In 2014, the Mexican Customs and Tax Authority added Annex 24 (Anexo 24) to its Mexican Tax Reform, and in 2018, further provisions were made. The statute required that businesses manufacturing in Mexico employ automatized inventory control systems as a way to track goods that had been temporarily imported duty-free under the IMMEX decree (which were meant to be assembled and then eventually exported). 

So, today, if your company wishes to be a part of the IMMEX program, this tracking system needs to be in place, and its inventory control practices must be followed. 

But what does that mean for your business, and what are the penalties for noncompliance?  

Let’s find out.   

Anexo 24 & Annex 24 Inventory Control 

The IMMEX deal provides substantial financial benefits for companies that participate in the program. Of these, one of the largest economic draws is the duty-free and vat-free status temporary goods have. But, because it’s a place where companies can find significant cost savings, many are tempted to game the maquiladora system. 

By automating inventory controls in compliance with Anexo 24, both businesses and the government experience several tangible benefits, including: 

• Prevents businesses from lying about the status of goods
• Increased visibility over temporary imports
• Better tracking and accountability when goods are:
  • Transferred to other companies
  • Moved to a production line
  • Donated 
  • Altered  
• Correct order and management of imported goods
• Ability to apply for IMMEX status in modalities such as:
  • Service companies
  • Shelter companies
  • Industrial companies 
• IMMEX tax benefits so long as you are in compliance

Mexico’s IRS—the Servicio de Administración Tributaria (SAT)—has a secure electronic-filing mailbox system that was also added during the tax reforms to prevent fraudulent emails. Annex 24’s automated tracking system was purposefully built to integrate with this e-filer. This provides increased digital security since a digital stamp, and key encryption is marked on every audit and report. 

The automated system generates audits and reports composed of three primary tracking categories:

#1 Catalogs – These contain crucial taxpayer data, including:

• Key dates
• Transactions
• Financial assets
• Product details
• Providers
• Clients
• Subcontractors

 #2 Customs Modules – Covers information about temporary imports, including:

• Returns
• Transfers
• Route changes
• Exports
• Alterations
• Disposals

#3 System Reports – Details economic data and reports about how imported materials were used, and tracks fiscal assets of goods throughout the process. It consists of a collection of catalogs, files, modules, and other relevant documents. 

Annex 24 Obligations

Companies that have an IMMEX program are obliged to manage and carry out an inventory control system. To comply, your business must have a system that can:

• Track the discharges of both imported and exported goods and can do so for 18 months.
• Identify which imports were classified as “definite.”
• Record “inter-maquila transfers.”
• Generate the following reports:
  • Import
  • Export
  • BOM
  • Discharges
  • Open balance
• Control registry of both imported and exported goods.
• Indicate which materials were classified as scrap or waste and how they were disposed of. 
• Classify imported goods that were “non-originating.” 
• Designate goods that were disposed of as donations.

Penalties and Sanctions

Aside from the potential to be stripped of IMMEX status, according to Deloitte, noncompliance can result in the following penalties and sanctions:

• Article 185-B of the Customs Law – If the business does not comply with an automated and updated Inventory Control System, this will result in a tax penalty between $10,000 and $20,000.
• Articles 176 Fraction X, 177 Fraction VIII, and 178 Fraction IX of the Customs Law – If the company does not comply with paying the correct amount from import duties, this will result in a tax penalty (between 138% and 150% of the value of the goods).
• Article 178 Fraction III of the Customs Law – If a company imports prohibited goods, this would result in a tax penalty (between 70% and 100% of the value of the goods).

Although complying with these rules and requirements may take some time, investment, and prep work, it benefits your company in the long run. It allows you to take advantage of the various benefits of having maquiladora status. 

Working with NAPS 

Anexo 24 is just one of the many hurdles you’ll have to manage should you choose to set up shop in Mexico. But this shouldn’t dissuade you from moving south of the border. Instead, it means that you need to rely on an established business like NAPS to help you navigate complicated matters like this.    

For more than two decades, we’ve assisted hundreds of companies in successfully establishing manufacturing operations in Mexico. Today, we’re more prepared than ever to evaluate your business, locate the optimal venue for operation, and achieve your vision. 

Interested in seeing what NAPS can do for you? Reach out today to find out more. 

Sources:

• Aduanas. Annex 24 of the General Rules of foreign Trade for 2018. http://www.aduanas-mexico.com.mx/claa/ctar/leyes/anexo24.html
• Deloitte. Mexican Tax Update New Compliance Obligations for IMMEX. http://www.otaymesa.org/wp-content/uploads/2016/07/Plan-de-Crecimiento-26-05-16it-pptx-con-formato.pdf
• Integration Point. Q&A from Mexican Customs Audit Webcast. https://blogs.integrationpoint.com/en-us/home/34-mexican-regulations/774-qa-from-mexican-customs-audit-webcast.html