International shipping is constantly going through changes. Many companies depend on the Mexico-US trade routes, so it’s crucial to understand what’s new in foreign trade rules in Mexico. Today we want to talk about the impact of these rules and why they are so important.
What are the best freight forwarding options in Mexico?
Without a doubt, air and sea freight are the top choices for freight forwarding in Mexico. Let’s expand on this topic before digging into the updates regarding the new rules.
When it comes to international sea shipping, there are three main options to choose from:
- full container;
- LCL, or Less-Than-Container: an economical version for shipping goods that cannot fill an entire container;
- flat rack: used in cases when the goods need to be tied down to the floor.
Air freight is the better option if the shipping needs to be quick – both for domestic and international freight forwarding. Even though this is often a more expensive option, there are several budget options.
Why should companies use freight forwarding?
Freight forwarding is the best option to move large quantities of goods quickly and safely. Even though the most common use is in the supply chain, there are other uses as well, like moving a business.
For starters, company relocation is not easy, and a business needs to think about the best time to move a business. After you consider the timing, there come tasks such as finding the best way of transportation.
We want to look at the new international freight forwarding rules because they change the game. Customers and service providers need to align with the latest rules and regulations.
How did the freight forwarding rules change from 2020 up till now?
We have already mentioned that freight forwarding rules change every few years. The last change was in 2020. Let’s quickly review those changes before we take a look at the newest update.
Legal stay in Mexico for temporary virtual importations
The AEO companies can legally stay in Mexico due to temporary virtual importations for up to 36 months. A company with VAT Certification only has a six-month term for such importations. There is no transitory provision change, which means that companies must evaluate the impact, considering the reliability of the inventory control systems for foreign trade.
New eligibility requirements
The new steps for registering in the Comprehensive Business Certification Scheme are:
- All addresses for carrying out Maquila-related activities must be registered with the SAT. The same applies to developing foreign and economic trade activities or export programs.
- The contact list needs to be updated for tax mailbox purposes;
- Refer to article 40, paragraph m of the Federal Law of Governmental Fees for payment of any fees. The current fee is MXP $29,478 / USD$1,344;
The changes in VAT Certification Modality
Before the change, companies with VAT Certification had the privilege of enjoying various benefits related to their trade operations. They had a VAT and IEPS tax credit for temporary imports. The new Resolution eliminates these benefits, and they now only apply to companies with AOE registration.
Before the elimination of these benefits, there was also a distinction between benefits within the A, AA, and AAA modalities of the VAT Certification. After the Resolution, these three sections now have the same benefits. But the applicable requirements are still maintained for each section, depending on whether the applicable term of the VAT Certification is 1, 2, or 3 years.
Furthermore, IMMEX Program temporary imports must be carried out in the last twelve months. This creates a clear distinction between service programs and IMMEX manufacturing programs. Even with this change, it is still required to have at least 60% of the temporary imports value return in the 12-month period.
The changes in AEO modality
Since the companies with VAT Certification had their benefits removed, these benefits now only apply to companies with AEO registration:
- The 36-month period of stay in Mexico for temporary imports and virtual operations;
- It is not required to send the value manifest for temporary imports to the customs broker;
- There is no immediate suspension from the Importers’ Registry;
The process of payment of renewal fees for all modalities
A company must first pay governmental fees if it wishes to request the VAT Certification renewal. The fees are covered in article 40, paragraph m, of the Federal Law of Governmental Fees. The updated amount can be found in Annex 19 of the current Miscellaneous Tax Resolution.
New foreign trade rules in Mexico
Now that we summarized the most important foreign trade rules in 2020, let’s look at the new foreign trade rules in Mexico. The most important rules include:
- The notice of personnel must be registered before Social Security (IMSS) – 22/CL.
- The Extension and Authorization for the entry or exit of merchandise. This includes national territory through a place other than the authorized location (an addition) – 49/CL.
- The Computer Program has a request for a favorable technical opinion. It is necessary to carry out Volumetric Controls and obtain authorization for the entry and exit of merchandise. – 70/CL
- New notice to send the opinion and certificate of the persons authorized. This is required for the entry or exit of merchandise. Both 70/CL and 71/CL refer to the entry or exit of merchandise from the national territory through a place other than the authorized one. – 71/CL.
- There was an omission of the notice of compliance with regulations and non-tariff restrictions – 79/CL.
- The new cost for the authorization for the extraordinary service for the clearance of the goods is now $250.90 – 128/CL.
These changes were the most important ones to mention, but it would be good to review the entire list. Understanding the new foreign trade rules in Mexico is crucial for continuing a successful freight forwarding business and having a fruitful import/export company. The sooner the companies align with these changes, the better.