Volume 56, Number 7
by John A. McLees and Hector Reyes-Freaner
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
News Analysis: Mexico Weighs
Tougher Tax Treatment of
Maquiladoras
November 16, 2009
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
by John A. McLees and Hector Reyes-Freaner
Mexico is considering amendments to its maquiladora decree to impose new conditions on the ability of
a substantial number of maquiladoras and their foreign
affiliates to benefit from protections from income tax
and single-rate tax exposure that are now available to
all maquiladora operations that operate under a consignment manufacturing arrangement between the maquiladora and the foreign company.
The changes that are reported to be under consideration would eliminate the ability that these maquiladoras have always had to implement consignment
manufacturing without unacceptable tax exposures in
Mexico, and would impose those exposures on maquiladoras and their foreign affiliates in that group that
have already implemented consignment manufacturing.
An equally important concern for all maquiladoras
is the possibility that these changes could call into
question Mexico’s compliance with its agreement with
the United States to grant a PE exemption to all U.S.
companies that enter into a consignment manufacturing arrangement with a maquiladora and satisfy agreed
standards for compensating the maquiladora for its
processing services.
Exports account for a large portion of the manufacturing sector in Mexico, and the vast majority of export manufacturing is conducted by Mexican companies known as maquiladoras or maquilas, which
operate under temporary importation programs, known
as maquiladora programs, issued under Mexico’s maquiladora decree (now also known as the Decree for the
Development of the Manufacturing, Maquiladora and
Export Services Industry, or IMMEX Decree).
Mexico recognizes that export manufacturing is
highly mobile and has sought to encourage multinational companies to locate their export manufacturing
operations in Mexico. Tax relief granted to maquiladora operations has always been an important means
by which the Mexican government has attempted to
attract and keep export manufacturing. A maquiladora
program is essentially a tax program that allows a
TAX NOTES INTERNATIONAL
maquiladora to import goods and equipment temporarily without paying VAT and, in the case of goods,
without paying custom duties.
Typically, but not always, maquiladoras undertake
their manufacturing activity through consignment
manufacturing arrangements, under which a foreign
company (usually a U.S. company) pays an affiliated or
unaffiliated maquiladora to manufacture products
owned by the foreign company, using equipment
owned by the foreign company that is made available
for use by the maquiladora without charge.
Mexico has granted special tax relief to maquiladoras that operate in that way, as well as protection
from Mexican tax exposures to the foreign parties that
participate in consignment manufacturing operations
with a maquiladora.
Apart from the relief from VAT and customs duties
on temporary importation under a maquiladora program and the relief from VAT on maquiladoras’ invoices to foreign parties for the processing services,
special tax rules and protections for maquiladoras and
their foreign affiliates are set forth in:
• the Mutual Agreement on Maquiladora Taxation
entered into between the United States and
Mexico in 1999;
• the provisions of the income tax law that implement Mexico’s commitments under the mutual
agreement and apply them to U.S. companies and
other foreign companies; and
• the presidential decrees that Mexico issued in October 2003 regarding the Mexican income tax
treatment of maquiladoras, and in November
2007 to moderate the burden of Mexico’s new
single-rate tax on export manufacturing operations
conducted by maquiladoras.
By their terms, these tax laws and the mutual agreement grant those protections and benefits to all maquiladoras (that is, to all companies that conduct their
manufacturing operations under maquiladora programs
granted under Mexico’s maquiladora decree) and to
the foreign companies that enter into consignment
manufacturing arrangements with maquiladoras.
Possible Changes
Mexico is considering the elimination of these tax
protections for a substantial number of maquiladora
operations that do not, and in many cases could not,
NOVEMBER 16, 2009 • 1
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
News Analysis: Mexico Weighs
Tougher Tax Treatment of
Maquiladoras
HIGHLIGHTS
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
2 • NOVEMBER 16, 2009
TAX NOTES INTERNATIONAL
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
The objective of the proposed
new requirements would be to limit
the ability of maquiladoras that
previously operated as PITEX companies from entering into consignment manufacturing arrangements
and to force at least some of them
to continue to engage in buy-sell
operations, with the Mexican company owning the equipment used in
its operations. Depending on the
details of any new requirements,
that could have the effect of penalizing former PITEX companies and
their U.S. affiliates that adopted
consignment manufacturing in reliance on Mexico’s invitation to do
so when it amended the maquiladora decree in 2006, if those companies could not meet the new requirements.
Newscom
According to some reports, the
new conditions would also apply to
What effect will the proposed amendments have on the millions of workers in
new maquiladoras — those with
Mexican maquiladora operations?
maquiladora programs approved
since the maquiladora decree was
amended in November 2006 that
meet certain new conditions regarding the origin of
have structured their operations to utilize consignment
their inputs or the ownership and past ownership of
manufacturing in reliance on the current rules.
the equipment they use in their operations.
Mexico would attempt to implement these changes
by characterizing those Mexican companies, all of
Specifically, according to reports that have surfaced
which now operate under a maquiladora program, and
recently, Mexico is seriously considering amendments
all of which now constitute maquiladoras for all purto its maquiladora decree that could prevent maquilaposes, as not constituting maquiladoras solely for cerdoras that do not meet the new requirements from entain tax purposes unless they meet new requirements
joying the income tax and single-rate tax benefits that
regarding the current and prior ownership of the equipapply to maquiladoras under Mexican law and that
ment they use in their operations. This would deprive
could prevent U.S. companies and other foreign comthe U.S. companies that deal with maquiladoras that
panies that engage in consignment manufacturing ardon’t meet the new conditions of the protection from
rangements with those maquiladoras from benefiting
having a PE in Mexico, which Mexico has agreed with
from the existing exemption from Mexican income tax
the United States to provide to all such U.S. companies
or single-rate tax liability that would result from having
that meet the standards set forth in the mutual agreea permanent establishment in Mexico.
ment for the amounts they pay to maquiladoras for
their processing services.
The new conditions reportedly would include reOther proposed amendments to the maquiladora
strictions on prior ownership by the maquiladora of
decree would attempt to recharacterize other compathe equipment that the foreign company is making
nies that now operate under a maquiladora program
available to the maquiladora for use in its operations.
and that therefore constitute maquiladoras for all purThe purpose of those restrictions would be to address
poses, as not constituting maquiladoras solely for tax
Mexican tax authorities’ concerns about Mexico’s acpurposes if a majority of the inputs owned by the fortions in November 2006 in (1) repealing Mexico’s other
eign party was locally sourced in Mexico. These protemporary importation regime for export manufacturposed changes would be intended to prevent the tax
ing operations (the so-called PITEX decree) and (2)
benefits described above from applying to maquiladora
causing all of the companies previously operating unoperations that are engaged in agricultural production
der PITEX programs granted under that degree instead
in Mexico.
to be granted temporary importation programs under
the maquiladora decree, thereby converting those comThe reports that have surfaced recently also suggest
panies into maquiladoras (also known as IMMEX
that the new rules could exclude certain services maqcompanies).
uiladoras from the maquiladora tax regime, potentially
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
including those dedicated to supply and distribution,
storage and warehousing, design centers, call centers,
and so on.
There are several reasons, from a Mexican perspective, to question the wisdom of the proposed amendments to the maquiladora decree.
It appears likely that the changes would severely
penalize some maquiladoras that have relied on current
Mexican law in converting their export manufacturing
operations into consignment manufacturing. If the proposed changes are adopted, those companies would be
forced to restructure their operations again to eliminate
or curtail their use of consignment manufacturing in
order to avoid PE exposure for the U.S. company and
the imposition of single-rate tax on the maquiladora in
an amount that could exceed 50 percent of its taxable
income for income tax purposes.
Treating existing manufacturing operations fairly,
and maintaining a reputation of treating them fairly, is
of primary importance in preserving Mexico’s ability
to attract and keep export manufacturing operations.
Whether or not the restrictions would be subject to a
challenge as a retroactive imposition of changes in the
tax law, most companies would consider it unfair to
change the implications now for transactions that companies have engaged in during the past several years,
regardless of whether the changes affect them directly.
The proposed changes would also deprive all maquiladoras that were formerly PITEX companies of the
alternative that they have always enjoyed, before and
since the repeal of the PITEX decree in 2006, to utilize
consignment manufacturing arrangements under a
maquiladora program. Prior to the repeal of the PITEX decree, many PITEX companies did exactly that
by individually obtaining a maquiladora program and
cancelling their PITEX programs. The ability to do
that routinely, and thereby to make use of consignment
manufacturing operations under the protection of a
maquiladora program, has enabled Mexico to retain
export manufacturing operations in sectors such as the
automotive sector in companies that were originally
structured as PITEX companies after it no longer made
sense from a financial perspective to be structured that
way.
It is in Mexico’s interest to provide such companies,
which may have utilized the PITEX program without
full consideration of its limitations, the flexibility to
implement changes that will optimize global costs
through the use of consignment manufacturing. This is
what Mexico has done, and this is the policy that it
now proposes to abandon.
Restrictions on the use of domestic inputs could
also disrupt the existing programs of manufacturing
maquiladoras to diversify the sources of their inputs to
include more Mexican-source inputs. Indeed, restricting
TAX NOTES INTERNATIONAL
the use of Mexican inputs by maquiladoras engaged in
export manufacturing would be contrary to Mexico’s
long-standing policy of promoting the use of materials
and components acquired from Mexican suppliers in
export manufacturing in order to promote the growth
of the manufacturing sector. Companies are gradually
beginning to respond by searching for Mexican suppliers that can fulfill their needs, and Mexico should be
careful not to discourage those efforts.
Similarly, the exclusion of services operations from
the maquiladora tax regime could undermine Mexico’s
drive to attract services such as engineering and design
because it could subject such operations to a level of
single-rate tax that is equal to a large percentage of the
taxable income they recognize for income tax purposes.
Potential U.S. Tax Implications
The proposed changes should be of concern to all
maquiladoras and their foreign affiliates, not just to
those being targeted by the proposed changes, because
of the questions that those changes could raise about
the continuing application of the mutual agreement
and, in particular, the continuing application of the
agreement of the United States to allow U.S. companies to deduct the entire amount of the payments they
make to maquiladoras for their processing services.
This is because the changes could call into question
Mexico’s compliance with its commitment to the
United States under the mutual agreement to grant a
PE exemption to U.S. companies that enter into consignment manufacturing arrangements with maquiladoras generally, without exceptions such as those that
Mexico is now considering.
Mexico’s agreement to grant that PE exemption to
U.S. companies is the quid pro quo for the agreement
of the United States, under the terms of the mutual
agreement, to grant a tax deduction for the full amount
of the payments that Mexico now requires foreign
companies to make to maquiladoras, which the United
States would not do in the absence of the mutual
agreement. Thus, any failure by Mexico to comply
with the obligations it has undertaken under the terms
of the mutual agreement would raise the question of
how the United States would respond in the future in
implementing its agreement to allow a full deduction
for the amounts that a U.S. company pays to a maquiladora for its processing services.
The new rules that Mexico appears to be considering would not change the requirements for obtaining a
maquiladora program or operating under a maquiladora program (that is, the requirements for being a
maquiladora). Nor would the new rules place new conditions on the circumstances in which companies can
operate as maquiladoras and obtain the VAT and customs benefits for temporary imports of goods and
equipment. Thus, the proposed changes would not in
NOVEMBER 16, 2009 • 3
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
Mexican Concerns
HIGHLIGHTS
HIGHLIGHTS
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
This result is not changed by Mexico’s attempt to
implement its restrictions by redefining some maquiladoras as not being maquiladoras solely for tax purposes. It has been said that a rose is a rose is a rose.
Similarly, nothing in the mutual agreement or in the
provisions of the Mexican income tax law that implement the mutual agreement in any way contemplates
that Mexico could arbitrarily redefine some maquiladoras as not being maquiladoras solely for certain tax
purposes (that is, solely for the purpose of depriving
them of the tax benefits granted to all maquiladoras
under Mexican law and depriving the foreign companies dealing with those maquiladoras of the PE exemption that Mexico has agreed to provide under the mutual agreement). Thus, attempting to make such a
distinction between one maquiladora and another for
the sole purpose of depriving a substantial portion of
maquiladora operations of the treatment now accorded
to all maquiladora operations would call into question
Mexico’s compliance with the mutual agreement, specifically with the conditions that Mexico agreed to
meet in exchange for the agreement of the United
States to allow a shift of taxable income from U.S.
companies to their affiliated maquiladoras so as to be
taxed in Mexico instead of in the United States.
This is a serious concern for all maquiladoras, regardless of the nature of the additional requirements
that Mexico would impose on some, but not all, maquiladora operations as a condition for obtaining the PE
exemption. It would be a more serious concern if the
specific requirements were defined in such a way that it
would be difficult as a practical matter for maquiladoras that were once PITEX companies to meet the
new requirements or if the rules are drafted in a way
that would directly affect the operations of maquiladoras that are not among those that Mexico is seeking
to target with the new restrictions.
Current Status of the Proposals
According to a bulletin released by the National
Council of Maquiladora Associations, the Mexican tax
authorities have submitted or will soon submit a final
text of the proposed changes to the Federal Regulatory
Improvement Commission for consideration. Interested
parties will want to obtain the text of those changes
and to register their comments and concerns with the
commission.
4 • NOVEMBER 16, 2009
Background
Development of the Maquiladora Tax Regime
Allowing maquiladoras to import goods and equipment without the payment of VAT — and in the case
of goods, without the imposition of custom duties —
and exempting payments to maquiladoras for their processing services from VAT continue to be the primary
functions of the maquiladora decree and related provisions of the VAT law applicable to maquiladora operations. Export manufacturing operations still rely primarily on imported raw materials, components, and
equipment, and this temporary importation regime allows that to happen without excessive tax burdens that
could cause companies to locate their export manufacturing operations elsewhere.
The second important tax issue for export manufacturing in Mexico is the need to protect the foreign
companies themselves from Mexican tax exposure.
Most maquiladora operations have been conducted as
consignment manufacturing, with a foreign company
paying an affiliated or unaffiliated maquiladora to
manufacture products owned by the foreign company
using equipment owned by the foreign company and
made available to the maquiladora on free bailment. It
would be unacceptable to U.S. companies and most
other foreign companies to be subject to Mexican tax
on a portion of the income they earn from selling
products that an affiliated or unaffiliated party has
manufactured in Mexico, on the grounds that the foreign company has a PE in Mexico.
Therefore, in 1999 the United States and Mexico
took the extraordinary step of entering into the Mutual
Agreement on Maquiladora Taxation, under which
Mexico agreed not to impose income tax on a U.S.
company that enters into a consignment manufacturing
agreement with a maquiladora if the U.S. company
pays a higher than normal price to the maquiladora for
its processing services, under standards set forth in the
agreement. In exchange for that commitment from
Mexico, the United States agreed to allow U.S. companies to deduct the full amount of those higher payments for U.S. income tax purposes. (For prior coverage, see Doc 1999-35170 or 1999 WTD 211-1.)
In 2002 Mexico enacted those standards into law as
the conditions under which Mexico will grant a foreign
company that enters into a consignment manufacturing
arrangement with a Mexican maquiladora company an
exemption from being subject to income tax in Mexico
on the grounds that it has a PE in Mexico. These rules
apply to all consignment manufacturing operations involving maquiladoras. (For prior coverage, see Doc
2003-2326 or 2003 WTD 17-13.)
Mexico has also recognized that it is in a global
competition with other countries that provide favorable
tax treatment to local companies engaged in export
manufacturing. Therefore, in October 2003, under a
TAX NOTES INTERNATIONAL
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any way alter Mexico’s obligation under the mutual
agreement to provide a PE exemption equally to U.S.
companies that enter into consignment manufacturing
operations with maquiladoras that were once PITEX
companies, or whose maquiladora program was approved after October 2006, or that make use of domestic inputs. Therefore, if Mexico were to adopt these
changes, it would be breaching its obligation under the
mutual agreement to provide the PE exemption to U.S.
parties dealing with those maquiladoras.
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
Mexico’s imposition of its new single-rate tax,
which went into effect at the beginning of 2008, created another major tax issue that could have impaired
Mexico’s competitiveness in attracting and retaining
export manufacturing operations by imposing tax equal
to 50 percent more of the income tax base of a manufacturing company operating under a consignment
manufacturing arrangement if it was required to use
the normal tax base defined under the single-rate tax
law. (For prior coverage, see Doc 2007-21322 or 2007
WTD 190-7.)
Mexico resolved that problem for maquiladoras in a
presidential decree issued in November 2007. Under
that decree, only maquiladoras may apply the singlerate tax at a combined rate of 17.5 percent (17 percent
in 2009) to a specially defined amount that is close to
their income tax base. (For prior coverage, see Doc
2007-25250 or 2007 WTD 224-2.) These special rules for
maquiladoras maintain the total income tax and singlerate tax burden for maquiladoras at a rate significantly
below the normal income tax rate of 28 percent (which
will go up to 30 percent for 2010 through 2012 under
legislation recently approved by the National Congress), while significantly increasing Mexico’s tax collections from maquiladoras from what they were before
the enactment of the single-rate tax.
Tax Collections From Maquiladoras
The special tax regime that Mexico has implemented for maquiladora operations increases Mexico’s
tax revenues in several ways.
First, by reducing uncertainty and eliminating unacceptable tax exposures for the foreign companies, the
special rules enable Mexico to collect income tax and
single-rate tax from companies that would not otherwise have located or expanded their operations in
Mexico, as well as payroll taxes that it would not otherwise collect from the Mexican individuals whom
those companies employ. The protection that the current tax regime provides for a foreign company to engage in consignment manufacturing with its maquiladora is particularly important for companies in the
automotive sector and for other companies with losses.
Those companies would have an incentive to curtail
their operations in Mexico and either keep more of
them at home or put them in countries with more favorable income tax regimes if the only acceptable way
to operate in Mexico was to allow a Mexican affiliate
to operate as a buy-sell company and pay additional
Mexican income tax that, for such a U.S. company,
would be an extra cost.
TAX NOTES INTERNATIONAL
Second, the direct effect of the mutual agreement
and the rules implementing it is to increase the income
tax paid by Mexican maquiladoras by increasing payments to them for their processing services from what
the United States would otherwise allow a U.S. company to pay under a consignment manufacturing arrangement without losing a part of its deductions for
those payments. That, of course, benefits Mexico.
Third, during periods such as the current period in
which firms are losing money on their global operations, meeting either of the alternatives set forth in the
mutual agreement and Mexican law for determining
payments to a maquiladora for its manufacturing services causes the maquiladora to continue to have taxable income even when the global group is losing
money. Otherwise, such companies could in many
cases justify transfer pricing policies that would shift
losses to the Mexican company, thereby reducing
Mexico’s tax revenues in the current year and future
years.
Fourth, the Mexican tax authorities have most likely
not taken into account the significant additional income tax revenues that Mexico receives from maquiladoras operated by profitable U.S. companies with
capital-intensive operations as a result of the unique
tax regime provided under the mutual agreement. In
that agreement, the United States and Mexico agreed
to allow companies to choose each year between satisfying special transfer pricing rules or meeting the safe
harbor alternative of paying the maquiladora enough
that its taxable income will be no less than 6.9 percent
of the value of all assets used in its operations. Because of the favorable tax rates and single-rate tax protection that maquiladoras enjoy, profitable U.S. companies with capital-intensive operations in Mexico often
choose the safe harbor alternative. That can greatly
increase the taxable income of the maquiladoras and
the total Mexican tax collections from such operations
from what they would be without the special maquiladora tax regime. That has also been a factor in the decision of several profitable U.S. companies to locate or
expand their maquiladora operations in Mexico.
Taking these factors into account might cause the
Mexican tax authorities to moderate their views about
the net impact of the maquiladora tax regime on tax
collections in Mexico.
Mexico should also consider the extent to which an
effort to curtail the transformation of maquiladoras
that were once PITEX companies to consignment
manufacturing under their maquiladora programs
would itself have a detrimental impact on Mexico’s
total tax collections. That will be the result if limiting
their historical freedom to restructure their operations
in that way causes some companies to curtail the operations that they would otherwise locate in Mexico,
by for the first time forcing them either to stay in a
cost structure that is untenable for them in the current
business environment or to establish an entirely new
NOVEMBER 16, 2009 • 5
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
presidential decree that remains in effect, Mexico reduced the income tax rate applicable to maquiladoras
on income they earn from their manufacturing activities if they engage in consignment manufacturing. This
special income tax rate applies to all maquiladoras, and
only to maquiladoras.
HIGHLIGHTS
HIGHLIGHTS
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
Maquiladoras That Were Once PITEX Companies
It was largely a historical accident that Mexico had
maintained two separate temporary importation programs under two separate decrees, and by 2006 the
trade rules for PITEX programs and maquiladora programs had evolved to the point that they were virtually
identical. What was clear, however, was that only companies with maquiladora programs granted under the
maquiladora decree benefited from the tax rules discussed above. The mutual agreement and Mexican law
expressly tie the tax rules discussed above to companies that operate under temporary importation programs issued under the maquiladora decree. PITEX
companies did not benefit from those rules. The only
tax benefits they received were from the temporary importation program itself (namely relief from VAT on
temporary imports of goods and equipment and from
customs duties on the temporary importation of goods
for use in the manufacturing operations).
Companies operating under a PITEX program uniformly did not operate as consignment manufacturers,
though there was no restriction on their operating in
that way. The reason they did not was because, in the
absence of the statutory PE exemption for the foreign
company operating in that way with a PITEX company, the foreign company itself would have been exposed to an unacceptable risk of being subject to Mexican tax on the grounds that it had a PE in Mexico.
It was never difficult, however, for a PITEX company that wanted to operate as a consignment manufacturer under a maquiladora program to do so by simply obtaining approval of a maquiladora program,
which it could obtain quickly and routinely, and canceling its PITEX program. Many companies took this
administrative step and thereby became legally entitled
to the PE exemption and other tax rules applicable to
maquiladora operations that allowed them to implement consignment manufacturing.
By repealing the PITEX decree and granting maquiladora programs en masse to all companies that had
previously operated under PITEX programs, rather
than requiring them to obtain maquiladora programs
routinely one by one, Mexico caused all those companies to be maquiladoras for all purposes, including for
6 • NOVEMBER 16, 2009
purposes of the mutual agreement, the Mexican income tax law, and the decree governing the income tax
rates applicable to maquiladoras. (For prior coverage,
see Doc 2006-16477 or 2006 WTD 172-9.) Later, all maquiladoras, including former PITEX companies and
maquiladoras whose programs were approved after November 1, 2006, benefited from the decree issued in
November 2007 allowing all maquiladoras, and only
maquiladoras, to use their income tax base in computing their single-rate tax liability.
Since November 2006, this situation has been uniformly recognized by Mexico’s tax authorities and by
the United States, and companies have relied on it in
structuring their operations and filing their tax returns
in Mexico and the United States. Since then former
PITEX companies and other maquiladora companies,
old and new, have relied on their legal right to engage
in consignment manufacturing operations and related
transactions and to benefit from the Mexican tax rules
applicable to such operations.
Of course, Mexico was not required to convert all
PITEX companies into maquiladoras, thereby subjecting them to the tax and trade rules applicable to maquiladoras, as it did in 2006. Nor is there anything stopping Mexico from prospectively placing uniform
conditions on which companies can obtain new temporary importation programs as maquiladoras in the future, or other uniform conditions that all maquiladoras
must satisfy, whether or not it would be wise to do so.
That should not violate Mexico’s obligations under the
mutual agreement with the United States. That does
not, however, mean that once Mexico has decided to
grant a maquiladora program to a company and to
treat it as a maquiladora, it can by sleight of hand
claim that it is not a maquiladora solely for purposes
of denying it and its foreign affiliate the benefits of tax
rules that are applicable under the law to all maquiladoras and to the foreign companies that contract with
them for manufacturing services under a consignment
manufacturing arrangement.
It is important to recall that versions of this same
idea of manipulating the definition of maquiladora
only for some maquiladoras solely for tax purposes
were considered and rejected back in November 2006,
when the maquiladora decree was amended and renamed the maquiladora decree in connection with the
repeal of the PITEX decree and the transformation of
all former PITEX programs into maquiladora programs. The explicit consideration and rejection of
those alternatives at that time reinforced the understanding of maquiladoras and their foreign affiliates
that they could rely on the tax rules applicable to maquiladoras under Mexican law and the mutual agreement. It is this reliance that Mexico would now undermine by changing the rules for companies that have
implemented consignment manufacturing in the meantime and that do not meet new requirements that
TAX NOTES INTERNATIONAL
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
maquiladora operation. The loss of an export manufacturing operation results in the loss of payroll tax revenue as well as the loss of revenue from income tax,
single-rate tax and VAT.
In any event, Mexico does not want to jeopardize
the flow of new companies setting up maquiladora operations in Mexico by pulling the rug out from under
companies that have relied on the current tax rules, nor
does it want to jeopardize the U.S. tax benefits flowing
to U.S. companies from the mutual agreement by raising questions about whether Mexico is complying with
the obligations that it undertook under the terms of the
mutual agreement.
HIGHLIGHTS
Reprinted from Tax Notes Int’l, November 16, 2009, p. 491
Mexico would impose on the origin of their inputs or
the ownership of the equipment used in their operations.
Ironically, Mexico may not at this point have a
strong desire to tax the foreign companies on the
grounds that they have a PE in Mexico. Mexico’s primary objective may instead be to limit the number of
companies that are eligible for the lower income tax
rate. If so, Mexico might be well advised to concentrate directly on that issue (holding aside the question
whether it would be wise to place new conditions on
obtaining the benefits of that rule).
Having chosen for whatever reason to grant maquiladora programs to all former PITEX companies three
years ago, it would be difficult for Mexico to unscramble that egg and achieve its objectives through
general restrictions only on some maquiladoras without
harming its competitive position in attracting and retaining export manufacturing operations or violating
the terms of the mutual agreement and the protections
that taxpayers have under Mexican law against inconsistent treatment or retroactive changes in the tax law.
Mexico is well aware of the tax enforcement tools it
has at its disposal to audit any restructuring transactions that companies have undertaken before or after
November 2006, and it would be well advised to rely
instead on that authority to achieve its objectives. Like
other Mexican companies, maquiladoras are subject to
audit as to whether any sales of equipment to an affiliate were at arm’s-length prices, whether their ongoing
intercompany transfer prices comply with Mexico’s
transfer pricing rules, or whether there were transfers of
intangible assets from a Mexican company to a foreign
company that the taxpayer did not acknowledge. The
Mexican tax authorities have been vocal about the
need to scrutinize any business restructuring, such as
the implementation of consignment manufacturing by
a company that currently operates under a different
business model, and to tax the company on any transfer of an intangible to a foreign party that occurs as a
result of the restructuring.
The problem that Mexico faces in that regard is that
most maquiladora restructurings may not be subject to
attack under normal tax rules because the restructuring
of export manufacturing operations often does not involve any transfers of an intangible that could justify
the imposition of a tax deficiency and because maquiladoras that have restructured their operations are usually careful to adopt conservative transfer pricing policies. It would, however, be difficult to justify the
imposition of new and potentially retroactive limitations on the application of the generally applicable tax
TAX NOTES INTERNATIONAL
Summing Up
Mexico has maintained a favorable tax regime for
export manufacturing operations under its maquiladora
program through the years despite its many tax law
changes. At the same time, it has streamlined some
aspects of its maquiladora program, and it appears to
be open to further refinements that will make life easier
for foreign companies wishing to establish or expand
their export manufacturing operations in Mexico.
The Mexican administration reaffirmed the importance of maintaining a favorable tax regime for maquiladoras and sustaining its commitment to foreign investors when it issued the presidential decree in November
2007 that protects maquiladoras from a large increase
in their tax burden under the single-rate tax, while ensuring that Mexico will collect income tax and singlerate tax from maquiladoras at a combined rate of 17.5
percent (17 percent in 2009) on a base that is close to
being equal to its income tax base.
Mexico should stick to that policy and not make
changes for many maquiladoras in the tax treatment
that has always been available to them — and that
some have counted on in structuring their current operations — in a way that would call into question
Mexico’s past commitments and future reliability.
Mexico can instead rely on its existing tax rules to
moderate any tendency to engage in aggressive restructuring and to audit positions that some taxpayers may
take in violation of Mexican law.
◆
♦ John A. McLees is a partner with Baker & McKenzie in
Chicago, and Hector Reyes-Freaner is a principal tax adviser
and coordinator with the Mexican tax practice of Baker &
McKenzie in Mexico City.
NOVEMBER 16, 2009 • 7
(C) Tax Analysts 2009. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
What Can Mexico Do?
rules to a taxpayer that has complied with applicable
law in implementing a restructuring of its operations in
Mexico, especially if the new limitations could call into
question Mexico’s compliance with its obligations under the mutual agreement.
In any case, Mexico’s new single-rate tax generally
applies to the gross amount of the proceeds of a maquiladora’s sale of its equipment. That already has the
effect of either deterring overly aggressive transactions
or taxing them, and has had that effect since January
1, 2008. This additional tax is either an existing tax
cost for restructuring a former PITEX operation to operate under a consignment manufacturing arrangement
or a strong tax incentive to limit the scope of such a
restructuring in a way that allows Mexico to continue
to collect a more substantial amount of tax from the
maquiladora under the transfer pricing method that
Mexico can require a foreign company to apply in
compensating a maquiladora that owns a substantial
amount of physical assets.
Cambios fiscales frenarán al crecimiento: especialistas. | Diario.com.mx
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Cambios fiscales frenarán al
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Gabriel Simental
El Diario | 06-11-2009 | 22:15 | Economía
Empresas, trabajadores y sociedad en general enfrentarán una difícil
situación económica el próximo año debido a las condiciones
impuestas por el Paquete Económico que recientemente acaba de
aprobar el Congreso, de acuerdo a analistas fiscales, industriales y
economistas.
“Si a la industria maquiladora se le diera la certidumbre jurídica en
materia fiscal y los apoyos necesarios para su desarrollo, tendería a una
recuperación más rápida del empleo”, dijo Sandra Montijo Dubrule,
vicepresidenta del Consejo Nacional de la Industria Maquiladora y
Manufacturera de Exportación (CNIMME), el sector económico más
importante en materia de empleo para la ciudad.
Expuso que hay países que están atrayendo fuertemente la inversión
extranjera precisamente por sus bajas tasas impositivas, y que en ese
terreno México está en desventaja porque la carga fiscal se acaba de
incrementar con la aprobación del Paquete Económico 2010.
“El crecimiento de China ha sido rápido porque el Gobierno otorga
estímulos fiscales a la industria, cosa que no ha sucedido aquí”, afirmó.
Luis Carbajo Martínez, analista fiscal de la firma Baker & Mckenzie,
manifestó que la operación de las empresas y las finanzas familiares se
verán afectadas por el incremento de 2 por ciento de la tasa del ISR y
de 1 por ciento del IVA a partir del próximo año.
“El ISR incidirá en inhibir las inversiones y la creación de empleos,
porque el país ya no será tan competitivo hasta el 2009 cuando la tasa
de ISR era de 28 por ciento”, comentó.
Por su parte, Erika Donjuan Callejo, director del despacho Asesoría
Económica y Marketing, dijo que la política fiscal que acaba de
aprobarse es totalmente restrictiva que impactará en el nivel de
consumo de la gente, ya que a más impuestos menor ingreso disponible
de las familias.
Consideró que el próximo año no habrá ninguna recuperación
económica para la población asalariada porque verá mermado su poder
adquisitivo ante el encarecimiento de los productos por un mayor
proceso inflacionario que se espera.
Crédito Infonavit
Braxton Tax & Law
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México, 28 Oct (Notimex).- La única vía para recaudar
el déficit de 300 mil millones de pesos que
actualmente reporta el erario público, derivado de la
caída en la producción y exportación de crudo, es a
través de impuestos indirectos, coincidieron fiscalistas
de las firmas Baker and McKenzie y Ernst & Young.
En opinión de Luis Carbajo, especialista de Baker and
McKenzie, la única forma de aumentar la base
gravable es a través de impuestos indirectos, como el
de la pobreza de 2.0 por ciento que propuso el
Ejecutivo.
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Además de que el gobierno federal debe nivelar el
gasto público a través de la reducción del gasto
corriente. Sin embargo, en la Cámara de Diputados,
dijo, se ve complicado recuperar la discusión sobre los
impuestos indirectos.
Sobre el tema, este miércoles el secretario de
Hacienda comparece en el Senado de la República.
En este sentido, el presidente de la Comisión de
Energía de la Cámara de Diputados, el panista Felipe
de Jesús Cantú, expuso que ante la evidente
declinación en la producción de Pemex, el erario
público enfrenta problemas por la dependencia de los
recursos captados a través de la venta de crudo.
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Enfatizó que las alternativas de inversión en Pemex
rendirán frutos dentro de ocho o 12 años, "es decir,
que lo que se está autorizando invertir en el año 2010
tendrá resultados entre 2018 y 2022, lo que nos
obliga a tener una verdadera política de Estado".
Para Eduardo Peralta Chamarro, socio del área de
impuestos de Ernest & Young, el impuesto contra la
pobreza fue lo más "inteligente" que había propuesto
el gobierno federal, desde el punto de vista técnico.
MÁS NOTICIAS
Lea más en invertia
PIB de México caerá entre 6% y 7% en tercer
trimestre, estima Banco Central
Grupo Modelo asegura que seguirá de lider haga
lo que haga Femsa
Noyer de BCE dice tipo cambio euro/dlr no es
principal problema
Peso mexicano pierde 0.38 pct en precio final del
banco central
Revisaría Banxico al alza inflación 2010 entre 4%
y 4.5%
LOS ARTÍCULOS MÁS CONSULTADOS
Título
Listan empresas que presuntamente no pagan impuestos
"El Gobierno no tiene llenadera", Salinas Pliego
Impuestos indirectos y mayor ajuste al gasto, las
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Columnas financieras: el temor a la vacuna
Senado discute hoy IVA, IDE e ISR
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"Honestamente pienso que el camino correcto y la
propuesta más inteligente que estaba sobre la mesa
era lo de la contribución del 2.0 por ciento, porque el
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impuesto indirecto es más fácil de recaudar, de
controlar y que se reparte entre toda la población".
Aquí, dijo, el punto es que se debe hacer un análisis
técnico de la situación y no uno político, porque muy
pocos mexicanos pagamos impuestos y por otro lado,
los políticos temen ampliar la base de recaudación, y
propuso revivir la propuesta una vez que el paquete
regrese a la Cámara de Diputados.
Comunidades
Escríbenos
Foros
Ese impuesto ampliaría la base gravable en el país,
pero tendría que sumarse un mayor recorte en el
gasto corriente y aumento del déficit.
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Señaló que para cubrir ese "boquete fiscal" que
aparecerá en el gobierno federal por la falta de
recursos provenientes del petróleo "se tiene que hacer
un trabajo más a fondo de una reducción sustancial
en el gasto".
Por ejemplo, hay cuestiones federales y estatales en
donde aún se puede hacer algo, como es en la
duplicidad de servicios en los estados y el país, tal es
el caso de las secretarías de Turismo en cada entidad
e instituciones de salud duplicadas como el IMSS, el
ISSSTE y los hospitales de la Secretaría de Salud.
Otra salida, añadió, puede ser ampliar el déficit en
donde, sin embargo, se tendría que tener cuidado de
obtener los recursos suficientes para pagar en el
futuro el dinero prestado.
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ÚLTIMOS COMENTARIOS
alquimena
Miércoles, 28 de Octubre de 2009
tb querem aumentar o imposto de renda ai en
Mexico,parece uam copia do Brasil
Reportar abuso
Rafael
Miércoles, 28 de Octubre de 2009
Y por que no dejan el impuesto del 2% pero sin gravar
medicionas y alimentos y disminuyen ese 2% a los
contribuyentes cautivos en el ISR? asi no fregarian a los
que ya nos friegan y harian contribuir a los que no lo
hacen,
Reportar abuso
Rafael
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