Modifications on the VAT/IEPS Certification

On July 24 of this year, the Mexican government published modifications to the General Rules of Foreign Trade 2020 (GRFT) and Tax Miscellaneous Resolution of 2020 (TMR), which took effect on July 27 of this year, except for some rules that will be applicable in accordance with the transitory articles.
The main changes are detailed below:

The benefit of expedite Value Added Tax (Hereinafter VAT) refunds was repealed for those companies that are certified for VAT and Excise Tax (hereinafter IEPS) purposes

The repealed rule established a faster refund process for each of the three different types of certification as shown in the list below.

With this change, these certified companies will now follow the same rule as any other company in Mexico, which establishes 40 working days for the tax administration system to process a VAT or IEPS refund (additional rules and exceptions apply) as stated in the Mexican Fiscal Code.

It is worth mentioning that through transitory articles in the GRFT, the expedited terms of VAT refund will continue to apply up until the next certification renewal

Finally, it is important to point out that one of the benefits that remains for certified companies in terms of VAT and IEPS is the 100% VAT or IEPS credit which will continue to allow for this type of companies to import goods and equipment without having to pay VAT on temporary imports.

Manifestation of Value

The exemption for companies certified in the VAT/IEPS mode of not having to present the declaration of value in temporary imports is eliminated, this exemption is still maintained only for those companies that have the OEA (Acronym in Spanish of Authorized Economic Operator) certification.

Reduction of benefit for VAT/IEPS certified companies

Some additional benefits that certified VAT/IEPS companies had were reduced, here we list some of those main changes:

There will be no automatic registration in the sectorial registers.
Term for the permanence of the temporarily imported goods of 36 months is reduced to 18 months. The permanence of the temporality imported goods for the OEA companies is maintained. This change will enter into force from 1 January 2021.
The benefit to provide evidence to avoid automatic suspension or cancelation of the general and sectorial sectors suspension for one "A” certified companies was eliminated.
Period of permanence of 36 months (OEA only) - remaining at 18 months for the temporary import of goods.

New requirements for new VAT/IEPS certifications for the first time

In accordance with the new changes in the foreign trade rules, below are two of the main changes to the new requirements that, among others, must be met by companies applying for VAT/IEPS certification for the first time:

A fee must be paid to obtain the VAT/IEPS certification; the approximate cost is $29,748 pesos. If, in addition to the VAT/IEPS certification, it is performed simultaneously with the OEA authorization, another fee must be paid.
Extension of 10 working days for a single occasion to comply with requirements.

New requirement for renewals of VAT/IEPS certifications