The Fifth Resolution Amending Mexico’s 2020 General Foreign Trade Rules (the “Resolution”) was published in the Official Journal of the Federation on May 27, 2021. Among other amendments, it repeals rule 5.2.5. Rule 5.2.5. allowed a sale of temporarily imported goods to be considered as a sale that occurred abroad between a foreign seller and a Mexican IMMEX entity buyer. This meant that such sales would not be subject to the Value Added Tax Law. In essence, rule 5.2.5. established a legal fiction whereby such sales were considered to have occurred abroad, even if the subject goods were physically located within Mexican territory.
In accordance with the Resolution’s First Transitory Article, the repeal entered into force 30 days following publication of the Resolution.
Starting on July 8, 2021, transactions fitting the above description are now governed by the general regime established in articles 1-A section III (withholdings) and 10 (sales in Mexican territory), of the Value Added Tax Law. Therefore, beginning as of such date, IMMEX entities which acquire temporarily imported goods (or finished goods) from foreign sellers, must withhold corresponding value added tax arising from such transactions.