INSIDE THIS ISSUE: 1) Mexico Eliminates Certain Benefits for IVA/IEPS Certified Companies and Offers New Benefits to OEA Certified Companies
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ILS MONTHLY CONNECTION | AUGUST 2020 |
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A) IVA/IEPS Certification
- Elimination of the distinction of benefits among the A, AA and AAA modalities. The same benefits will apply across all modalities. The only differences between the modalities will be their respective requirements and their term periods (1 year for A, 2 years for AA and 3 years for AAA).
- Elimination of the reduced time periods of 10, 15 and 20 days for IVA refunds to certified companies. Now IVA/IEPS certified companies will be subject to the generally applicable time period of 40 or more days.
- Elimination of the benefit to temporarily import raw materials for up to 36 months. Companies will now be subject to the general time period of 18 months.
- Elimination of the benefit of not being immediately suspended from the Importers’ Registry upon the detection of an irregularity set forth in article 1.3.3 of the General Rules of Foreign Trade.
- Elimination of the immediate registration to the Importers’ Registry of Specific Sectors for footwear, textiles, steel and steel products, as well as to the Sectorial Exporters’ Registry of plastics, rubber, wood and paper, glass, iron, steel and aluminum.
- Elimination of the possibility to correct tax filings and payments, and to propose an amount of omitted contributions and payments, when irregularities are detected by the company prior to the commencement of verification procedures.
- Elimination of the benefit of not presenting a declaration of value for temporary importations conducted under the IMMEX Program.
- Elimination of the benefit of complying with non-tariff regulations and restrictions within 60 days after the date of notification of the Customs Administrative Procedures initiation act, to replace the precautionary embargo on goods with the guaranties established by the Mexican Federal Tax Code.
- Elimination of the benefit of not entering merchandise identification data for the manufacture of goods in the electrical and electronic sectors, and for those IMMEX companies operating under the shelter modality with respect to goods in the aviation and aeronautical sector.
The following are eliminated with respect to the AA modality:
- When irregularities are detected, prior to the initiation of verification procedures, an invitation letter is issued for the correction of the company’s taxes.
- The possibility to correct customs declarations within three months, without the authorization referred to in rule 6.1.1. of the General Rules of Foreign Trade.
The following, among other items, are eliminated with respect to the AAA modality:
- The possibility of operating using V5 customs declarations (transfer to residents in the Mexican territory of temporarily imported goods for final importation).
- The possibility of presenting monthly consolidated customs declarations.
- The ease of not registering serial numbers on customs documents.
- Conducting export customs clearance at the exporter’s domicile.
B) OEA Certification
- Inclusion of the benefit for only 10% or 15% of the total cargo to be unloaded for customs inspections, and that such inspection be carried out by non-intrusive means.
- Inclusion of the benefit to not be immediately suspended from the Importers’ Registry upon the detection of any irregularity set forth in Rule 1.3.3 of the General Rules of Foreign Trade.
- Inclusion of the exemption from presenting the value declaration for temporary imports under the IMMEX Program.
- Inclusion of the benefit for IMMEX companies to import raw materials under a temporary basis for up to 36 months, instead of the general period of 18 months.
- Inclusion of the benefit of not entering merchandise identification data for the manufacture of goods in the electrical and electronic sectors and for those OEA certified companies with an IMMEX Program under the shelter modality with respect to goods in the aviation and aeronautical sector.
- Inclusion of the benefit of consolidation of cargo of goods for importation or exportation.
- Precautionary seizure will not apply in the cases referred to in sections II, VI and VII of article 151 of the Mexican Customs Law if the importer requests application of the procedure referred to in article 152.
- OEA certified companies with an IMMEX Program that utilize consolidated customs declarations may process such on a weekly or monthly basis.
Importantly, pursuant to the Second Transitory Article of the above-mentioned Resolution, companies that have a valid IVA/IEPS Certification on the date of publication of the Resolution may continue to apply the benefits of Rule 7.3.1. of the General Rules of Foreign Trade published in Mexico’s Official Journal of the Federation on June 20, 2020, for the term indicated in their last official notice.
In conclusion, although the IVA/IEPS credit remains intact for IVA/IEPS certified companies, the changes will have a significant impact on the operations of IVA/IEPS certified companies, which will now have to wait as long as other taxpayers to receive their IVA refunds, invariably affecting cash flow. Additionally, the shorter temporary importation period for raw materials will most certainly cause adjustments in the production and logistic processes of IMMEX companies or, alternatively, cause such companies to apply for an OEA certification if they are not already certified to maintain at least some of the benefits eliminated from the IVA/IEPS Certification.
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