on finished products that is determined by their commercial value. The tax is payable to the nation’s tax authorities on a monthly basis.
Baker & McKenzie explains the two permanent obligations that now bind IMMEX certified companies in Mexico that are related to the IVA and IEPS as such:
First Obligation – IMMEX certified companies in Mexico must, within the first thirty days of achieving certification, present a report of initial balances of the value of goods accounted for in their inventory control systems that are pending export. Companies must guarantee that payment of taxes on these items can be made, if necessary, by means of a bond or a letter of credit. Continuing reports of pending exports, and proof of the ability to pay taxes, if necessary, must be presented to taxation authorities, on an ongoing basis, every thirty days after the reporting of the beginning balance has been noted.
Second Obligation – Reports must be made regularly by IMMEX certified companies in Mexico related to items that have been exported from the country during specified time periods. The exported items that are reported on must be those that contain items imported temporarily that were reported in initial balance information. Also included in reporting is information related to imports that have been processed beginning on January 1, 2014.
Baker & McKenzie counsels IMMEX certified companies in Mexico to make certain to have an inventory control system in place that is up-to-date, as well as to be able to accurately keep account of goods that are imported and exported. The system also must be have the capacity to clearly, concisely and accurately report current balances and recent exportation information. Should IMMEX certified companies in Mexico choose not to fulfill these two permanent obligations, a loss of certification may result. This would mean the elimination of the exemption from paying both the VAT and IEPS levies.