The Mexican federal government created the IMMEX Program to promote foreign investment in Mexico. It allows companies to temporarily import goods for manufacturing, transformation, or repair for subsequent export or return abroad. This program grants access to import duties referral and a value-added tax credit program. However, companies are closely monitored and violations incur strict sanctions.
Various regulations and laws govern the IMMEX program, including:
The IMMEX decree contains detailed information about:
The document and its Annexes clearly define:
The Customs Law governs the import and export of goods in Mexico. It covers:
Overall, understanding the scope and requirements is crucial for IMMEX compliance. Articles 108 through 112 are particularly relevant to IMMEX, detailing permitted imports, storage periods, returns, virtual transfers, waste, and scrap.
The Mexican Tax Administration Service, or “SAT”, has published a set of rules that compile general legal provisions for foreign trade and customs operations. Specifically, their aim is to facilitate compliance with the responsibilities outlined in the Mexican customs law and other laws. These responsibilities include:
The rules also outline the requirements for value-added tax (VAT) and other customs certifications for IMMEX.
The rules consist of 30 Annexes which provide more detailed information about customs and foreign trade operations. Specifically, Annex 24 provides guidelines for compliance with inventory controls for IMMEX. Annex 30 provides guidelines for controlling and administering VAT for IMMEX.
This law regulates foreign trade operations and other tasks related to the competitiveness of the MX economy. Article 5 sets forth that the Minister of Economy is the office of the federal government with the authority to create promotion and export programs. This includes the legal provisions governing such programs. Also, Article 91 states the Minister of Economy in coordination with other departments shall establish the promotion programs by means of decrees.
The Minister of Economy provides clarity to the requirements for foreign trade operations and facilitates compliance. Specifically, this includes information about:
Title 3 contains important information for IMMEX, outlining the requirements and process for applying to the program. It covers updates, extension, sub-manufacturers, modality changes, IMMEX cancellations, PROSEC, among others.
For IMMEX companies, this means complying with Mexico’s tax rules, including registration and recordkeeping. Article 103 of the code declares certain IMMEX actions as contraband, carrying hefty fines and even jail time.
As a general rule, goods imported by IMMEX are subject to a 16% VAT. Companies can apply for a credit line from the tax authority under VAT Certification (A, AA, or AAA). Articles 25 through 28-A of this law provide the details.
Articles 181 through 183 of the law address the possibility of establishing a permanent establishment in Mexico for foreign companies operating under an IMMEX. This can apply, even for companies without a physical presence.
Article 2.5 of this treaty pertains to drawback and duty deferral programs. It is crucial for companies relocating their operations to Mexico in search of greater proximity to the U.S. and Canada. It is particularly important for those using components, raw materials, inputs, or parts originating from Asia.
IMMEX gives companies the power to postpone import duties for temporarily imported goods. Timely exports, returns and compliance are keys to avoiding customs charges. However, USMCA benefits don’t happen automatically. If the initial goods come from outside of the USMCA, even if the final product qualifies for USMCA export, import duties will still be owed on those non-originating goods.
Written with references from: https://www.jdsupra.com/legalnews/hot-topics-in-international-trade-1519482/