Accounting services for IMMEX and manufacturing plants in Tijuana Baja California México


		Contadores Públicos - Public Accountants

Manufacturing regime or IMMEX program in Mexico

The IMMEX regime is a tool or program designed by the Mexican Secretary of Economy "SE" in order grant Mexico a competitive edge on today's global market , main purpose is to bring foreign investment to the country, improve the industry and develop intellectual capital. The program allows trade of goods and services between resident and a foreign enterprises, the key incentives basically consists in significantly reducing income tax, 0% VAT on exports, refundable or creditable VAT paid to resident vendors and duty-free on some imports of equipment and components.

The Organization for Economic and Commerce Development "OECD" has issued several Transfer pricing guidelines to help determine tax liability in each jurisdiction and avoid double taxation, the arm's length principal is always present. There are several options in Mexico's Income Tax Law (MITL) for transfer pricing methods, Safe Harbor is a relative simple option to consider.

Industria Manufacturera, Maquiladora y de Servicios de Exportación (IMMEX)

OCDE

SAT

Aduanas

IMMEX
decree

Secretary
of Economy

INEGI

There are many activities available under the IMMEX program, they can be narrowed into the following areas:
Manufacturing, assembling, repairing, servicing and processing of goods.
basics steps to register and keep the IMMEX program active:
Annual compromise to export 500,000 dollars, or bill exports of at least 10% of its total billing. Have digital signature (FIEL) Be current in fiscal obligations Keep updated fiscal address where operations or warehousing occur
Tax benefits of the IMMEX regime
No PE for foreign enterprise Duty - free on most equipment & components to be imported for the program No import VAT as a result of conducting a temporary importation. Income tax "ISR" reduction of over 15% "IETU" Flat tax credit 0% VAT on foreign sales Refundable or creditable VAT against some direct or indirect taxes ( ex. withholding income tax over wages)
Permanent Establishment (PE)
It is very easy to trigger the existence of a PE in Mexico, and with it direct and indirect taxes and other fiscal obligations, but under the IMMEX program the foreign enterprise can avoid exposure to PE in Mexico when establishing the correct legal structure, complying with Mexico's transfer pricing rules and following all relative fiscal obligations attached to the IMMEX program.
Transfer pricing guidelines according to MITL
Safe Harbor is the option in article 216-Bis of the Mexican Income Tax Law (MITL) allowing companies to operate under the IMMEX program and comply with the arms lenght's principal when they report a taxable profit representing at least the highest amount resulting from: A) 6.9% over assets used in the maquila program * B) 6.5% over costs and operating expenses determined by FIN* Rates apply for Mexico and foreign residents Transfer pricing methodology in accordance to MITL: Comparable price Resale price Cost plus Profit split Residual profit split Transactional net margin
Some fiscal obligations:
Monthly taxes: SAT ISR, IETU & IVA, plus any withholding tax that might apply ( professional fees, leasing of space, income tax over wages ) INEGI Statistic report Social Security IMSS, RCV, INFONAVIT ( last two are due each two months) State Quarterly or monthly state 1.8 tax over payroll Annual reports SAT Income tax annual report Informative annual report over wages related parts Withholding taxes DIEMSE Secretary of economy Foraging investment report Import & export informative declaration

Disclaimer: This web page is for informational purposes only. This document is not providing legal advice to the reader or establishing a professional relationship between author and reader. Although the information provided herein is believed to be accurate as of the date prepared.

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