Mexico’s Tax Administration Service is Accepting Requests to Obtain VAT and STPS Certification

Mexico’s 2013 Tax Reform eliminated the exemptions for Value Added Tax (VAT) and Special Tax on Production and Services (STPS) on the temporary import of goods by the maquila industry. It also increased the VAT on border states from 11% to 16%. Payment of VAT and STPS on temporary imports will begin on January 1, 2015.

To compensate the effects of this reform, certain companies that are up to date in the payment of their tax and customs obligations will be able to obtain VAT and STPS certification under the A, AA and AAA modes.

The benefits of obtaining the certification include, among others, a VAT and STPS tax credit of the amounts that should be paid for the temporary import of goods. AA and AAA modes have additional benefits, such as a longer certification term. Certified companies may also obtain a return of any additional VAT payment.

From April 1 through April 30, the Tax Administration Service will be accepting certification requests from certified Authorized Economic Operators under the New Scheme for Authorized Companies and from companies in the automotive industry.

All other maquila companies may file their requests within a period that varies according to their tax domicile:

– For companies located in the North Pacific area, within the jurisdiction of the Baja California office, the period will be from April 15 through May 15;

– For companies in the Northeast, within the jurisdiction of the Nuevo Leon office, from June 3 through July 3;

– For companies in the North Central area, within the jurisdiction of the Coahuila office, from July 7 through August 7;

– For companies in Central area, within the jurisdiction of the Federal District office, from August 7 through September 8; and

– For companies in the West and South area, within the jurisdiction of the Jalisco and Veracruz offices, from September 22 through October 22.

Should any maquila company fail to file its request within the established period, they may file it at any time, but will risk delays in obtaining the certification and tax credit.

For questions and assistance with the VAT and STPS certification process, IMMEX, and related issues and planning strategies for a maquila operation in Mexico, please contact Counsel, Brenda Cisneros Vilchis at bcisneros@yormicklaw.com or Managing Attorney, Jon P. Yormick, at jon@yormicklaw.comor by calling +1.866.967.6425 (Toll free in Canada & U.S.), Office: +1.216.928.3474, or Mobile: +1.216.269.5138.

Firm’s Mexican Colleague Will Speak to Bar Association in Buffalo

On May 1, Mexican attorney, Enrique Acosta Sáenz, will be in Buffalo  for a presentation at the Bar Association of Erie County, in downtown Buffalo.   Mr. Acosta is the Founding & Managing Partner of Boutique Legal Internacional, an affiliate of the Law Offices of Jon P. Yormick Co. LPA with offices in Buffalo and Cleveland.  Boutique Legal Internacional has offices in Chihuahua and Juarez, Mexico.

“After working with Enrique on client matters for the past 3 years, I am pleased we will have this opportunity to meet with clients, business groups, and other attorneys in the region to learn more about doing business in Mexico,” stated Yormick.  “Mexico is being discovered and ‘re-discovered’ by many companies as a market, strong manufacturing country, and recognized as a growing economy, mentioned as part of the TIMPs – Turkey, Indonesia, Mexico, and Philippines – and the MISTs – Mexico, Indonesia, South Korea, and Turkey,” Yormick added.

Mr. Acosta’s presentation is entitled Minimizing Duties and Taxes: A Mexican Update.  He will discuss strategies companies exporting to Mexico and those operating in Mexico can employ that minimize duty and tax liabilities to successfully compete in this important NAFTA market.

The program is presented by the International Law Committee, as part of the BAEC’s Noontime Lecture Series, but will begin at the special time of 4:00 pm.  The presentation is open to in-house and private practice attorneys, executives and managers of the international business community, and students.  To register, please visit http://bit.ly/112oSEC.

U.S. Supreme Court Rules on NAFTA Provision dealing with Mexican Trucks

On June 7th, 2004, the U.S. Supreme Court made a decision in United States v. Public Citizen, 03-358, to allow Mexican truckers more access to U.S. highways. The high court ruled unanimously that the Bush administration can open U.S. roadways to Mexican Trucks as soon as it wishes.

Monday’s court ruling upheld a provision of the North American Free Trade Agreement (NAFTA) that gives U.S., Mexican and Canadian trucks permission to drive freely on each other’s roads. NAFTA, which took effect in 1994, required the U.S. to allow Mexican trucks access to all border-state roads starting in 1995 and to drive anywhere in the country by January 2000.

The provision regarding Mexican trucks has been tied up in court with the 9th Circuit Court of Appeals since January. It was ruled that the Bush Administration would have to do an environmental study before opening roads to Mexican trucks under NAFTA because of the possible violation of federal environmental laws. Generally motor carriers and drivers from Mexico must comply with U.S. licensing, insurance and environmental standards. However, Monday’s Supreme Court ruling overturned an appeals court decision that said the trucks must meet U.S. environmental standards to cross the border. The Supreme Court stated that the lower court misapplied the nation’s environmental laws and constrained the president’s discretion to conduct foreign affairs.

Under NAFTA, Mexican trucks and drivers can travel between Mexico and the United States, but cannot ship goods between two points within the United States.

Disclosure: This Trade Alert is provided for informational purposes only and is not intended to serve as or provide legal advice relating to a particular matter. Should you have specific questions regarding an international trade or immigration matter, please contact either Jon P. Yormick, Esq. or Cathy C. Prusinski, Esq., YORMICK & Associates, Co., L.P.A., t: +1.216.928.3474, f: +1.216.566.0857, e-mail: jon@yormicklaw.com

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