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Mexico Customs Procedures for IT Products and E-Commerce

Discussion of any issues related to importing to Mexico.

Mexico Customs Procedures for IT Products and E-Commerce

Postby bridgat » Mon Nov 17, 2008 12:31 pm

I. QUESTIONS ON SOFTWARE / RELATED SERVICES IMPORTS

A. Are duties and taxes assessed on the intellectual property of the software or
on the medium on which it is presented? Is customized software treated differently than packaged software?

There are not regulations specific to software. Regular import regulations apply to software imports.

Duties and taxes are assessed on the declared value of the medium, not the intellectual property, by the importer of record. The import duty is calculated on the U.S. plant value (invoice) of the product plus the inland freight charges and any other costs listed separately on the invoice and paid by the importer, such as export packing.

Imports of packaged and customized software are duty free but subject to a 15-percent Value Added Tax (VAT, or IVA in Spanish) of the CIF invoice value and the Customs Processing Fee (CPF). The CPF in Mexico is approximately US$13, and it is assessed on the invoice value. However, as of July 1, 1999, definitive imports with a certificate of origin from NAFTA countries are no longer subject to payment of the CPF.

The participation of a customs broker is not obligatory for imports if all legal and technical requirements are met. However, the participation of a customs broker is suggested when the exporter is not familiar with the Mexican standards and customs processing procedures.

Customized software is not treated differently than packaged software if a physical medium is involved. However, it is important to mention that customized software is often times considered under the category of consulting services. Consequently, there is no physical importation involved.

B. Custom duties and taxes for software updates.

Any update shipped at a later date than the original shipment is subject to the same import duties and VAT as any regular importation. If the original invoice and shipment clearly specifies that updates will be shipped later, but the cost of the updates is included in the invoice, the update shipment will still be subject to the VAT. It is common to include the cost for the updates in the original invoice and send the updates via Internet in order to avoid paying duties and taxes, but the importation must be declared in any case.

C. Harmonized system classification – licenses.
Software is classified under Harmonized System Code 8524.9101. The same import duties and taxes mentioned in A and B above apply if the licenses are not included in the original shipment and invoice.

D. License agreements violation.
If the software is registered with the Mexican Institute for Industrial Property (IMPI-Instituto Mexicano de la Propiedad Industrial), then there is a legal protection in Mexico, and the local law will apply in case of license agreement infringement. Note that registration with the IMPI is not mandatory. The IMPI has an ongoing inspection program, called “Zero Tolerance,” in which the IMPI confirms that users have the corresponding licenses.

E. Services related to the sale of software
Training, set-up, maintenance, or other services related to the sale of software are not subject to any type of tax unless an invoice is provided. If an invoice is provided, the local company is subject to the 15-percent VAT and an approximate 30-percent income tax (Impuesto Sobre la Renta – ISR).

There are no visas or work permits required for qualified U.S. solution providers to set up hardware/software related systems in Mexico.

F. Software delivered over the Internet
There is no special tax for software purchased/delivered over the Internet. The same import duties and taxes apply if the importation is registered with the Mexican authorities, even though the physical product is not presented. However, since there are no regulations to register software delivered over the Internet, this is not a common practice.

G. Laws to regulate Voice over Internet Protocol (VoIP)
At this time there are no laws that regulate VoIP. However, the Mexican Association for Information Technologies Industries (AMITI-Asociación Mexicana de la Industria de Tecnologías de Información) is discussing the possibility of drafting a bill to regulate all types of transactions over the Internet.




II. QUESTIONS ON CUSTOMS PROCEDURES RELATED TO IT PRODUCTS


A. Documentation requirement for the physical import of software and other IT products.

The sole document required for importing software is the Certificate of Origin.

The documentation requirements for the import of most IT products include:
- Certificate of Origin
- Labeling Requirements
- NOM Certification

The requirements and regulations for importing are still evolving under NAFTA. It is the responsibility of the importer to define what certificates are required and from whom to obtain them. The Mexican government strictly enforces all customs regulations, particularly when it comes to potentially under-valued Asian-origin goods.

CERTIFICATE OF ORIGIN: A certificate of origin is required from all foreign suppliers or exporters. If the product qualifies as North American in content, the exporter must use the NAFTA Certificate of Origin in order to benefit from preferential treatment under NAFTA. This document may be issued by the exporter or broker and does not have to be validated or formalized.

NOM CERTIFICATION: (Normas Oficiales Mexicanas - Mexican Official Standards). Mexico has mandatory standards, called NOMs, that certain products must meet. Most IT products are subject to NOM-019-SCI-94 (security requirements) and NOM-024-SCI-94 (commercial information, instructions, and guarantee criteria for electric and electronic products). Compliance with these standards must be demonstrated by all equipment and technologies by being tested in an accredited Mexican laboratory prior to importation, and a certificate of compliance must be obtained from the Ministry of Economy.

LABELING REQUIREMENTS: Information Technology products are required to have a label in Spanish. Listing the required information in Spanish on the shipping container will satisfy the labeling requirement. This labeling requirement is continuously evolving. The Spanish information on the box must contain, at a minimum, the following information:

- Name and address of the importer
- Importer's Ministry of Finance Taxation Number (RFC number and/or their Industry Association registration number)
- Exporter's name and address
- Trademark or commercial brand name of the product
- Product description whenever the product is packaged in such a form that it is not visible to the consumer
- Use, handling, and care instructions for the product, as required
- Country of origin

B. Documentation for products delivered over the internet
See I – F above.

C. Imports of refurbished computer hardware, parts and accessories.

Used or refurbished computer hardware equipment cannot be imported into Mexico.
Exemptions may apply for equipment that is NOT manufactured in Mexico. However, a previous import permit from the Ministry of Economy is required, which is extremely difficult to obtain and, from a practical standpoint, not a recommended approach. It should be noted that there are very few computer hardware products not already manufactured in Mexico, and thus very few products would qualify for an exemption.

Donations of used equipment are authorized if the proper documentation to prove the donation is submitted. Equipment to be donated also requires a previous import permit and needs to comply with the NOMs mentioned above. In practice, it is very difficult to meet the requirements for even donated used equipment.

Annex 3081 of the NAFTA states that the liberalization of used computer equipment may occur in 2004. That is, there is no obligation to liberalize the importation of used computer equipment. In fact, many industry analysts believe that the Mexican government will not liberalize this market in 2004 due to opposition of the many large computer manufacturers in Mexico.

Re-furbished toner cartridges can be imported into Mexico.

D. Imports of used computer hardware, parts and accessories.

Same as II- C.

E. Re-import of repaired computer equipment.

This process requires the services of a customs broker. When sending the equipment back to the United States, the customs broker will process a temporary “pedimento de exportación” (export permit), in which it must be clearly stated that the equipment will be repaired or substituted. This document must accompany the repaired or substituted equipment when entering Mexico. The equipment is subject to import duties and VAT assessed on the value of the repair service and not the equipment. If the equipment is covered by a guarantee program, a copy of the guarantee statement must accompany the equipment when it is returned to Mexico in order to avoid the imposition of import duties and VAT.

F. Must cross-border, electronically delivered software be accompanied by a physical shipment?
This is not a requirement for Mexico. Electronically delivered software is neither regulated nor tracked by any government agency in Mexico.
bridgat
 
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