Mexico Eliminates Certain Benefits for IVA/IEPS Certified Companies
and Offers New Benefits to OEA Certified Companies 

By Miriam Name and Enrique Hill, Cacheaux, Cavazos & Newton

For many years the Mexican government has charged the Value Added Tax (IVA by its acronym in Spanish) and Excise Tax on Products and Services (IEPS by its acronym in Spanish) on goods temporarily imported into Mexico by IMMEX companies. However, to ameliorate the negative cash flow implications of such temporary importations, IMMEX companies have been able to apply for a certification designed to grant a 100% tax credit for IVA and IEPS imposed on temporary importations (IVA/IEPS Certification). Accordingly, IVA/IEPS Certified companies have been able to temporarily import goods without actually paying IVA and IEPS by applying a credit to the amount of the IVA and IEPS due on a given importation.

Over the years more and more benefits have been added to the IVA/IEPS Certification program for the benefit of IVA/IEPS certified companies including, among others, the following:

  • Reduced time periods for IVA refunds.
  • The ability to temporarily import raw materials for up to 36 months.
  • No immediate suspensions from the Importers’ Registry.
  • Immediate registration in certain Import and Export Registries for Specific Sectors.
  • The ability to operate using V5 customs declarations (transfers of temporarily imported goods to Mexican residents located in Mexico, for their permanent importation). 

On July 24, 2020, the Mexican government published the First Amendment to the General Rules of Foreign Trade for 2020 in Mexico’s Official Journal of the Federation making significant changes to the benefits afforded to companies that participate in the Business Certification Program, including the IVA/IEPS and OEA (the Mexican equivalent of the C-TPAT) Certification programs.

The amendment eliminated several of the most important benefits of the IVA/IEPS Certification, while other benefits were transferred to the OEA Certification. In summary, the following are among the principal changes in the amendment: