The IMMEX program has several advantages (mentioned and explained in other articles in this issue), for example: the application of a
tax credit equivalent to 100% of the VAT payable on imports; however, in order for this type of benefit to be applicable, each and every one of the requirements necessary for its authorization and execution must be met. TAXES APPLICABLE
One of the most relevant requirements is that whoever intends to participate in this program must be up to date with their tax obligations, which includes, of course, the payment in due time and form of the applicable taxes and fees, based on article 31 section IV of the Constitution, which states that it is the duty of Mexicans to contribute to public spending, as well as to the federation (…) in the proportional and equitable manner established by law.
This article will explain in general terms the application of the foreign trade taxes, countervailing duties and income tax applicable to the beneficiaries of the IMMEX program.
FOREIGN TRADE TAXES AND COUNTERVAILING DUTIES
In the case of temporary imports, foreign trade taxes and countervailing duties will not be paid as long as the terms stipulated in Article 108 of the Customs Law are not exceeded, except for certain exceptions that must be subject to the provisions of the Treaties to which Mexico is a party, taxable bases, estimated prices, etc., in accordance with Articles 56, 63-A and 104 of the Customs Law.
It is worth mentioning that the goods that have been temporarily imported must be returned abroad or be destined to another customs regime within the established terms or change the temporary import to definitive, otherwise it will be understood that the goods are illegally in the country.
INCOME TAX
One of the benefits of the program for the promotion of the manufacturing, maquiladora and export services industry is to authorize entities resident in Mexican territory referred to in Section II of Article 9 of the Federal Tax Code to pay taxes in accordance with Title II of the Income Tax Law.
Since there is no exception, concession or benefit in this regime with respect to income tax and since it is a legal entity incorporated under Mexican law, it will be subject to the tax treatment of the General Corporate Income Tax Regime, which is regulated by Title II of the Income Tax Law, which basically consists of applying the general rate of 30% of the taxable income for the year, in accordance with the provisions of Article 9 of the aforementioned Law.
The above must be made through provisional payments on account of the tax for the year, and in accordance with Article 14 of the Income Tax Law, there are 17 calendar days of the month immediately following the month to which the payment corresponds to report the income, as well as to declare and pay the corresponding tax.
Such provisional payments will be taken into account in the determination of the annual tax return (which is also an obligation under the general tax regime). In this return, the profit coefficient must be determined, which will be used to determine the provisional taxes as of the date such return is filed. Such coefficient is calculated by dividing the taxable income for the year by the nominal income for the year.
MULTIPLE INFORMATIVE DECLARATION
MULTIPLE INFORMATIVE DECLARATIONAnother obligation of taxpayers under this regime is to file the annual information on transactions carried out with related parties with foreign residents in accordance with article 76 section X and 110 section X of the Income Tax Law. This will be done through Annex 9 (multiple informative declaration or DIM, for its acronym). The date for filing such return is no later than May 15 of the year immediately following the end of the fiscal year in question.
TAXES APPLICABLE
INCOME TAX WITHHOLDINGS FOR PROFESSIONAL SERVICES
Likewise, it is required to submit the payment of income tax withholdings for professional services, in case of receiving such services from individuals. This is in accordance with the provisions of article 106 paragraph 5 of the Income Tax Law, which states that the withholding rate for individuals is 10% of the amount of the payments, without making any deduction. This withholding counts as a provisional payment for the person to whom it is withheld.
The timely payment of the corresponding taxes is of vital importance, since the Ministry of Economy (which is in charge of administering the IMMEX program) is also in charge of analyzing and reviewing that there is no non-compliance with any of the requirements. If so, penalties such as fines or even the suspension of the program may be imposed, thus affecting foreign trade operations. Hence the importance of not neglecting the tax area in charge of the company.
TAXES APPLICABLE
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