Benefits of IVA (VAT) / IEPS Certification

Many companies are familiar with Mexico’s IMMEX program for international and US companies manufacturing in Mexico, which has been in place for over 30 years and is governed under the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry. IMMEX has several benefits, including allowing companies to apply for VAT (Value Added Tax) and IEPS (Special Tax on Products and Services) Certification. This certification is advantageous because it grants more flexibility in import and export processes with authorities and provides even more tax savings than IMMEX alone.

The IMMEX program provides for the temporary duty-free import of goods destined for export (subject to applicable regulations), but since 2014, they have been subject to the payment of VAT and IEPS. To recover this, companies can either apply for a refund once the products have been exported, or obtain VAT and IEPS Certification. This certification allows companies to avoid paying VAT and IEPS upon import through advance tax credits.

The advance tax credits apply for temporary imports used in maquila programs, those imported to fiscal deposit operations for the assembly and manufacturing of vehicles, or for manufacturing or repair in a bonded warehouse or strategic bonded warehouse. Furthermore, it allows companies to extend the duration of temporary import under IMMEX up to 36 months. This can even be extended up to 48 months for importers registered under the SECIIT (Electronic System for Temporary Import Control System) modality.

In addition to these tax benefits, the certification also grants automatic registration in the Specific Sectors Importer’s Registry in various categories, including footwear, textile and clothing, steel, and plastics, among others. It provides additional flexibility with customs authorities if any inconsistencies are found on import documents, allowing importers to self-correct these within 60 days (at no cost) and avoid automatic suspension of their registration.

Furthermore, it waives importers’ obligation to provide customs brokers with value manifest forms and the calculation sheet for determining the customs value of goods imported. For virtual transfers, it permits temporary imports to non-IMMEX companies for companies under with AAA certification.

Additional requirements beyond IMMEX certification for VAT and IEPS Certification vary depending on the importer’s category and sub-modality. They include compliance with tax and customs obligations and import values, among others. If you would like to learn more about this certification, its benefits, requirements, and if your company might be eligible, don’t hesitate to contact us.