Doing Business

Doing Business in Mexico 2015

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225 Doing Business in Mexico 2015 Appendix XII Value-added tax – Items subject to zero rate The following groups are zero rated (i.e., no tax is payable on them) for VAT purposes. Nevertheless, business enterprises may take credit for VAT charged to them by suppliers of goods and services used in producing the income, or claim a refund. 1. Sales or other transfers of the following: a. Animals (except for dogs, cats ad small species used as home pets;), vegetables and fruits not industrialized; for these purposes, wood is considered not industrialized; b. Patent medicines; specified basic foods, including meat, milk and eggs; c. Natural water (except when presented in containers of less than 10 liters capacity) and ice; d. Palm, istle and agave fiber; e. Tractors exclusively used to operate farm equipment, except those with crawler treads; power cultivators for small areas, plows and harrows; cultivators to spread and dewed; harvesters, sprayers or applicators of liquid or solid fertilizers, pesticides, herbicides, and fungicides; mechanical, electrical or hydraulic farm irrigation equipment; planters, equipment for silos; cutters and packers of livestock feed; grainers, equipment to manure and fertilize fields; airplanes for fumigation; hand- operated power chain saws; and, with certain limitations, commercial fishing boats (the foregoing items are granted the zero rate only when sold as complete units); f. Fertilizers, pesticides, herbicides, and fungicides if used exclusively in agriculture or livestock rising; g. Hydroponic nurseries and related equipment to produce controlled temperature and humidity or to protect plants from the elements, and irrigation equipment; h. Gold jewelry, flatware, and artistic and ornamental pieces with a minimum 80% gold content, not for retail sale; and i. Books and magazines. 2. The following independent services: a. Those furnished directly to farmers and ranchers for their agricultural and livestock activities and for well-drilling, lighting and the construction of reservoirs; electrical power for use in irrigation systems; land clearing and road building within their properties; agricultural irrigation and fumigation; harvesting, vaccination, sanitation, and insemination of livestock; and the capture and extraction of sea or freshwater species; b. Grinding and milling wheat and corn; c. Pasteurizing milk; d. Services rendered in hydroponic nurseries; e. Cotton ginning; f. Slaughter of cattle and barnyard fowl; g. Reinsurance; and h. Supply of water for domestic use. XII

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