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New decree benefiting Aviation, Manufacturing, Maquiladora and Export Services industries.

December 26, 2006
New decree benefiting Aviation, Manufacturing, Maquiladora and Export Services industries.

On November 29, 2006 the Department of Finance and Public Credit (SHCP) published in the Official Journal of the Federation a decree granting tax benefitsrelating to Mexican income tax and value added tax. The decree will particularly benefit the commercial aviation and cargosector, specifically in regard to Mexican income tax; it will also benefit the Manufacturing, Maquiladora and Export ServicesIndustries (IMMEX), especially in regard to administrative simplifications for value added tax (IVA) withholding for thepurchase of goods or services from Mexican national suppliers. The decree eliminates the obligation of carrying out a specificprogram to use national suppliers and its corresponding administration, as well as eliminating unnecessary administrative costsand fees for maintaining said program. As of November 30, 2006, IMMEX companies may withhold IVA from payments to anyMexican company selling goods or services according to the terms of Article 1-A, Paragraph IV of the Value Added Tax Law,simply providing an assurance that the goods or services acquired are within the catalog of goods and services within its IMMEXprogram, without the necessity of maintaining an additional national supplier program.

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