Doing Business in Mexico January 21, 2015
TechBA Michigan at a glance • TechBA Michigan is the specialized automotive business unit of the international network of eight Technology Business Accelerators, sponsored by the Secretary of Economy and managed by • Located in Southfield, TechBA Michigan focuses on developing the profitable growth of automotive suppliers in the global market.
Doing Business in Mexico • • • • •
Why Mexico? Labor IMMEX Tax Other (money laundry, data protection)
Why Mexico? • AUTOMOTIVE: 8th vehicle producer 4th vehicle exporter 19 OEMs in 14 States Over 300 Tier Ones 30% of total exports
Why Mexico?
Why Automotive? • Free Trade Agreements • Location • Young, talented and highly-skilled people • Low labor costs • Infrastructure
Why Mexico?
Federal Labor & Employment • November 13, 2012 • Wages & Contracts: hourly, ways of payment, and 3 & 6 months trail contracts • Discrimination & Termination: sexual harassment and bullying; back wages limited to one year • Outsourcing: only temporary workers or independent contractors not performing same work as other employees (specialized character); co-liability. • Productivity & Training: skills have more weight than seniority (seeking competitiveness) • Unions & Transparency: secret and free voting of union leaders, transparent finances, and freedom to belong to union.
IMMEX/Maquila • The IMMEX Program is an instrument which allows the temporary importation of goods that are used in an industrial process/service to produce, transform or repair foreign goods imported temporarily for subsequent export, without covering the payment of general import tax, value added tax and, where appropriate, countervailing duties. • Annual sales abroad of at least US$500,000, or an equivalent sum in pesos, or invoice exports accounting for at least 10% of total invoices.
Tax • The Mexican tax authorities (“SAT”) recently published resolutions eliminating the obligation to file electronic accounting information for July through December 2014. The obligation will now begin in January 2015, meaning that the first filing due date will be March 3, 2015. In addition, the deadlines for taxpayers to begin providing electronic accounting were clarified as follows: • a) Starting January 1, 2015 – Corporations and individuals with cumulative income during 2013 greater than MXN $4 million. • b) Starting January 1, 2016 – Corporations and individuals with cumulative income during 2013 less than MXN $4 million.
Federal Tax Code • Joint liability of shareholders: (i) company not in the RFC Registry; (ii) change of tax domicile without giving due notice; and (iii) lack of accounting records, or destroyed or hidden. • New electronic control system: “Buzón tributario” or tax mailbox. All operations must be documented via electronic tax vouchers issued through the Internet.
Income Tax Law • Dividens: 10% tax is levied on dividends. • Deductions for entities: Employers can deduct 47% of salaries and fringe benefits. • Transfer of shares in the Mexican stock exchange: 10%. • Employee profit sharing: Taxable base for income tax purposes. • Transactions with related parties: Interest, technical assistance royalties to their foreign parties. • Maquila regime: Maquilas/IMMEX deemed to comply with transfer pricing rules. 4 years limit to operate under the “shelter” Maquila regime. • Individuals: increased from 30% to 35%. Deductions are limited.
Value Added Tax • Exemptions: VAT exemption on temporary imports for Maquila companies is repealed; but new tax credit for 100% of said VAT is established to be applied by Maquila companies that are certified by the tax authority under rules yet to be issued. This new tax will enter into force one year after the certification rules are published. • Increase in border VAT rate: from 11% to 16%
Other • • • • • •
Anti Money Laundering Law Data Protection Political Energy Telecomm Education
Contact Information Marie Alsace Galindo Director of Business Development & Special Legal Consultant TechBA-Michigan 26200 Lahser Rd., Suite 170 │ Southfield, MI 48033 Tel. +1.248.233.2036 Cell. 248.828.5057 Email:
[email protected]