Mexico

ISO Country Code: MX
Currency Name: Peso
Currency Code: MXP

OVERVIEW

Mexico uses the Harmonized System of Customs Codes (Sistema Armonizado de Codigos Arancelarios), which is the national tariff schedule. Import duties range from 0% to 254%. High duty amounts are applied to sensitive goods including animal and agricultural products. Other taxes and fees levied on importation of products are as follows: Valued Added Tax, Excise Tax and Customs Processing Fee.

Mexico has signed free trade agreements with a wide range of countries in the Americas and Europe, and it is also a member of LAIA (Latin American Integration Association) a.k.a. ALADI.

 

TARIFF STRUCTURE

Mexico has a simple tariff structure. Products are classified on an 8 digits tariff number, which also establishes duty rates.

Important: As of January 12, 2007, the amendments related to the 4th WCO changes to the Harmonized System have not being published by the country Official Gazette, hence it is not yet in effect.

DUTIES AND TAXES SUPPORTED BY MANAGEMENT DYNAMICS

DUTY = Duty

DTA = Customs Processing Fee

IEPS = Special Tax for Production and Services (Excise tax)

VAT = Value Added Tax

Duty

Ad-valorem duties are assessed on CIF value. Compound duty rates are levied on products such as sugar and sugar related products. Specific duty rates are levied in products including vehicles.

DTA

Imports from Israel, EFTA and European Union are subject to payment of DTA (Customs Processing Fee) in the amount of 179 Mexican pesos.

Imports from United States, Canada, Chile, Costa Rica, Colombia, Venezuela, Honduras, Guatemala, El Salvador are exempt from DTA payment.

Goods from the rest of the countries are subject to a DTA in the amount of 0.8% of the CIF value with a minimum value of 179 Mexican pesos.

IEPS

Excise taxes (IEPS) in Mexico are applied to imports of alcohol, cigarettes and mineral oils and on some luxury goods such as furs, jewelry, gasoline, and others.
IVA

Mexico levies a value added tax (IVA) on certain products. Generally this tax is not applied to animal and plant products, food products and pharmaceutical products. The IVA rate varies between 0 and 15%, depending on product type.

 

DUTIES AND TAXES NOT SUPPORTED BY MANAGEMENT DYNAMICS

ISAN Tax (Tax on new vehicles) - This is an import tax applied to new vehicles imported for consumption. Due to the complexity of calculation that is based on an Ex-Work valuation basis, this is a manually calculated tax.

 

CUSTOMS VALUATION

Duties for goods imported into Mexico are assessed on a CIF basis, regardless the applicability of free trade agreements.

 

PREFERENTIAL AGREEMENTS

Free Trade Agreements

Mexico has signed 12 Free Trade Agreements, which are already in effect and are as follows:

1.) North American Free Trade Agreement (NAFTA)

2.) FTA Mexico and European Union

3.) FTA Mexico, Colombia, and Venezuela

4.) FTA Mexico and the European Free Trade Association

5.) FTA Mexico and Bolivia

6.) FTA Mexico and Chile

7.) FTA Mexico and Costa Rica

8.) FTA Mexico and Nicaragua

9.) FTA Mexico and Israel

10.) FTA Mexico and Uruguay

11.) FTA Mexico, Guatemala, El Salvador and Honduras

12.) FTA Mexico and Japan

 

Trade Agreements

ALADI(LAIA Latin American Integration Association)

Mexico is a member of ALADI (Latin American Integration Association). Management Dynamics covers all ALADI trade agreements in effect as of today, including the following agreements types: Market Opening (AR.AM); Regional Tariff Preference (AR.PAR); Economic Complementation (AAP.CE); Renegotiation (AAP.R); Commercial (AAP.C); Agriculture and Livestock (AAP.AG); Trade Promotion (AAP.PC) and Montevideo Treaty (AAP.A.14TM and AAP.A25TM).

Note: In all cases if a country and a product are eligible to more than one preferential program, the Mexican importer may benefit from the program offering the lowest duty rate or highest preferential discount.

 

Duty Reduction Programs

PROSEC

Mexico has implemented a program denominated Programa de Promoción Sectorial (Sectoral Promotion Program -PROSEC), which reduces the Most Favored Nation tariffs to a range of 0 to 5 percent on a wide array of imported goods needed by Mexico’s manufacturing sector. This program includes over 20 different industry sectors, and companies must be registered importers in order to be eligible to these reduced duty rates.
FRONTIER REGION AND NORTH FRONTIER ZONE

Reduced duty rates are granted to specific products imported into the Mexican border region defined as the Frontier Region or North Frontier Zone. Products should be imported to be specifically used in commerce, restaurants, hotels and specific service sectors established within these two regions. A reduced Value Added Tax of 10% applies to goods that are subject to VAT payment of 15%. Companies must be registered importers with the Secretariat of Economy in order to be eligible to these reduced duty rates. Frontier Region and North Frontier Zone can be selected by the software functionality “Province” of the Landed Cost Calculator.

FRONTIER REGION

Defined as the region which incorporates the States of Baja California, Baja Califonia Sur, Quintana Roo, and the partial region of Sonora; the border region adjacent with Guatemala and the tows of Caborca , Sonora, Comitán de Dominguez, Chiapas and Salina Cruz, Oaxaca.

The border region adjacent with Guatemala is defined as the zone between the territory of 20 km that is parallel to the southern international border line, located in the section between towns of Union Juarez and the outlet of the Suchiate river in the Pacific Ocean, within which is located the City of Tapachula, in the State of Chiapas with its correspondent geographic limits.

NORTH FRONTIER ZONE

Defined as the region between the northern international border line of Mexico and a parallel line that goes to a distance of 20 kilometers into the interior of the country, in a region between the limit of the partial region of the State of Sonora and the Gulf of Mexico, as well as the border town of Cananea, Sonora.

The partial region of the State of Sonora is defined as the region between the following limits: at north, by the international border line that extends from the river-bed of the Colorado river until the point located in this line at 10 kilometers at west of Sonoíta , from this point, by a straight line that reaches the coast at a point located 10 kilometers at east of the Peñasco Port; from there, follows the river-bed of this river up the north reaching the international border line.

 

UNITS OF MEASURE

Glossary of Abbreviations

BARR = BARRELS

CBZA = HEADS

G = GRAMS

KG = KILOGRAMS

KG. = KILOGRAMS

KWH = KILOWATT HOURS

L = LITRES

L. = LITRES

LT. = LITRES

M = METERS

M. = METERS

M2 = SQUARE METERS

M3 = CUBIC METERS

MLL = 1000 UNITS

PAR = PAIRS

 

IMPORT CONTROLS

Mexico requires import licenses for a number of sensitive products, including endangered species and weapons. In order to import food products, an import permit must be obtained from the relevant governmental authority. Mexico has few import prohibitions.

To be eligible to import well over 400 different items, including agricultural products, textiles, chemicals, electronics, and auto parts, importers must be registered with the Specific Sectors Importer Registry (Padrón de Importadores del Sector Específico).

The following Mexican import controls are captured by Management Dynamics:

1. Import Licenses: for animals, meat, food products, explosives, chemical substances, machinery, dangerous goods, medicines, vehicles, defense products, and others.

2. Import Prohibitions: for specific medicines, chemicals, skins/leather products, vegetable extracts, printed materials, and others.

3. Import Inspections: for animals, plants, food-related products, and others.

4. Import Certificates: Certificate of Origin for textile and pharmaceutical products; Quota Certificate for food products, textiles, shoes, vehicles and others.

5. Anti-Dumping Duties: for animals, meat, agricultural products, chemicals, textiles, shoes, ceramic products, steel products, tools, machines, machinery apparatus, bicycles, toys, pencils, lighters, valves, locks, and others.

6. Tariff Rate Quotas: for agricultural products, alcoholic beverages, cigarettes, iron alloys, vehicles, molds for plastics, and others.

7. Sanitary Certificates: for live animals, plants, and food-related products.

8. Registrations: for animals, food products, chemicals, cement for use in dentistry, clothes for use in surgery, certain type of textiles, electronic and auto parts, certain types of machines, televisions, motorcycles, toys, and others.

9. Labeling Requirements: for products imported for consumption only, including textile products, shoes, toys, electronic products, household goods, paints, food products, and others.

10. Standards: for products imported for consumption only, including electronic products, household goods and others.

11. Reference Price Inspection: for food products, cigarettes, textile products, glass products, steel products, automobiles, toys, and others.

 

IMPORT CONTROLS NOT SUPPORTED BY MANAGEMENT DYNAMICS

Some of the relevant import controls not yet covered are as follows:

1. Prohibition of In-transit Cargoes: for food products, cigarettes, chemicals, fertilizers, textiles, and others.

2. Entry Port Requirements: for food products, pharmaceuticals products, rubber products, leather products, textiles, shoes, machinery, electronics and others.

 

EXPORT CONTROLS

The Mexican government applies export controls to certain products, including defense products and services exported to specific countries.

The following Mexican export controls are captured by Management Dynamics:

1. Export Licenses: for certain food products, chemicals, fuels, minerals, blood products, machinery, industrial furnaces, defense products, antiques, and others.

2. Export Prohibitions: for certain types of seeds, fish, medicines, narcotic substances, skins of certain animals, printed media containing material that is considered forbidden by the Mexican government, defense products, and others.

3. Standards: Tequila.

4. Labeling Requirements: Tequila.

 

01/12/2007