Mexico s Auto Industry Conference Industry Analysis - Opportunities for Suppliers. Puebla, MX December 4-5, 2013

Transcription

1 Mexico s Auto Industry Conference Industry Analysis - Opportunities for Suppliers Puebla, MX December 4-5, 2013

2 MEXICO S AUTO Industry Conference Puebla, MX December Manuel Padrón Castillo Luis Carbajo Martínez Baker & McKenzie Abogados, S.C. is a member firm of Baker & McKenzie International, a Sw iss Verein with member law firms around the w orld. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person w ho is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm Baker & McKenzie Abogados, S.C.

3 Customs Law Reform 2014 Relevant Changes 2013 Baker & McKenzie Abogados, S.C.

4 General Objective Provide mechanisms to improve the procedures to facilitate international trade Better control at the entrance and exit of goods into a from national territory. Promote innovation and modernization of customs operations Infrastructure investments Incorporation of best practices in customs matters Non-intrusive technologies for customs clearance 2013 Baker & McKenzie Abogados, S.C. 3

5 Relevant changes to the Customs Law [change [change title title in in View/Header Slide Master] and Footer] 4 4

6 Relevant Changes Implementation of a customs electronic system Optional use of Customs Broker Repeal of in-house customs broker, creates legal representative for customs clearance Special requirements Repeals substitute customs broker Promotes inspections with non-intrusive technologies 5

7 Relevant Changes Rectification of any field of the pedimento (customs declaration): Change of customs regime without previous authorization Spontaneous regularization of goods without the payment of fines 50% reduction in formal fines, provided the payment is made before the final resolution 6

8 Electronic Notifications (personal) CES Notice of availability of notification (administrative act) After opening the administrative act the acknowledgment is generated with the date and time. 5 days CES 7

9 Tax Reform 2014 Relevant Changes

10 VAT [change [change title title in in View/Header Slide Master] and Footer] 9 9

11 Tax Reform VAT The VAT on the border regions is increased from 11% to 16%. Imposes VAT on temporary imports from maquiladora companies, bonded warehouse, tax precincts and strategic tax precincts; Maquiladoras may be certified to obtain a special credit to avoid the need to pay VAT upon temporary importation. Alternatively, they may post a bond. Preserves VAT exemption on sales between non-mexican residents Subjects to VAT the sale from a non-mexican resident to a maquiladora company (WHT VAT, would it be creditable?). 10

12 VAT in temporary importations New VAT in temporary importations Relevance customs value Valuation methods: Transaction Identical Goods Similar Goods Unit Selling Price Reconstructed Value Determined Value (other methods) 11

13 Income Tax [change [change title title in in View/Header Slide Master] and Footer] 12 12

14 Maquila Operation Concept CURRENT I. Inventories Owned by foreign resident Temporarily imported Return abroad, including virtually II. Transformation or repair activities Of temporarily imported inventories III. M&E At least 30% owned by foreign resident Not previously owned by maquiladora or Mexican related party Grandfather provision (12/31/2009) TAX REFORM I. Inventories (Same) (Same) (Same) II. Transformation or repair activities (Same) III. M&E (Same) (Same) No grandfather provision IV. Invoicing requirement No specific requiremetns for PE exemption IV. Invoicing/performance requirement All productive income shall derive from the maquila operation 1

15 Tax Reform Income Tax Incorporates the definition of "maquila operation" for purposes of providing a permanent establishment protection. Limits the deduction of exempt payments to employees and pension fund contributions (53%-47%). Harmonizes the base to calculate the profit sharing with the taxable base for purposes of the corporate income tax (allowing the reduction of non-deductible portion of fringe benefits). Eliminates the obligation of statutorily audited financial reports (dictamen fiscal) 14

16 Tax Reform Income Tax Creates an additional 10% income tax on the payment of dividends for payments to individuals and non-residents. Prohibits the deduction of payments to related parties when they are residents of a preferential tax regime, unless such payments are determined at arm s-length and subject to taxation in their respective tax jurisdiction. Prohibits the deduction of payment of royalties, technical assistance or interests made to a foreign entities that controls or is controled by the Mexican payor, if the beneficiary owner is not taxed in the foreign jurisdiction. Eliminates the immediate deduction on investments. 15

17 Miscelanous matters [change [change title title in in View/Header Slide Master] and Footer] 16 16

18 Miscelanous Matters Repeals the Single Rate Tax Law (IETU) New rules on the Tax Code for: Electronic mailbox Joint liability of active shareholders and partners Electronic accounting 17

19 Thank you! Manuel Padron Luis Carbajo Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an office means an office of any such law firm.

20 Mexico s Auto Industry Conference Industry Analysis - Opportunities for Suppliers Puebla, MX December 4-5, 2013