The VAT and Excise Certification was carried out in 2015. The principle goal of the VAT and Excise Certification is to proceed not paying VAT on momentary imports. Entities that may profit probably the most are these with VAT credit granted with the IMMEX (manufacturing trade, maquiladora, and export companies) programme.
The Mexican Tax Administration Service (SAT) additionally carried out a system for monitoring and controlling the balances of VAT credit score utilized inside these momentary imports (often called Annex 31).
Annex 31 works with probably the most primary management of debits and credit by making use of a strict FIFO (first-in, first-out) methodology and is linked to the tariff code declared for uncooked supplies; thus, a credit score is obtained when an IMMEX momentary import is carried out and a debit is utilized when these items are exported.
Consequently, importers that apply credit score on momentary imports are obligated to transmit an in depth deployment report on a month-to-month or bimonthly foundation leading to an extra administrative burden. Earlier than the introduction of the VAT and Excise Certification, these actions had been administered internally by IMMEX corporations, so it was not vital to tell any deployment report back to the authority except it exercised powers of verification in customs issues.
Challenges of Annex 31 administration
Since July 2020 some challenges have been recognized within the administration and updating of Annex 31. Because of the lack of exports and a few adjustments to the laws, due to the COVID-19 pandemic, there was some deviation throughout the transmission of the deployment reviews, acquiring outcomes corresponding to a non-identified tariff code, no open balances or the ‘non-valid’ standing mirrored within the system (which can end in a possible suspension of the VAT certification profit).
In February 2021, Annex 31 balances had been up to date, nevertheless, many points had been recognized by taxpayers, probably the most notable one reviews that the preliminary stock was not affected which signifies that some over discharges had been produced. This data was up to date taking into account the earlier six years of operation so importers should be able to make clear any potential necessities from the customs authorities.
Further adjustments had been utilized lately in all these programs, such because the discount on authorized temporality from 36 months to 18 or six months, thus, customs compliance groups ought to now bear in mind and dealing within the appropriate software of all changes to adjust to customs obligations to keep away from further necessities and/or audits regarding the appropriate administration of VAT credit score and IMMEX programme.
One of the best practices in Annex 31 administration dictates a frequent conciliation with the Stock Management System for Customs functions (ICS or Annex 24) which might additionally attain the bodily stock.
The administration burden of the latest adjustments made to the Legislation of Common Taxation relating to Imports and Exports (LIGIE) signifies that a overview of the replace on tariff codes for Annex 24 and Annex 31 should be thought of to keep away from any potential impression on the continuity of the debits software leading to an incorrect interpretation of the open balances which, in flip, influences the quantity of VAT being paid.
The execution of such evaluation will allow licensed entities to adjust to their customs and tax obligations and permit them to determine, for instance, vital deviations within the appropriate software of the deployment, in addition to determine lacking operations to be reported, pattern consumptions with the intention to set up totally different KPI within the administration of Annex 24 and Annex 31 or to arrange clear solutions when the authority challenges the cost of sure VAT credit.
Additionally, the lively verification of the publications of the customs authorities will present certainty within the updating of various databases which can keep away from further threat within the inaccurate administration of all data.
The fabric on this web site is for monetary establishments, skilled buyers and their skilled advisers.
It’s for data solely. Please learn our Phrases and Circumstances and Privateness Coverage earlier than utilizing the positioning. All
materials topic to strictly enforced copyright legal guidelines.
© 2021 Euromoney Institutional Investor PLC. For assist please see our FAQ.