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Does Mexico assess import duties on raw materials and equipment?

15 Jul 2014

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Yes. Mexico’s international trade is based on a harmonized tariff system, much like the U.S. and Canada in which a particular good is classified using the harmonized tariff schedule and subsequent import duties based on country of origin and value.

The Mexican government has instituted a number of programs that helps manufacturers reduce and in most cases, eliminate, import duties for goods entering Mexico. In addition to NAFTA, Mexico provides programs such as PROSEC and REGLA OCTAVA (translates to the eighth rule) which reduce duties on many industry specific commodities.

While the 16 percent of a levied VAT tax is not an import duty, Mexico will assess VAT on all imports of raw materials and equipment effective January 1, 2015. There is however a mechanism that maquila operations can use to request an instant credit to this VAT tax at the time of import.

The mechanism is known as a SAT Certification.SAT is the enforcement branch of Mexico’s treasury department and companies that meet the certification requirements will not have to pay the VAT tax at the time of importing raw materials or equipment into Mexico.

Furthermore, VAT tax is assessed and payable each time consumable items enter Mexico.