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Doing Business in Mexico 2015

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63 Doing Business in Mexico 2015 Rates Import duty rates range from 0% to 35%; however, most taxable merchandise falls within the range of 3% to 20%. Higher rates apply to different types of goods and to imports from certain countries, ranging from 30% to 260%. Examples of these goods include fabrics, leather, malt, beans, crabs, live chickens and hens, coffee-based extracts and extracts for juices. Compensatory quotas can raise duties up to 500%. Special rates and customs associations Mexico has signed ten FTAs, such as the NAFTA, European Free Trade Agreement, European Free Trade Association, Central America FTA, Colombia, Chile, Uruguay, Israel and Japan. These FTAs require Mexico to apply preferential duty rates to the importation of goods from 45 countries. Additionally, some preferences are provided in the form of import duty reductions pursuant to per-country bilateral trade agreements signed under the Latin American Integration Association (ALADI). Furthermore, Mexico signed economic cooperation agreements with Brazil, Argentina, Paraguay under MERCOSUR (South America Common Market). All preferential customs rates may be requested by the importer if a certificate of origin is submitted before customs. In addition, the Ministry of Economy maintains Sectorial Relief Programs (SRPs) since 2001. SRPs are designed to support domestic manufacturers by allowing them to import components, raw materials, and equipment under a preferential import duty rate, regardless of their origin, provided that such items are used in the production of goods authorized by the corresponding SRP (most duty rates granted under these programs range from 0% to 5%). Other taxes Merchandise whose sale or production within Mexico is subject to excise, production or other indirect taxes is also subject to these taxes on import. Usually, the taxable base for the calculation of these taxes is the customs value (transaction value plus related expenses), plus import duties. The expenses refer to those expenses paid abroad and related to the importation (i.e. freight, insurance). Additionally, most imports of tangible goods are subject to Value-Added Tax (VAT) at the same rate that applies to domestic sales (16%). Refer to Chapters 23 and 24 for more information on VAT and other indirect taxes. 8

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