Accounting & Taxes: Manufacturing Community Tax Services, Mexico

Tetakawi Accounting and Tax Services in Mexico

Compliance with tax and fiscal regulations laid out by Mexican federal, state, and local laws is one of the most important aspects of operating in Mexico. Accounting and taxes are labor-heavy tasks, taking more than 200 hours of a business’ time per year. This is primarily due to the need for in-person interactions with the state and the reliance on hard-copy documents. Mexico also requires a strict recording of transactions to properly trace all money, payments, and beneficiaries, which can get overwhelming.

Tetakawi offers Accounting and Tax Services that include assuming all fiscal liability and responsibility to properly comply with these Mexico tax regulations. Our expert Finance team custom software ensures that your reports are filed accurately, on time, and with the proper authorities.

Maquiladoras and Mexican Taxes

Operating a business in any foreign country requires an understanding of local taxes and how these could affect your company. For businesses considering manufacturing in Mexico, the first step is getting to know the maquiladora industry and the IMMEX program.

A maquiladora is a factory in Mexico owned by a foreign company that exports abroad out of the country. The IMMEX program is a program that allows maquiladoras to import manufacturing materials duty-free after certification is approved, which means that they would be exempt from paying a 16% value-added tax (VAT) on temporarily imported raw goods, materials, and equipment. However, it can take several weeks before approval is confirmed. At that time, the company still has to pay VAT. Partnering with a shelter company like Tetakawi allows the exemption to be applied from the first day of operations.

In addition to the cost-saving benefits of the IMMEX program, foreign manufacturers in Mexico can take advantage of several free trade agreements (FTAs) that incentivize companies to move their manufacturing to Mexico, such as the USMCA, EU-Mexico Association Agreement, and the Pacific Alliance—all of which eliminate a percentage of, if not all, tariffs.

Mexico is an ideal manufacturing base for different industries, so many foreign companies are moving their operations to Mexico. Still, maquiladoras must comply with other taxes and laws to operate legally in the country. Your business will need to comply with property, income, expat, and a variety of other business taxes when operating in Mexico. Accounting and tax services can ensure that you are filing your taxes properly and staying in compliance with Mexico's tax law.

Accurate Tax Calculation, Reporting, and Payment

Mexican Corporate Income Tax Compliance: All business operations in Mexico must pay income tax under Safe Harbor rules, Article 182 of the Mexican Income Tax Law or APA. This allows a business under the IMMEX program to report a taxable income of either 6.9% of the total value assets or 6.5% of operating costs, with the manufacturer paying 30% of whichever is higher. Our Finance teams calculate, report and pay the appropriate business income taxes.

Payroll Taxes: Employers in Mexico are required to share 10% of their fiscal profits with their employees. Companies like Tetakawi can help companies reduce the sharing percentage and substitute profit-sharing taxes with employee bonuses or another alternative. All payroll taxes at the State and Federal levels are calculated, reported, and paid in compliance with the laws and regulations of the Mexican Tax Authority (SAT), Mexico’s equivalent of the IRS.

Value-Added Tax (VAT) Reimbursements: VAT in Mexico, also known as IVA (Impuesto al Valor Agregad) on imported goods is usually 16% for manufacturers. However, companies under the IMMEX program can forego this, enjoying a 0% tax rate for goods exported out of the country as a finished product within a specified time frame. Our tax administration service prepares the application for reimbursement of the VAT levied on definitive imports and in-Mexico MRO purchases. They resolve any problems that may arise with the reimbursement of the VAT to ensure prompt reimbursement to our clients. Tetakawi is proud to maintain AAA VAT Certification, which allows you to receive timely reimbursement.

Timely Accounts Payable and Tax Management

The finance team manages accounts payable terms and conditions with vendors and suppliers. The service includes timely payments to vendors and suppliers for purchases made by the Clients.

Stay In Compliance with Statistical Reporting

Tax: The Mexican Tax Authority (SAT) requires an annual Informative Return for Manufacturing and Export Services (DIEMSE). This report details operational information such as compliance with transfer pricing provisions, financial and tax information, as well as reporting foreign trade relationships.

Statistics: The National Institute of Statistics and Geography (INEGI) collects and monitors geographic, demographic, and economic information. INEGI requires a monthly report on the value of imports, separating raw materials, packaging, and the value-added to the finished products.

Import/Export: The Office for Economic Affairs requires an annual report that identifies the total number of exports and sales during the year to maintain compliance with the IMMEX and PROSEC programs. Our tax administrative services can generate any necessary tax reports for your business operations in Mexico.

Benefit from Value Added Services

In addition to our tax calculation, reporting, and payment services, Tetakawi offers maintenance of permits and regulations for conducting business in Mexico, as well as management of internal and external regulatory audits related to governmental agencies, including treasury.