Automotive Articles


Mexico Agrees to Renegotiation of ACE 55 with Brazil; Now Faces Argentina

Following up on the article published in the previous edition on Economic Complementation Agreement No. 55 between MERCOSUR and Mexico (“ACE 55”), we reported that Mexico decided to agree to a renegotiation with Brazil. As a result, on March 19, 2012, Brazil and Mexico signed the Fourth Additional Protocol to Appendix II “On Commerce in the Automotive Sector between Brazil and Mexico” to ACE 55, agreeing to establish maximum quotas or limits on annual importations of lightweight automotive vehicles for the period from March 19, 2012 through March 18, 2015. Mexico chose to the ACE 55 Agreement and, as a result, allowed this restriction on free trade of automotive vehicles to continue, but establishing a direct assignment of import quotas … read more


The Department of Economy Proposes Amendments to the Automotive Decree

In order to support Mexico’s final automotive assembly industry, the Department of the Economy proposed a series of amendments to the Decree for the Support of the Final Automotive Assembly Industry’s Competitiveness and for the Stimulus of the Domestic Automobile Market (“Decreto para el Apoyo de la Competitividad de la Industria Automotriz Terminal y el Impulso al Desarrollo del Mercado Interno de Automóviles”) or Automotive Decree. The Automotive Decree, published on December 31, 2003, provides incentives to foreign automotive assembly companies operating in Mexico, so long such companies meet certain investment requirements, notably the annual production of at least 50,000 units within Mexico in order to maintain such incentives. The proposed amendment to the Automotive Decree, which is currently under … read more


Mexico’s Department of the Economy Publishes New Decree Establishing Requirements for Permanent Importation of Used Vehicles

On December 24, 2008, the Mexican Department of the Economy (Secretaria de Economía or SECON), published in the Official Journal of the Federation (Diario Oficial de la Federación or DOF) the new “Decree establishing conditions for the permanent importation of used vehicles” (the “Decree”). The Decree entered into force on January 1, 2009 and shall be effective until December 31, 2010. Such Decree nullifies previously published decrees from August 22, 2005 and April 26, 2006, unifying in one single decree the conditions applicable to the permanent importation of used vehicles into Mexico, including the border region and the country as a whole. The new Decree forms part of the measures implemented by SECON in order to modify Mexican customs rules … read more


Decree Issued Amending Tax Benefits for the Cargo and Passenger Transportation Industry

As part of the measures implemented by the Mexican federal government in the cargo and passenger transportation sector, as well as Official Mexican Norm NOM-012-SCT-2-2008 recently published in the Official Journal of the Federation and discussed in the April edition of the CCN Mexico Report titled, “New Mexican Regulation (NOM) on Maximum Weights and Measures for Trucks and Buses,” various decrees offering tax benefits to cargo and passenger transportation companies have been published in the Official Journal of the Federation. Substituting new vehicles for older equipment should have a direct impact on damages caused to Mexican highway infrastructure, and the new fiscal incentives consist of tax credits equivalent to the lower amount of: (a) the price received for selling used … read more


New Mexican Regulation (NOM) on Maximum Weight and Measures for Trucks and Buses

On April 1, 2008 the new Official Mexican Norm (NOM) governing maximum weights and measures for vehicles operating on federal highways was published in the Official Journal of the Federation (Diario Oficial de la Federación). The purpose of the new regulation is to decrease the maximum weights and measures applicable to vehicles in transit on federal roads and bridges in order to avoid accelerated deterioration and decrease highway accidents. In addition, the regulation seeks to harmonize weights and measures applicable in Mexico with those currently in force in Canada and the United States. In publishing the new NOM, the Federal Department of Transportation attempted to negotiate with and arrive at a consensus with all sectors of the Mexican transportation industry and … read more


Limits on Deductibility of Rent for Temporary use of Automobiles

Various interpretations exist as to the maximum amount of deductibility of payments made for the temporary use of automobiles. In this regard, Article 32 paragraph XIII of the Income Tax Law (Ley del Impuesto sobre la Renta or LISR) provides that “amounts paid for the temporary use of automobiles are deductible only in amounts not exceeding $165.00 pesos per day per automobile, so long as the requirements for deductibility of automobile expenses established in paragraph II of Article 42 of this Law have been met, which shall be strictly applied to the taxpayer’s activity”. In addition, the Fourth Article of the Decree for Exemption of Tax Payments, Forgiveness of Fiscal Credits and Granting of Fiscal and Administrative Facility Stimulants to … read more