Two Ways Working under a Provider of Shelter Services in Mexico Can Help You Save on Taxes

By Gerardo González | Guanajuato Regional Director at American Industries Group®
Published 07/20/2022

In addition to the main incentive programs available to companies in Mexico that help businesses save money on export taxes, tariffs, and duties we discussed in a recent article, there are also various tax incentives you will also want to take advantage of. Due to the complexity of tax laws and because every situation is unique, it is a good idea to work with a provider of shelter services in Mexico to ensure you get the maximum savings possible.

In Mexico, there are two main federal taxes all companies operating under their own legal entity will have to pay: VAT (IVA) or value-added tax and FIT (ISR) or federal income tax. The first, VAT, is a standard 16% tax payable on all sales of goods and services, lease payments, and imports of goods and services in Mexico.

immex program in mexico

Companies enrolled in the IMMEX program, and VAT certification can defer or eliminate VAT for temporary imports, maquila services, and even acquisitions from local suppliers in some instances. Additional incentives and deductions are also available on VAT, and companies can apply for refunds for various concepts and deductions. However, the process is complicated and takes 90-120 days to receive the refund. On the other hand, by working with the American Industries’ shelter, companies can operate exempt from import VAT tax on machines or raw materials imported as well as local expenses, including leases, electricity, packaging, and cafeteria services, among others.

Companies working under a shelter will also save on FIT (income tax). Companies that operate under a shelter non-incorporated model are not required to set up their own legal entity in the country. This means they do not technically have income in Mexico, and the 30% tax does not apply. Instead, companies will pay tax under the safe harbor methodology.

manufacturing in mexico

All companies want to make the most of tax savings available to them, and these are just some available to companies operating in Mexico. Due to the complicated nature of tax law and working in a different country, you will want someone with in-depth knowledge of the law and tax codes on your side who can ensure you get all the additional incentives and cost savings possible.

Gerardo González

Guanajuato Regional Director

American Industries Group®

If you would like to find out more about the tax incentives your company is eligible for in Mexico, don’t hesitate to reach out to talk to one of our experts today.

Share it!

Follow Us

Latest Posts

November 23, 2022

Aluminum; business for the USMCA market

Over two years after the enactment of the United States-Mexico-Canada Agreement (USMCA), aluminum imports from the US to Mexico have reached record levels. As one of […]
November 10, 2022

Doing Business in Mexico: Labor Considerations and Foreign Investment

One of the main reasons Mexican manufacturing has been so popular, especially for US companies, is its competitive labor rates. This means significant savings, but at […]
November 8, 2022

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 […]
Did you find this content interesting? Sign up for our monthly newsletter to receive more articles and infographics.

Subscribe

If you would like to find out more about this topic or are interested in receiving a complimentary business case analysis for your operation in Mexico, please fill out this form or contact us at:

US toll-free: +1 (877) 698 3905

CN Toll-free: +1 (400) 076 8899

start@americanindustriesgroup.com

Please note that we do not accept job applications here. If you are interested in applying for a position, please visit the following link: https://www.americanindustriesgroup.com/jobs/





YOU MIGHT ALSO LIKE

July 27, 2020
Canadian Off-Road Vehicle Company Trailblazing in Mexico Under New USMCA
Only a day after the new USMCA went into effect, the Canadian company Bombardier Recreational Products (BRP) was the first to announce that it will be […]
December 5, 2020
Operating in Mexico: How Much Will it Cost?
When considering starting up or relocating operations, including nearshore or offshore manufacturing in Mexico, one of the first steps  is to have an estimated cost of […]
November 10, 2020
Shelter Services in Mexico: A Key Partner in Strategic Expansion
Today many companies are analyzing ways to expand their business, create a more resilient supply chain, and adapt to market changes. In doing so, it is […]
October 13, 2022
Standard Work Week in Mexico
What is the Standard Work Week in Mexico?
Among the many benefits of setting up or expanding operations in Mexico, one of the most attractive is its available, skilled, and affordable labor force. Many […]
August 8, 2022
Manufacturing in Mexico
The Great Resignation and Manufacturing in Mexico
Since the pandemic started, workers worldwide have quit their jobs in unprecedented numbers This trend, known as the great resignation, has added yet another concern to […]
November 26, 2020
Statista Country Report: Positive Outlook for Mexico
According to a comprehensive report compiled by the German company, Statista, assessing the risks and opportunities for international business, Mexico’s economic future looks promising. As a […]