Mexico importation costs and Mexican duty rates under the maquiladora program (Part 2)
Mark Earley, the executive vice president and chief financial officer of the Tecma Group of Companies gives a synopsis of things to take into account when calculating Mexico importation costs and Mexican duty rates.
Now that we have our value. We have our universal harmonized tariff schedule number for determination of Mexico importation costs. We go in and determine the duty rate. What we are trying to look for is the most preferential rate that is utilized in order to minimize our duties. That is element number one.
Element number two is that of the value-added-tax (VAT). Under the IMMEX, or maquiladora program, value-added-taxes on machinery and equipment, or any other materials, that are imported into Mexico are taxed at zero percent. Then again, we must remember, that value-added tax is at sixteen percent on the border, and, in the interior, the VAT is eleven percent. For importations into Mexico, under the IMMEX program, the value-added-tax rate is zero.
The last item, usually a minimal one, is the user fee assessed by Mexican Customs. There is a user fee for any materials brought into Mexico which is usually levied at MX $250 (Pesos) per shipment. Then there is the user fee that is associated with machinery and equipment imported into Mexico. For machinery and equipment, any imported item under US $10,000.00 will be assessed a fee of MX $250 (Pesos). If the value of the machine or equipment is greater than US $10,000.00, then the item(s) is/are assessed a user fee calculated at .167% of the value of the machine or equipment in question. These are the three elements that we look at when we discuss Mexico importation costs.
To summarize, they are:
- Duties (most likely you will utilize an external expert to determine what they are)
- Value-Added-Tax (which is generally zero under the IMMEX program
- Customs Fee
Thank you very much for your time today.
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